The types of savings accounts you will need in your life

One savings account is a start, but it's rarely enough. From regular savings accounts to emergency fund accounts, here's how the right mix can help you save smarter, spend more intentionally, and protect what you've worked hard for.

Putting your savings in a savings account is a good way to protect your money. But did you know that you should have more than one savings account under your name? In this article, we discuss why you need multiple savings accounts and how many you should have.

Why do I need more than one savings account? 

The saying “don’t put your eggs in one basket” is a good way to start the discussion. You should avoid putting all of your money in just one account in case anything goes wrong.

But you shouldn’t have too many bank accounts either. While there are no penalties or fees for having multiple bank accounts, it does entail more responsibilities. You need to make sure each of the bank accounts meet the maintaining balance, and monitor each one regularly for any suspicious activities.

How many savings accounts should I have?

There isn’t a set rule regarding how many you should have. It depends on your needs and your lifestyle.

Types of savings accounts you might need in your life

Different life stages call for different financial tools. Whether you're just starting out, building a family, or growing a business, the right savings account can help you reach your goals faster. Here's a look at the most common types of savings accounts and how each is best used.

• Regular savings account

  This is where you should put a fixed percentage of your income each month. Most people follow the 50/30/20 budgeting rule, meaning 20% of their income immediately goes into the savings account each pay day.
  
  

• Emergency account

  An emergency savings account is where you put your money for a rainy day. These are days you have to deal with sudden expenses such as unexpected hospital visits, accidents, home repairs, car repairs, etc. Having an emergency account gives you a bit of a buffer. This way, you won’t have to dip into your other accounts and potentially drain all the money there.
  
  

• Spending account

  This savings account is used for your daily expenses such as groceries. You can also use this account to pay for your bills, utilities, loans, and scheduled payments. A good way to manage your spending is by depositing only how much you are willing to spend in your spending account. That way, you can put a cap on your spending.
  
  

• Income/Payroll account

  When you’re employed, your company typically sets up an ATM payroll savings account for you at their chosen bank. This is how you receive your regular salary, bonuses, and reimbursements from your employer. Should you choose to resign from your company, it becomes a normal savings account unless you are required to close it.
  
  

• Foreign currency account

  If you have a relative who is working abroad, or if you have a foreign employer or client, a foreign currency account makes it easier for you to receive money and convert to Philippine Pesos.
  
  

• Child savings account 

  A bank account for kids helps parents build a financial foundation for their children early. It typically requires a lower initial deposit and maintaining balance, making it accessible for most families. On top of these, it's a practical way to teach children the value of saving from a young age.
  
  

• High-yield savings account 

  A high-yield savings account works like a regular savings account but earns a significantly higher interest rate, so your money grows faster without extra effort. It's ideal for those who want to maximize returns without investment risk. Just note that these accounts often come with stricter maintaining balance requirements and limited withdrawals.

The right mix makes all the difference 

These common account types are a good starting point, but your savings strategy doesn't have to stop there. Having more than one account helps you stay organized, separate your goals, and avoid the temptation of dipping into funds you've set aside. The key is finding the right combination that works for your lifestyle and financial goals.