Why you should open multiple savings accounts

If growing and protecting your money is important to you, then adding a second, third, or fourth savings account to your portfolio is a good idea.

Contrary to popular belief, there is no limit to how many savings accounts one person can open... and many people believe one is enough. But opening multiple accounts can help you get the most out of your cash. If you’re someone whose loyalties lie with one bank, chances are you are missing out on several benefits. Here are four reasons to open multiple savings accounts:

Benefits of opening multiple savings accounts

Grow your savings faster

A smart savings hack is to open several fixed-term accounts of different lengths. This way you will benefit from long-term rates while always having some money available as accounts mature at chosen regular intervals. As rates change, money can be moved accordingly to get the best returns on the highest balance. This approach is called cash savings laddering.


How to build a cash savings ladder

Let’s say you have lump sum of £100,000 in cash. Start by dividing it into portions or 'ladder rungs' to deposit into savings accounts with different maturity periods and interest rates. You might choose to divide it into five equal amounts of £20,000.

Look for accounts with terms ranging from short to long and opt for accounts with higher interest rates as the time period increases. You can now spread the money across these accounts. For example, you could put £20,000 in a one-year savings account, another £20,000 in a two-year account, and continue this pattern for three, four, and five years.

As each account matures, reinvest the funds into a new account with a longer term and better interest rate, gradually building a ladder that maximises returns while ensuring liquidity. Explore Flagstone’s latest interest rates.


Cash savings laddering strategy visual


Explore: the ultimate guide to growing and safeguarding your savings.

Track the progress of your goals

Having different accounts for individual savings goals (such as a house deposit or emergency fund) allows you to see how much you have set aside for each. It makes it easier to monitor spending patterns and encourages healthy saving habits.

Protect your wealth

Since the collapse of Northern Rock bank, the safety net for savings has been considerably improved. But savers still face risks. Any savings over £85k in an individual account and £170k in a joint account is at risk of loss if the bank was to fail. Spreading and diversifying cash between a number of banks can give you FSCS protection, keeping your money safe and insured. The FSCS covers multiple accounts as long as they are with different banking institutions and the amount in each account is under the limit.

Minimise the chance of misspending 

Creating clarity around how much is saved for each goal also highlights how much is available to spend, reducing the temptation to dip into funds and preventing overspending. Withdrawal restrictions on certain savings accounts will also stop you from exhausting your cash.

How do you manage multiple accounts?

Opening and managing several accounts might seem like arduous work and admin – but it doesn’t need to be that way. Cash deposit platforms, otherwise known as savings marketplaces or platforms, are making it easy for consumers to open and move money between multiple accounts.

Flagstone’s cash deposit platform offers access to a wide range of savings accounts with varying banks and terms. With just one log in, it eliminates the hassle of application forms and allows you to move money around with ease. This new way of saving is helping people grow and protect their wealth so they can plan for the future.

Find out how the Flagstone platform works.

This article is not advice. If you would like to receive advice on your savings and investments, consider speaking to a Financial Adviser.



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