Anything wrong with having accounts at manh banks?

[Beppington]

Edit: Many banks (darn typo's!)

If for example you want to chase around the highest interest rate in your city, I can't see anything wrong with opening say money market accounts or CDs at many different banks. Can you?

It's really another level of diversification, no?

[kork13]

12-18 months ago, I would have totally agreed with you. In fact, I acted on it, and at that time I had business with a total of 9 financial institutions. At the time I was seeking savings account rates (I had 6 accts) and credit card rewards (I had 5 CC's). Pretty much all of them saw regular activity for very little reason except to keep the accounts organized and CC's active.

I have since realized that I prefer simplicity. I'm down to 5 banks/credit unions, working to eventually get down to 3, with only 3 savings accts (only 1 regularly used) and 3 CC's (only 2 regularly used). Part of that process is involving some "creative" changes, but I prefer it. Having fewer banks makes it alot easier to keep track of and keep records for. Each account has its own minimums, account information, website, and so on. So much of a mess to deal with. While it's totally doable, I'm not going to do it again. If for some reason I decide I just have to pick up another, one of the others is going away.

As for the "diversification" argument, I disagree. What are you diversifying? Cash is cash is cash. They're all insured by the same agency: FDIC. The only real reason that I see to "diversify" your banks is if you're over the FDIC limits for one.

[disneysteve]

Originally Posted by Beppington

It's really another level of diversification, no?

Originally Posted by kork13

As for the "diversification" argument, I disagree. What are you diversifying? Cash is cash is cash. They're all insured by the same agency: FDIC. The only real reason that I see to "diversify" your banks is if you're over the FDIC limits for one.

kork13 is correct. Diversification refers to spreading your money across different asset classes that perform differently over time and carry differing types and degrees of risk. Putting cash into 7 different banks isn't diversifying anything. It is just complicating your record keeping.

[Thrif-t]

and really with the low rates we have now are you really finding much of a difference between them that makes it worth your while?