Do you have your checking account and savings account with the same bank? If so, then you might want to look into linked savings accounts. Also called packaged accounts, this simply means that your savings account is linked with another account, such as your checking account. You have both accounts through the same bank, offering several benefits for your convenience.
Linked Savings Accounts Streamline Finances
Linking your checking and savings accounts tends to streamline your finances. Instead of receiving two separate monthly statements from independent banks, you will receive one statement showing the transactions and balances of both (or all) accounts. Likewise, when you go to do your online banking, you’ll have everything in one portal.
Linked Savings Accounts Facilitate Quick Money Transfers
I have both a savings and a checking account with the same bank. Therefore, I find it very easy to move money between my accounts. I have set up automated savings so that every two weeks a specific amount of money moves from my checking into my savings account. Other people opt to approach this the opposite way – putting all of their money into savings and then automating deposits into checking to pay the bills each month.
I also have a credit card with the same bank. These linked savings accounts allow me to easily transfer money from savings or checking to the credit card when a payment is due. Alternatively, if I am low on money, I can easily access a cash advance by transferring money from the credit card over to my other bank accounts. Since everything is linked, the transfers happen almost instantaneously. There is no delay as I wait for money to move from one account to another.
Linking Accounts Can Earn You Benefits with the Bank
Your bank is a business. They want to keep you as a customer. Therefore, the like linked savings accounts. After all, they prefer that you do all of your banking with them, not at another bank. As such, they will often offer incentives for linked savings accounts. For example, your savings account might come with a higher interest rate if you also have a checking account with the same bank. Another common benefit is automatic overdraft protection for linked accounts.
Are There Any Drawbacks to Linking Accounts?
Personally, I think that the convenience of a streamlined account system is a huge benefit with few drawbacks. However, there are definitely things to be aware of when considering whether or not you want to link accounts.
For example, can you get a better rate elsewhere? I do also have a separate high-interest savings account. I store more of my money there to get the best interest rate. I only keep a little bit of money I my linked savings account. If you can get a better deal for either account at another bank, then linking all of your accounts to one bank might not be the most beneficial option for you.
Additionally, some people prefer to diversify their accounts for security. They like to work with different banks rather than having one large company in charge of all of their money. This is simply a personal preference. If that sounds like you, then linked accounts might not be the right fit.
What do you think? Do you have linked savings accounts?