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Do Multiple Bank Accounts Help You Save More?

Wednesday, May 1, 2013 - 6:47 AM
From University of Kansas (via
According to new research by KU School of Business assistant professor Promothesh Chatterjee, individuals will save more and spend less when they have a single account compared with multiple accounts.

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I don’t think the researcher considered maximizing interest rates. If you have just one bank account, it’s very likely that you’re missing out on higher interest rates.
Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
1. Wednesday, May 1, 2013 - 7:21 AM
It's all about psychology - if you're a spender, then yes, you spend more with more accounts, if you're a saver, then you may save more with multiple accounts.
darkdreamer4udarkdreamer4u178 posts since
Jun 11, 2010
Rep Points: 638
2. Wednesday, May 1, 2013 - 1:25 PM
There are many good reasons for having multiple accounts.  I have done it all my life so that I can take advantage of who is giving the best interest rate.  It has very little to do with saving more especially if we only have a certain amount of income to use for savings.  When a CD matures, I rarely stay with the bank I got it from unless their rates are as good as the best rate in my area.  It can be a pain but I play musical chairs with my CDs and I always let the bank know why I don't redeposit a CD with them.  Not that it does much good.  I have two CDs maturing this month and I am already looking for new banks or credit unions to put them in. 
paoli2paoli21,406 posts since
Aug 10, 2011
Rep Points: 6,152
3. Friday, May 3, 2013 - 10:08 AM
Interesting, unless I missed it, the author never said why (or how) having just one account encourages savings.

I do not have that many accounts but if I had just one I would not get much interest.  I currently have 4 accounts at 3 different instutions.
dpandslemmendpandslemmen29 posts since
Feb 10, 2011
Rep Points: 120
4. Friday, May 3, 2013 - 11:05 AM
@ dpandslemmen, You did miss it.  The article says:
According to Chatterjee, his findings can be explained by two often-cited theories of behavior – “motivated reasoning” and “fuzzy-trace theory.” Motivated reasoning implies that individuals find spending more enjoyable than saving and are motivated to search for reasons to justify spending. In such situations, vagueness enables them to distort available information to follow desirable spending motives. And having multiple accounts provides that vagueness.

“Basically, people look for an excuse to spend, and vague information facilitates this,” Chatterjee said. “And having multiple accounts provides just enough vagueness to do the trick.”

In other words, Chaterjee says that some people want to fool themselves into spending vs. saving, and having multiple accounts complicates matters enough to justify them doing what they already wanted to do anyway.  They might reason that it's all right to spend what's in one account because they have three other saving accounts.  I think that most regular readers of this blog are not that naive.
GeorgeTA_SteeleGeorgeTA_Steele3 posts since
Mar 14, 2011
Rep Points: 18