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Why to consider keeping your checking and savings accounts in separate banks

It all comes down to impulse control.

ATLANTA — As soaring inflation forces us to pinch pennies, some financial experts explain it may be time to examine where you keep your money.

Balancing your finances can be like walking a tightrope. Keeping your savings and checking accounts in one bank can provide a safety net. Some need it, while others actually do better without it.

But, as Dr. Michael Thomas of UGA’s College of Family and Consumer Sciences explained, it’s all about impulse control. 

Linking your checking and savings accounts at one bank provides a sense of security. Should you overdraw on your checking, your savings account is there serving as a safety net.

However, Dr. Thomas said there is a downside.

“It can trigger them to feel as if, ‘oh, I have plenty of money and I can take make plenty of mistakes this month without consequence,’” he explained.

Dr. Thomas added that the impulsive spender might be better off if the two accounts are kept from one another.

“Take that savings and place it in an account that's out of sight, out of mind,” he said. “What happens is that if we get into a good rhythm, we kind of forget that money is there and we learn how to operate on what we have.”

Your bank might also offer an attractive package for a checking account but not necessarily the best interest rate on savings

“It's always the optimal financial strategy to actually search for what is the best rate,” Dr. Thomas added. “What are the highest interest rates being earned?”

However, there are banks that offer perks for keeping both your savings and checking accounts under one roof. They might waive some fees or offer lower interest rates on loans.

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