A Two Checking Account System: Why It Works For Me

Over the past several months, I’ve started to really bank on a system of two checking accounts for my personal use, a system that has confounded a lot of people in my life. “Isn’t having two checking accounts rather confusing?” I’ve been asked more than once. “What’s the point?”

It turns out that there really is a point in doing it this way and using both is not at all confusing, as the two accounts serve very different but complementary purposes. Here’s the scoop.

About a year ago, I was very disappointed with my checking account at a major bank chain. They were constantly finding new and creative fees to ding my account with and I was getting sick of it, so I decided to seek out a new checking account, which I wrote about in the past.

During that process, I made a list of checking account features that I was really looking for:
+ no fees, period
+ some percentage return on my account balance, the higher the better
+ a nationwide fee-free ATM network
+ free online bill pay
+ the ability to write paper checks
+ the ability to easily visit a teller whenever I wanted
+ the ability to have 24/7 phone-based customer service

I quickly realized that in order to get some of these options, I was going to have to use a large, international bank. Thus, I started looking at the interest checking accounts offered by some large banks and quickly came across ING’s Electric Orange checking, which at the time offered a 4% APY on your checking account balance. This account hit home runs in four areas:
+ it had no fees, period – not even overdraft fees (they allowed you to essentially “borrow” the money to pay bills, then pay that back with interest, which usually just added up to pennies)
+ a 4% annual return on my balance, calculated daily and compounded monthly
+ a free online bill pay service and online account access
+ a fee-free nationwide ATM network
+ a 24/7 phone-based customer service

However, the account was missing two key features for me: you cannot write paper checks and there are no tellers you can visit to conduct business like cashing checks and so on. This frustrated me at first, but I decided to make the move to Electric Orange anyway.

Shortly thereafter, I closed up my account at the large mega-bank and then opened a checking account at my local bank in town. It turned out that my local bank offered the services I was looking for: a free checking account with online access and a branch not far from my home to do business with a teller if I so wished.

So now I have two checking accounts I use regularly. I keep most of my balance in the one that pays interest, from which I do online bill pay and most of my other transactions. However, that local checking account allows me to have a checkbook for free and gives me teller access, so I keep a few hundred dollars in there at all times and just use it for writing paper checks and any services that a teller might be useful for.

This system works incredibly well for me. Since there is no account at any bank that provides all of the services I’m looking for, I found that using two banks in this capacity works extremely well to provide all the services I need.

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