Multiple bank accounts.

kimplus8

I am looking at having a few different bank accounts as savings pots etc. 
so far I have 
main account- where wages get paid in
bills account- where all my direct debits go out
LISA- mortgage deposit savings
Car account- tax, mot, insurance up front etc
spending account- for my groceries and general spending. 

All my money gets paid into my main account and then I split it up between the other 4 accounts to pay bills, save and have grocery money. 

Is this a normal amount of accounts, does anyone want/have more? 

Will having this many accounts affect my mortgage application on the future? 

Band7

There‘s no ‘normal’ number of accounts. Though it’s good to have more than one current account, with different banks, in case there is a problem with one of the banks.

You just have as many accounts as you feel you need, and as you can manage without losing sight of one or more of them. Personal finance management software can help with managing a plethora of accounts. Some people just use a spreadsheet to track their accounts.

Mortgage lenders will look at your Credit Reference files to help them assess your credit worthiness. As long as your accounts are all in good order (no missed payments, no unauthorised overdrafts, no huge credit facilities etc), you should be ok. If you have several accounts in good order, this may even work in your favour as it shows you are a responsible account holder.

When applying for a credit account, e.g. a current account, the bank will carry out a hard search on your credit files. This will be recorded and stay visible to other lenders for a year. The general recommendation is not to apply for any current account or credit card 6-12 months before applying for a mortgage.

Band7

Checking your credit files: https://www.moneysavingexpert.com/loans/check-free-credit-report/

MovingForwards

I've got 5 current accounts:
- normal wages in / direct debits out

- holding account as it's 4 weekly pay

- everything to do with my car and home insurance
- emergency leak fund

- special event fund

I've got 9 savings accounts which are for things like updating my home, external repairs, mortgage emergency fund, bills emergency fund, 'float' etc. 

Providing your accounts are run well, no direct debits etc bounce lenders won't mind how many you have. 

kimplus8

Band7 said:

Checking your credit files: https://www.moneysavingexpert.com/loans/check-free-credit-report/

I have done this and it’s clean except for a bankruptcy that drops off in July. 

400ixl

It is not unusual to have multiple accounts for different purposes such as savings.

What you are looking at is using multiple current accounts for spending pots which modern current accounts can deal with from one account these days. Starling for example, you just set up different pots and can set payments to go from those pots. Chase do similar where you have multiple accounts under the same master account. You set up automatic transfers to move money from the main account your funds are paid into.

Personally I would use the modern accounts and pots as it is much easier than multiple accounts with multiple banks. I would still have at least one other current account, probably linked to one where I could get a good rate savings account (Maybe First Direct if you can afford to put away a regular saving and get their 7% on it).

It won't affect a mortgage application whichever way you do it as long as no DD payments etc are missed. 

Band7

Savings accounts are not shown on credit files, anyway. Only credit accounts - i.e. current accounts, credit cards, and some utility / phone accounts.

It is rarely a good idea to keep savings in current accounts as they generally pay no interest, or just very low rates.

phillw

kimplus8 said:

Is this a normal amount of accounts, does anyone want/have more? 

Why do you care what is "normal"? "Normal" people have 1 current account.

While I don't think 14 is excessive. 

phillw

Band7 said:

It is rarely a good idea to keep savings in current accounts as they generally pay no interest, or just very low rates.

A few years ago, I would only keep money in current accounts as savings account interest rates were much lower.

You just have to follow the highest interest rate.

DE_612183

I have 3 current and 4 savings.

Current are "Income" , "Bills" & "Shopping" - The income is wages etc, bills just direct debits.

Savings are "Sinking Funds", Long Term Savings, Short Term Pot ( for any monthly unexpecteds ) and one for Future Bills.

kimplus8

I’ve settled on 

3 current accounts
wages account/ income
spending/ groceries account
bills account

3 savings accounts
LISA/ mortgage deposit account
Car Fund
Emergency/ unexpected account

LISA is with Skipton
Bills account is with Barclays
all other accounts are Nationwide. 

Are there any of these I could mover for better rates, the LISA and Barclays account maybe??