Why You Need 5 Banks Accounts

by | Jun 1, 2020

People think I’m weird when I tell them I have 5 bank accounts.

When I told my partner she should do the same she looked at me like I had a second head.

I have 5 bank accounts because it allows me to go on holidays, save for a house deposit, invest in the stock market, eat out, shout my friends a round at the pub and have an emergency fund.

I got the idea from Scott Pape AKA The Barefoot Investor. Here are the accounts I have and why.

Account 1. Everyday Needs

My first account is for my everyday needs. This is a transaction account I hold with ANZ. There is no reason that I hold it with ANZ its just the bank account I’ve had since I was 18. This is where my paycheck goes when I get paid. I make fortnightly transfers from this account to my other accounts. I keep around 50% of my take-home pay in this account. This account pays for the things I need to survive every day.

What I use this account for?

  • Rent
  • Bills
  • Grocery shopping
  • Mobile phone plan
  • Internet
  • Gym membership

Account 2. Everyday Wants

Account number 2 is for my everyday wants. The trick to this account is that I don’t actually use it every day. This is a transaction account I hold with Ubank, I use Ubank because if you link this account to a Ubank savings account you get some bonus interest. I transfer 20% of my take-home pay from account 1 into this account each fortnight.

What I this account for?

  • Going out
  • Eating out
  • Ridesharing
  • Sport and hobbies
  • Subscriptions such as Audible and Netflix

Account 3. Short Term Savings

Account number 3 is for my short term savings. This account is for things that will take a bit of saving to buy but that you plan on buying either this year or the next couple of years. I transfer 10% of my take-home pay from account 1 to this account each fortnight.

What this account is for

  • Holidays
  • Car
  • Anything that you wouldn’t be able to afford from a single week’s wage.

As the name suggests this is a savings account I hold with ANZ. Although not as good as Ubank’s rate, with ANZ I get bonus interest when I deposit $200 a month. I wanted to hold this account with Ubank but they would only give me bonus interest on one savings account. Which brings me to my next account.

Account 4. Long Term Savings

My fourth account is for long term savings. This account is for savings for things that will take years to save for or pay off. I use this account to save for a house deposit. It can also be used to pay off your debt or build an emergency fund. I hold this account with Ubank because if you link it to a Ubank transaction account and deposit at least $200 a month you get a bonus interest rate. With the bonus interest, Ubank pays among the highest interest of any bank in Australia. I transfer 20% of my take-home pay from account 1 to this account each fortnight.

What this account is for

  • Saving for a house deposit
  • Paying off debt
  • Building an emergency fund

Account 5. Emergency

My fifth account is my emergency fund. This is a rainy day fund that I hope I will never need to use. I hold around 6 months’ worth of everyday expenses in this account. This is the account that I may one day need if I lose my job or an emergency occurs where I need a large chunk of cash. If you are building your emergency fund then instead of transferring 20% from account 1 into your long term savings you will transfer it here until you have 3 to 6 months of living expenses saved.

What this account is for

  • Emergencies

This is a savings account I hold with rams. I chose rams because they offered a very competitive interest rate when depositing $200 a month and make no withdrawals. I no longer transfer any money into this account because I have reached by 6-month savings goal.


When you put that all together here is what that looks like.

Image by Author

With my Everyday Needs account, I know I have the money to pay my bills and rent. With my Everday Wants account, I can go out and spend guilt-free. My short term savings account has allowed me to go on holidays to the UK, Ireland and Bali. With my Long Term Savings account, I know that I am putting money away so that I can buy something that will change my life for the better. Finally, my emergency accounts allow me to live with the peace of mind knowing I could survive for 6 months without an income.

If you still need convincing I recommend reading The Barefoot Investor by Scott Pape: The only money guide you’ll ever need.

If you want to read more like this go to valueinvestoracademy.com

Resources Mentioned


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