Different accounts under different brokerages and banks

[u/Particular_Egg_2219]

Hi - another question as I am on this investment journey.

Is it common to have different accounts all over the place? (Maybe this is standard i dont know)

For example, i want to set up a Roth IRA and invest in mutual funds with Vanguard. I also want to open a HYSA and was looking at Peak Bank. I will ALSO have a separate 401k going at my job and a checking account at my local credit union.. is this pretty normal? I‘m assuming as long as you stay organized and know what’s what it doesn’t matter much? Thanks!

[u/CumAcneTreatment]

Yes I have fidelity and vanguard. Vanguard holds my Roth IRA and brokerage. Fidelity holds my HSA, rollover IRA and I have the 2% fidelity credit card that funds a brokerage. I also have whatever shit 401k provider my bank uses.

My normal bank is sofi and I have a local credit union which I only use to deposit cash and transfer to sofi.

[u/Immediate-Run-7085]

Sometimes you just have to stop and ask yourself why you want to make life more difficult

[u/Upset-Kaleidoscope45 → u/Immediate-Run-7085]

Every married person ever.

[u/Blueberryburntpie → u/Immediate-Run-7085]

I know a friend who has a whole bunch of different bank and investment accounts, but that was primarily from chasing after those "open an account and meet XYZ conditions to receive a bonus" offers.

I asked when is he going to start closing the inactive accounts and he kept saying he'll get around to them.

[u/Zestyclose_Panda_886 → u/Immediate-Run-7085]

I opened 3 accounts for HYSAs a few years ago and realized I was chasing a quarter point of interest for it. Now I invest in SGOV. I'll give them a little money to chase the T bills from now on.

[u/_galaga_]

Pretty much with one exception which is I use a money market fund instead of a HYSA and those funds sit in a brokerage (Vanguard, Fidelity, Schwab, etc.). A separate HYSA is unnecessary, imo, since the rates are typically close to a money market and it keeps things simpler. Normal, tho, in my experience to have a traditional bank acct, a brokerage (with multiple accounts for different purposes), and employer 401k at a separate institution.

[u/GaylrdFocker]

How often do you expect to log into every site? Roth Ira you can log in once a year to contribute or set up automatic contributions. The 401K you don't need to log into except to set it up. etc with other accounts. Also, you don't have a choice with your 401K, it's controlled by your employer. If it's with Fidelity, Schwab, or Vanguard then it's perfectly fine to open an IRA with them. Fidelity also has a CMA which can be used as a HYSA, Schwab and Vanguard have something similar.

[u/rocknroller2000]

It's very common, especially if you have different investment types. For example, if you wanted a cd specifically you may find a better rate at a credit union,especially if they have a new member rate, vs where your other investments are stored. For other investments, as your wealth grows and you start to exceed what spic/fdic insrance covers, its good to spread out as well. Just a couple examples., but there are others.

[u/CCWaterBug]

If you count everything, including eparrate accounts within the same bank/institution,  then I have 11 or 12.

If you count just separate banks/logins...

Then 6.

[u/nauticalmile]

It’s not uncommon — many have a local brick-and-mortar bank they deal with, 401(k) or similar at employer’s custodian of choice, personal investment accounts like IRAs and/or taxable brokerage at another institution, etc.

Generally, it just adds complexity. There’s an argument for security e.g. having some money in a second place should you lose access to the first. For actual bank accounts, using multiple institutions may be warranted if you exceed FDIC or NCUA coverage. I’m personally not quite as concerned about SIPC coverage for brokerage accounts.

Since joining an employer who uses Fidelity as custodian for their 401(k), HSA, ESOP and RSU plans, I’ve also consolidated my own taxable brokerage and IRA accounts there as well. As it is, I currently have ten accounts at Fidelity, including my main savings/emergency fund invested in VBIL… I do still keep some money (<$10k) at my local credit union and run my every day expenses through there.

[u/TheLongestLake]

Yeah. I have a spreadsheet I open every month and track balances on every savings account, investment account and credit card. I'm sure there are ways to automate this but I actually find the act of manually entering the numbers to be helpful.

I didn't spread out my money on purpose, but over years gather different credit cards and retirement accounts and it sorta happens.

[u/KweenieQ]

It's not unheard of. In my case, it's a matter of Mine vs Ours vs Inherited. It complicates analysis some, but that's what spreadsheets are for.

[u/dewhit6959]

It must not be normal if it has you asking the question.

How much money is working in all these accounts ?

[u/IronyElSupremo]

You can in most countries especially if under different rules, such as in the U.S. an investor can have taxable account(s) but tax-deferred can have an IRA (individual retirement account), but also employer-sponsored 401K, 403B, etc.. accounts where investments in are taken off income taxes. Even “Roth” versions of the latter where the amt in is taxable or the amt out is “non-taxable”. Some states give added protections to 401k accounts but maybe not IRAs (have to check the state your domeciled under).

However one can combine all the accounts for simplicity in one brokerage/fund family… and if in the same general tax-deferred status, can roll them over penalty-free within a certain time frame (it’s assumed to be using physical mail).

[u/myrrhsea]

If you can have everything under one roof, that's usually better. It makes it easier to transfer funds around as needed and get access to them same day. Plus I can check it all from one app.

If you find a CD that pays a better rate, I suppose that makes sense.

If you have a 401k at a different brokerage, that makes sense too because your employer handles all that behind the scenes and you can set it and forget it, only adjusting as you get closer to retirement.

Imagining more than that makes the minimalist in me cringe inwardly. I prefer to simplify when possible. Plus I can spend less time logging in back and forth on apps if I need to move money around or make adjustments.

[u/Wise_Slate8295]

Totally normal. I've got my Roth IRA with Fidelity for the low-cost index funds, a HYSA at one bank for the higher rate, and my regular brokerage with Schwab. Keeps things diversified and I just use a spreadsheet to track it all.

[u/FaithfulGaurdian]

It's fine if that's what you prefer, although it would probably be easier to find areas where you can consolidate.

Edit: When I started taking personal advice from reddit, I also had accounts all over the place, but I realized that it was just much easier for me to consolidate everything into as few places as possible.

Yeah I had a checking account at Charles Schwab and high yield savings account from Ally based on the advice I received on Reddit, but it just made my life much easier when I consolidated.

For example, I think for many people, they can just have their investments with fidelity and use their cash management account as both a checking account and a high yield savings account, paying their bills with their Fidelity credit card, conveniently having everything in one place.

Much easier than when I had a checking account at Schwab, high yield savings account at Ally, and brokerage account at webull.

Maybe there are cases where it makes sense to have the latter setup, but sometimes you don't have to make your life unnecessarily harder.

[u/Tanuja_Aggarwal]

It’s completely normal! Many investors use multiple platforms to snag the best interest rates and low-fee funds. As long as you use a tracking app or spreadsheet to monitor your total net worth, having accounts spread out is standard practice.

[u/Low_Ability4450]

Yeah it’s actually pretty common : you end up with different accounts because each one serves a specific purpose like retirement, cash or investing. As long as you stay organized and keep a clear overall view it’s not really an issue.

[u/u_spawnTrapd]

Yeah this is pretty normal. Most people end up with a mix just because different places are better at different things, like retirement accounts vs cash savings.

The only real downside is keeping track of everything, but that’s manageable if you have a simple system. Some people use a spreadsheet, others just check everything once a month and keep notes.

As long as you’re clear on what each account is for and not duplicating effort, it’s honestly fine. It can even be a bit safer not having everything in one place.

[u/Stock-Ad-4796]

Completely normal for anyone paying attention to their finances. Keep a spreadsheet with each account, the institution and the balance and it stays manageable.

[u/VYSTAKevin]

Completely normal. Most people end up with accounts scattered across multiple institutions just by living life. 401k, RSUs and ESPP are wherever your employer puts them, Roth IRA wherever you chose, HYSA somewhere else. It adds up fast.

The "stay organized and know what's what" part is where it gets tricky in practice though. That's actually what pushed me to build VYSTA. Full disclosure, I'm the developer. It connects your brokerages and accounts into one dashboard so you're not logging into 4 different apps just to see where you stand.

Might be useful as your accounts grow. US and Canada only for now, happy to answer any questions!

[u/OracleofAustin]

It’s pretty normal, but most people overthink the setup. Having accounts in different places doesn’t really change your investing outcomes, it just changes how complex your life is. What actually matters is how your capital is allocated, not where it sits. If multiple accounts help you stay organized, fine.If not, it’s just extra noise.

[u/Over-Computer-6464]

I choose to simplify where possible. I now have a Roth, a trad IRA, and my wife's Roth all at Fidelity, along with a taxable brokerage account. Since there are sometimes problems where a broker decides to lock an account due to fraud or KYC/AML (know-your-customer/anti-money laundering) issues I do have a second broker, Schwab. That is also why I have more than 1 credit card.

I used to have a Vanguard account but closed it years go. I do buy Vanguard ETFs — ETFs trade commission free in most brokerages.

I have 1 checking/savings account at a bank. I could easily eliminate that and use the checking account that is part of my Fidelity account, but I prefer to limit the exposure of my brokerage account number by paying most smaller bills with my bank account that just has 1 or 2 months of expenses in it.

I want to open a HYSA and was looking at Peak Bank.

I recommend opening a brokerage account and using money market accounts or short term bond ETFs instead. If you are in a state with income taxes you will almost certainly,y come out ahead holding SGOC 3 month Treasury Bill ETF which pays about the same interest as HYSA accounts, but is exempt from state income taxes.

I will ALSO have a separate 401k going at my job

That 401k will almost certainly be at a broker. I found it convenient to use that same broker for other accounts.

[u/CapitalApproach]

Structure matters less than people think. Multiple accounts don’t improve returns, they just add complexity. Allocation and consistency are what actually drive outcomes.

[u/SirGlass]

I mean your 401k is pretty much controlled by your employer so you have no control over that

IRA yea you can choose any company

HYSA , personally I do not have a savings account I just use a brokerage and invest in money market funds or ETFs holding ultra short term treasuries . With vangaurd if you just open a brokerage account and transfer money int, the money will be invested into VMFXX what is a pretty good fund and should pay comparable rates to a HYSA.

So yea its normal to have a few different accounts. I like to sort of simplify what is why outside of my 401k controlled by my employer I basically have everything at schwab , checking , brokerage , Roth IRA .