/ Finance 101

6 reasons to diversify your bank account today

When most people hear the words “diversify” and “banking” together, their thoughts go to investment portfolios, GICs, bonds and other investment accounts.

But did you know that applying the same idea of “diversification”, or varying the way you save money, to your personal chequing account can have a big impact on your bank balance and ability to save?

Here are 6 reasons why you should start diversifying today.

1. Your money will build up like cobwebs

Rather than keeping your money together in a single account, spreading it out into a number of smaller accounts can make you a better saver. When your pay cheque comes in, try automating a few different transfers into separate accounts — $50 here, $25 dollars there, whatever you can afford to miss — and forget the accounts even exist. Continue using your chequing account for regular transactions and ignore the transfers to your extra accounts — while you’re paying bills and living your life those forgotten funds will multiply in the corners like cobwebs.

2. Designate a “bills” account and you’ll never run short

Bills are a fact of life, and they come at regular, predictable times each month. If you know, on average, that you pay $350 a month on your bills, move that amount plus a little extra into a separate account each pay. Creating a “bills” account with an automatic flow of cash from your regular chequing account will come in handy when a bill needs due and your budget runs tight. Because you’ve already tucked the money aside, you won’t need to skimp together a minimum payment and hope you have enough next month. Whew.

Back-up funds can be a lifesaver."

3. Forgot about that birthday party? No big deal.

We all have those “oh no” moments, when you realize you have an expense coming up that you didn’t plan for. Whether it’s your kid’s friend’s birthday, a last-minute wedding invitation, a party you have to host or something else altogether, back-up funds can be a lifesaver. Rather than using money from your chequing account, which can leave you short later that month, move money over from one of your extra accounts to pay for your gift. You’ll keep your cool and avoid stressing your budget.

4. Build a rainy day fund

Nobody can predict the future, but we can assume that everyone goes through tough financial times now and then. Setting up an automatic transfer from your chequing account to a rainy day fund will help you build a buffer for the hard times. Move whatever you can spare off your pay cheque, and consider adding a little extra when the money is good. If you can afford to shift an extra $30 to your rainy day fund during a particularly good month, you’ll be thanking yourself later. Generally, you should considering saving enough in a rainy day fund to support yourself for at least three months.

5. Make that big purchase guilt-free

This our favourite reason for diversifying a savings account. Move money into a separate account to save toward big purchases, so you’ll have money tucked away when you want to splurge later. Whether it’s a new set of rims, a luxury handbag or a new bathing suit for next summer (when did those get so expensive?), by moving funds out of your chequing account and into a designated purchase account you’ll save up for your purchase over time and you’ll be able to make the big spend when it arrives without going over budget.

6. Automatic accounts start small and finish big

You’ve gotten this far in the article and you’re thinking “okay, this information might have been useful if I had any extra cash lying around, but I don’t think ‘diversification’ is for me” – but, we promise, it’s for everyone! Let’s say you set up two extra savings accounts, and you can spare maybe $50 a month. One account can be for fun expenses, like a well-deserved vacation, and the other can be kept as a rainy day fund. Set up the transfer, sit back and watch your money grow over the years. 


1 month

6 months

12 months

2 years

5 years







Rainy day






How good does an extra $3,000 sound? And if you move your money into higher-interest accounts, like a RRSP or savings bond, you’ll be even further ahead.

We surveyed 20 people in our office, and 14 of them said they have a diverse set of savings accounts. On average, most people said they have at least 2 accounts within their personal bank account (not including investments), which they use for regular banking as well as a variety of savings purposes.

So, how will you put this into practice?

Can you spare $5, $10 or even $25 dollars a pay? Put it in a separate account! What are you saving for?

This article is for informational purposes only. For personalized financial advice, you should contact a qualified financial advisor.

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