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Consider multiple bank accounts to help manage your finances

Keeping finances organized is a challenge, and doubly so if you’re a freelancer. That's why it can be beneficial to have multiple bank accounts to help manage your cash flow. 

Even though you are your business, you’ll want to, at a minimum, have a separate checking account for the business. If you have an LLC or S Corp, you likely already have a separate business checking account. Even if you don’t have an LLC or S Corp, you can still use a separate checking account and treat it as your “business” checking account to make sure your money and the “business’ money” remain separate. It can be helpful to have a savings account for your taxes, too. 

You should use your business checking account to deposit payments from clients and pay business expenses. You can pay yourself out of your business bank account as if you were an employee. This will make things much easier come tax day. 

We also have a playbook on this subject, Set Up a Business Bank Account, that walks you through selecting and opening your business bank account. However, how you organize your money, and where, is entirely up to you, but what’s important is that you feel good about your system and you’re setting yourself up for success. 

Types of bank accounts you may want to have 

Depending on your setup and circumstances, there are various types of bank accounts that could work for you as a freelancer:

  • Personal checking account: This is an account you’ll use to pay your bills and other personal expenses. This account should be super liquid (i.e. easy to access).

  • Business checking account: As we mentioned before, you’ll use this account to pay yourself and your business expenses. If you have an LLC, you need this account. You can also set money aside for taxes and retirement from this account. 

  • Solo 401(k): This holds your retirement savings. Assuming you have a while before retirement, this account doesn’t need to be liquid at all. You can set up automatic contributions (aka transfers) from your business bank account so you don’t forget to contribute. 

  • Padding (savings) account: This is a savings account you’ll likely draw from when you’re first starting out, or you can use it in case of any slower months. This money should be liquid. This is similar to your personal checking account but has money you are saving as padding.

  • Emergency account: As the name suggests, this is money you’ll only use in the case of an emergency, so you ideally wouldn’t touch this for any other reason. You can store your emergency account in a high-yield savings account, so it can accrue interest while it sits there. 

  • Tax account: You can also use a high-yield savings account (aka higher interest) for this — this is where you’ll set aside money to pay your quarterly taxes. 

We recognize this is a lot of accounts and may seem overwhelming! You may not want to manage six bank accounts and that’s completely okay. How many bank accounts you want to have is a personal decision and may change over time. But you may want to consider using multiple accounts to take advantage of the different benefits each offer. For example, having a separate account for your business income can help keep your finances organized, while an emergency fund may bring peace of mind in case something unexpected happens. 

Develop a banking strategy 

In the workbook, go through the various account types listed and check off any you already have. Put a checkmark next to the accounts you’d like to open. 

Where you choose to open your new accounts is a personal decision. It may be more convenient to use the same bank for all your accounts, but you may get better interest rates or offers at different banks. 

Depending on where you live, you might want to opt for a local bank that knows your area and can provide tailored services. On the other hand, bigger banks like Chase, Wells Fargo, and Citi offer more wide-reaching services across multiple locations. All in all, there's no wrong choice when it comes to picking banking options; foresight and due diligence are key to selecting the one that best suits your needs.

To open a bank account:

  • You’ll need a government-issued ID.

  • Your Social Security number. 

  • Some banks require an initial deposit or have a minimum amount you need to keep in the account at all times. We recommend doing research on this ahead of time.

  • Many banks allow you to open an account online if you have an account already open with them. If you’re opening an account with a new bank, you may need to go in person to open the account. 

By assessing the different types of bank accounts available and taking advantage of the benefits multiple accounts offer, you can create a system that works best for you and your finances. Having multiple accounts in place can help give you financial security as a freelancer and ensure that your money is working for you to build long-term wealth.


  • Identified which bank account(s) you already have.

  • Decided which bank accounts you might need.

  • Reviewed the documents you’ll need to open a new account.

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