I thought I was smart to keep money in 3 savings accounts, but I'm much happier now — and earning more — with just one

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• I closed two accounts this year and merged my savings into one to reduce fees and earn more interest.
• Having one savings account makes it easier to manage my money and track my financial progress.
• With record-high savings rates, I can maximize interest earnings by combining my money.
• Earn 5.26% APY with a NexBank High Yield Savings Account.

When it comes to my savings, I'm adopting a new mindset: Less is more. One of the big money moves I made this year was merging all of my savings accounts into one account.

Why? I wanted to keep things simple and avoid unnecessary fees. I also wanted to maximize the interest I could be earning by consolidating my money into one lump sum.

Here's what went into my decision — and tips to help you decide if combining your savings is right for you.

My previous savings strategy stopped working for me

I've had three savings accounts for the past couple of years:

• Account A was for my emergency savings, stored in a standard savings account at the same bank as my checking account.
• Account B was for my homeownership dreams, stored in a high-yield savings account at an online bank.
• Account C was my "living wealthy" fund, or money put aside for large purchases or vacations, stored in a money market account at a second online bank.

Over time, managing these three accounts became a headache. Keeping track of my login information, account balance, fees, and interest rates across three financial institutions was a time suck. Plus, it was time-consuming to move money around between different accounts.

It also started to cost me money. Accounts A and C both had monthly maintenance fees. These fees could be waived if you maintained a minimum balance, which wasn't an issue for Account A because I mostly leave my emergency savings untouched.

But, I often fell below the balance for Account C, my "living wealthy" fund, because I was regularly depositing and withdrawing money to use for different purposes.

Lastly, I was missing out on earning interest. While Account B earns a decent return, Account A earned next to nothing — 0.01% — and Account C doesn't offer interest as competitive as I could get somewhere else.

I opened multiple savings accounts to keep my savings separate and reduce the temptation to spend that money on other things. But now, the stress of juggling all these accounts isn't worth it.

Merging my savings accounts meant embracing simplicity

Before doing anything, I sat down and wrote out what I wanted from a savings account.

I care the most about maximizing the interest I can earn and avoiding fees, even if that means sacrificing liquidity.

That led me to move the money in both Accounts A and C to the high-yield savings account I used for my homeownership fund, which has the highest interest rates and no fees.

I can maximize my earnings with a larger balance in a single account. This helps my money to grow faster and offers a significant boost to my overall savings goals.

Instead of setting up multiple monthly transfers, I make just one lump deposit into my savings and can watch it grow.

While I keep track of each goal separately, keeping it in one place gives me peace of mind and saves me time.

Even if I need to access money or pay for something quickly, I can easily do so from my checking account or credit card and transfer the money from my savings. Though online transfers often take a few days, I have enough money in my checking and credit card to fall back on.

What to consider if you're thinking of combining your savings

Merging everything into one account isn't for everyone. Here are some tips to help you decide if it's right for you.

1. Take a second to review your savings goals. Do you have specific goals for different accounts, such as an emergency, vacation, or down payment fund? Decide if merging these goals aligns with your financial plans.
2. Research high-yield savings accounts and compare interest rates. You'll want to find an account that offers competitive rates while meeting your needs.
3. Consider whether you would benefit from using a bank that lets you setup separate buckets to save for different goals.
4. Keep an eye out for any fees, like monthly maintenance fees. Review if there are any minimum balance requirements you need to meet or if there are limitations on how many withdrawals you can make.
5. Set up automatic transfers from your checking account. This way, you can make sure you're consistently saving without the hassle of manually moving money around.

Combining my savings accounts was one of the best financial decisions I made in 2023. The simplicity mindset is something I plan to carry into other areas of my finances.

Of course, what works for one person may not always work for someone else, so it's important to consider your financial situation and goals before making any changes.

This article was originally published in December 2023.