One reason not to consolidate bank accounts

Bank of America freezing accounts of customers suspected of not being US citizens.

When you have multiple accounts, you have access to multiple streams of money.  If the US government infiltrates one and steals your stuff, chances are that they won’t get everyplace at the same time.  There will be some warning.  So if something of yours gets seized, you’ll be able to live off of one of your other accounts while finding a lawyer (or, if we continue going the pre-WWII Germany route, getting your ducks in order to flee the country).  If, say, Bank of America is your only account, then you’re going to run up a lot of credit card debt (or worse) while waiting for things to be sorted out.  If you can get them sorted out.

Now, of course, it doesn’t have to be fascism that causes inaccessibility to one of your accounts.  Sometimes your account will get compromised by theft or there will be some kind of clerical error that freezes an account.  When DH’s debit card got spoofed and our Wells Fargo account was temporarily frozen, I was grateful to have access to a checkbook from a credit union account with money in it to pay the monthly bills.

How would you access money if your main account got frozen?



17 Responses to “One reason not to consolidate bank accounts”

  1. Leah Says:

    Is it illegal to have a bank account as a non citizen? Lots of our international students have bank accounts. Why does the bank care?

  2. yetanotherpfblog Says:

    BofA never ceases to amaze me with their malevolence and incompetence.

    We have cash stored in a few different accounts and our brokerage and retirement accounts separate from that, so if one was compromised, we’d probably be fine. Still, probably should start keeping more cash on hand for emergencies.

  3. Revanche @ A Gai Shan Life Says:

    I will never use BofA again as a main bank – they’re too evil. I will use them for the Alaska Air miles cards for our benefit but that’s it, I won’t let them hold our money.

    I split our money across three banks, two primarily online and one brick and mortar at a large international bank, so if our B&M froze access, it would just cost us in fees (probably reimbursable but I should double check) to get cash from an ATM from the online banks. Then again, I normally pay for everything by credit card and pay online anyway from our online banks so losing access to our B&M bank is the least painful scenario. We would have more than one B&M but the minimums are atrocious. It would make sense to keep some cash in a local credit union when I have time to look that up.

  4. gasstationwithoutpumps Says:

    We have our personal and household accounts in separate institutions, plus there are retirement and investment accounts, though the only “quick” access to them is through transfers to the checking accounts. I stopped doing business with Bank of America decades ago (though the problems were more with the local branch than corporate management) and with Wells Fargo more recently:

  5. becca Says:

    I seem to have accumulated two of everything. Two retirement account custodians (one with my current 403(b) and one with my IRA), two main checking accounts. Only one online savings, but I don’t use it right now anyway since I’m doing enough transactions to get 3% out of my checkings; and technically there are savings accounts attached to the checking accounts too. I have two 529s. Only one HSA though, thank goodness.
    Two most-common-use rewards credit cards (plus two reserve credit cards).
    I don’t think it’s out of a conscious desire to have redundancy for the BoA is a rat-bastard kind of issue, but obviously I don’t mind the time it takes to keep tabs on everything (Mint helps) compared to the benefits of having various “walls” around my different reserves.

  6. ltg Says:

    My husband and I have a checking account with BoA. For a while now, we have been seeing a pop-up window asking us whether we are dual citizens!! (we are). He and I both see this question when we log in with our separate credentials. We never answer, but we are wondering why BoA assumes we are dual citizens. We have had this BoA account for more than 10 years and we never had an international transfer.
    I will close the account tomorrow. This is too scary.

  7. Susan Says:

    Ok, this is enough. We’ll be leaving BofA. What recommendations do you have?

    • nicoleandmaggie Says:

      I don’t know that I have good recommendations, and #2 and I have very different feelings about credit unions. (I think it’s a good idea to have both a local CU and a national bank, she is very against CU for reasons.) I will say I’m enjoying the interest on our capital one online-only account (that we opened because of a special extra cash offer), but I think people generally prefer Ally.

      Maybe the readers will have more suggestions? I can swap out the ask the grumpies on Friday (which was about eating gluten-free).

      • gasstationwithoutpumps Says:

        When my son and I were both looking for interest-bearing accounts, we ended up with Alliant Credit Union. For us, it is online only, except that we can use any credit-union ATM for deposits and withdrawals. The interest rate is a bit better than Ally or Capital One. It’s early days yet, but the only problem I’ve had was depositing the check for closing out the Wells Fargo account—it exceeded the maximum for ATM transactions, and I had to do a 2-step transfer (first in-person at my local credit union, then electronically from there). It is a good idea to retain one local brick-and-mortar institution in your portfolio.

      • Susan Says:

        Yes please! I’ve been googling and what is defined as “ethical” seems confusing (mostly synonymous with green?). I think we need: direct deposit, online/picture deposit, billpay, and ATMs, though we don’t use cash much. We’ll need to link to Vanguard. So, pretty simple, and online only is going to be fine I think, it’s been years since I’ve been to the B&M. We keep ~$10k in checking. We have a Capital One account already (from when it was ING).

      • Mr. Millionaire Says:

        I love Ally (not sponsored). The only drawback is that if I want to deposit cash (side hustle), I have to buy a money order and mail it in.

  8. Steph Says:

    I still have a very small account in my hometown bank, but effectively all of my money is in one national bank (not BofA). Hmm. It’s super annoying to get money from that bank because I don’t go there often, and I’m not even sure I have a working debit card anymore. Maybe I should reconsider that plan, though…

  9. Debbie M Says:

    I like consolidating, but I also like that my SO has separate accounts, although I did talk him into joining my local credit union and he talked me into joining his discount broker, so if those places got shut down, there would still be trouble.

    I have a local credit union without much money in it. I like to have a place to walk to and ask for things from a human. They just built a new branch near me, but when I went there asking for a bunch of $5’s and $1’s (for maid tips and for mass transit) before a vacation, I learned that only the ATM’s have money there, so I had to go to a different branch. Grr.

    Most of my money is in Alliant. I joined because of their HSA, which has since been discontinued. By then I liked it so much that I started using them for savings (currently 1.95% APY) and for their rewards credit card (2% on everything). If that got blocked, I’d have to take money from my investments–my Roth IRA and individual stocks are at Vanguard. If Vanguard got frozen, I guess I’d still be okay because of my pension and, later, Social Security, but it wouldn’t be good. If my pension disappeared, that wouldn’t be good. Four percent of my Roth IRA is only just over $600/month. Even combined with an early withdrawal of Social Security ($950/month), that would be pushing it. But I still have a house.

    Hmm, so I guess I could survive any one thing disappearing, but maybe not two (without having to find work somewhere).

  10. Leigh Says:

    Between the three of us (the joint accounts counting as a third person), we have cash spread across multiple places. We have some at a local credit union, some at Alliant, there used to be some at Vanguard and will put some back there later, some Series I Savings Bonds, and some at Ally because of that recent 1% promo. Plus, we each have some in our first bank accounts we opened when we were 6. What we should really start doing is keeping a small bit of cash at home for strong emergencies of ATMs being down or something.

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