“Expert verified” means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced.
Bankrate is always editorially independent. While we adhere to strict , this post may contain references to products from our partners. Heres an explanation for . Our is to ensure everything we publish is objective, accurate and trustworthy. Bankrate logo
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our investing reporters and editors focus on the points consumers care about most — how to get started, the best brokers, types of investment accounts, how to choose investments and more — so you can feel confident when investing your money.
The investment information provided in this table is for informational and general educational purposes only and should not be construed as investment or financial advice. Bankrate does not offer advisory or brokerage services, nor does it provide individualized recommendations or personalized investment advice. Investment decisions should be based on an evaluation of your own personal financial situation, needs, risk tolerance and investment objectives. Investing involves risk including the potential loss of principal. Bankrate logo
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo
Wondering if you can juggle multiple brokerage accounts at once? The short answer is absolutely! Not only can you have 2 brokerage accounts but you can have several if that suits your investment strategy. In fact, having multiple accounts might actually be beneficial for many investors depending on your financial goals and investment style.
I’ve been exploring this topic extensively, and I’m excited to share what I’ve discovered about the advantages of maintaining multiple brokerage accounts, when it makes sense, and how to manage them effectively.
Why You Might Want Multiple Brokerage Accounts
When I first started investing, I thought one account would be enough. Boy, was I wrong! Here are some compelling reasons you might want to open more than one brokerage account:
1. Separating Investment Goals
One of the biggest advantages of having multiple brokerage accounts is the ability to organize your investments based on different financial goals. According to certified financial planner Chelsea Ransom-Cooper from Zenith Wealth Advisors, “When you’re thinking about opening more than one [brokerage account], it really has to do with your time horizon and goals.”
Some common investment goals you might want to separate include:
- Retirement savings (using IRAs or other tax-advantaged accounts)
- Building a house down payment (shorter-term horizon)
- Saving for a big expense like a wedding or dream vacation
- Funding a child’s education
- Active stock trading as a hobby
- Passive investing to supplement other savings
By keeping these goals in separate accounts, you can better track your progress toward each specific objective without getting confused or tempted to dip into funds earmarked for other purposes
2. Tax Diversification Benefits
Another smart reason to maintain multiple brokerage accounts is for tax diversification. Scott Sturgeon, a certified financial planner and founder of Oread Wealth Partners, points out that mixing tax-advantaged accounts with taxable accounts gives you more flexibility.
For example
- A taxable brokerage account for your active trading (where you’ll pay taxes on capital gains and dividends annually)
- A tax-advantaged account like an IRA, HSA, or 401(k) for long-term investments
This approach can help you optimize your tax situation both now and in the future. As Sturgeon explains, understanding “the tax ramifications of different accounts” can set you up for success “both in the near term and over a much longer time frame.”
3. Taking Advantage of Special Features
Different brokerages offer unique features and specialties that might appeal to different aspects of your investing style:
- Micro-investing apps like Acorns and Stash offer round-up features that let you invest spare change
- Robo-advisors provide automated rebalancing and tax optimization for hands-off investors
- Full-service brokerages might offer personalized financial advice
- Specialized trading platforms cater to active traders with advanced tools
By using multiple platforms, you can cherry-pick the best features from each one rather than settling for a single brokerage that might excel in some areas but fall short in others.
How to Decide If Multiple Accounts Are Right for You
Before opening several brokerage accounts, ask yourself these three key questions suggested by Scott Sturgeon:
- What’s the purpose of the account?
- What are my goals?
- What’s my time horizon?
These questions will help guide your decision about whether multiple accounts make sense for your situation.
A Smart Strategy for Multiple Accounts
If you’re considering having multiple accounts, here’s a strategy that Sturgeon has seen work well:
- Set up automatic contributions to a retirement account with diversified index funds based on your retirement goals.
- Use whatever is left over each month (after expenses and building cash reserves) as your “play money” for active trading.
This approach lets you ensure your long-term financial security while still having the freedom to experiment with more active investing strategies.
Sturgeon notes, “I don’t see a downside or a detriment to someone having a fun money account,” as long as it’s funded with leftover dollars after taking care of your primary financial responsibilities and keeping the riskier investments to “a certain portion of your investable assets.”
Potential Drawbacks of Having Multiple Brokerage Accounts
While there are many benefits to having multiple accounts, there are some challenges to be aware of:
1. Account Management Complexity
The more accounts you have, the harder they can be to keep track of. Ransom-Cooper warns that “it’s easier than you think to forget about the funds in one account,” and tracking overall performance becomes more difficult as your number of accounts grows.
2. Asset Allocation Challenges
Sturgeon points out that it can be “very difficult to track asset allocation across multiple platforms,” which might lead to overconcentration in certain investments or unintentional overlap between funds.
3. Administrative Headaches
More accounts means more tax forms, more passwords to remember, more apps to check, and generally more administrative overhead in your financial life.
How to Stay Organized with Multiple Brokerage Accounts
If you do decide to use multiple accounts, here are some tips to stay organized:
- Use account aggregation apps like Empower (formerly Personal Capital) to view all your investments in one place
- Consider working with a large brokerage or financial advisor that offers software to consolidate and track performance
- Create a simple spreadsheet to track your overall asset allocation across accounts
- Set calendar reminders to review all your accounts regularly
- Clearly label each account according to its purpose or goal
Real-World Examples of Multiple Brokerage Account Strategies
Here’s how I’ve seen successful investors use multiple brokerage accounts:
Example 1: The Retirement-Focused Investor
- Account 1: 401(k) through employer for automated contributions and matching
- Account 2: Roth IRA at a low-cost broker for tax diversification
- Account 3: Small taxable account for experimenting with individual stocks
Example 2: The Goal-Oriented Saver
- Account 1: Long-term retirement account with diversified ETFs
- Account 2: Medium-term account for house down payment (more conservative allocation)
- Account 3: Short-term account for upcoming wedding expenses (very conservative)
Example 3: The Investment Enthusiast
- Account 1: Core retirement savings in a robo-advisor for hands-off management
- Account 2: Active trading account for stock picking and learning about markets
- Account 3: Micro-investing app for spare change investing as a supplement
Questions to Ask Before Opening a New Brokerage Account
If you’re thinking about adding another account to your portfolio, ask yourself:
- Does this account serve a specific purpose different from my existing accounts?
- Does this brokerage offer features or benefits I can’t get from my current provider?
- Am I prepared to manage another account effectively?
- Will the benefits outweigh the added complexity?
Bottom Line: Multiple Accounts Can Be Beneficial
Having multiple brokerage accounts can be a smart strategy for many investors. By separating your investments based on goals, taking advantage of tax diversification, and leveraging the unique features of different platforms, you can potentially optimize your overall investment strategy.
The key is to make sure you have a clear purpose for each account and a system for staying organized. As Ransom-Cooper advises, consider “What type of investor do you want to be? How involved do you want to be? Let that lead your path.”
So yes, you can absolutely have 2 brokerage accounts—or more! The important thing is that your account structure supports your financial goals and investing style.
FAQs About Having Multiple Brokerage Accounts
Is there a limit to how many brokerage accounts I can have?
No, there’s no legal limit to the number of brokerage accounts you can open.
Will having multiple accounts affect my taxes?
Having multiple accounts doesn’t inherently change your tax situation, but it may make tax preparation more complex as you’ll receive more tax forms. The investments you choose and the types of accounts (taxable vs. tax-advantaged) will impact your taxes.
Do I need to report all my brokerage accounts to the IRS?
Yes, you should report all taxable investment income regardless of how many accounts you have. Brokerages will send you (and the IRS) tax forms for each account.
Can I transfer investments between different brokerage accounts?
Yes, you can typically transfer investments between brokerages through an ACAT (Automated Customer Account Transfer) process, though some restrictions may apply depending on the type of account and investments.
Will opening multiple accounts affect my credit score?
No, opening brokerage accounts does not impact your credit score since brokerages typically don’t run a credit check when you open an account.
Remember, the best account structure is the one that helps you achieve your financial goals while matching your personal investment style and organizational preferences. Whether that means one account or five, what matters most is having a clear strategy behind your choices.
How many brokerage accounts should you have?
One brokerage account may be the best way to organize your taxable investments. On the other hand, you might get the most out of your portfolio if it were spread across a handful of platforms with different features. In other words, there’s no “right” number of brokerage accounts for all investors — it depends.
With several accounts, you’d need to track your overall asset allocation, remember all your login credentials, gather tax forms and set your account beneficiaries, among other tasks. More accounts increase the chances that something could slip through the cracks. Owning just one brokerage account simplifies your money, and making investing easier can help you on your journey to build wealth.
Working with multiple brokerage firms could prove beneficial, too, depending on your investing strategy. For example, you may want to hold asset classes or funds that aren’t available from another broker or ensure your brokerage accounts each stay under the $500,000 threshold covered by SIPC insurance.
How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.
- There’s no limit to how many brokerage accounts you can have, but having more can complicate your finances.
- Managing your investments could cost less, through lower fees and reduced margin loan rates, if you have multiple brokerage accounts instead of one.
- If a brokerage firm doesn’t have all the perks you’re looking for — such as high interest rates on cash balances, robust research tools or new client bonuses — holding accounts across institutions can get you the best of what each has to offer.
The line between banks and brokerages continues to blur. Mega-banks such as Bank of America and Wells Fargo now offer brokerage services, while traditional brokers such as Charles Schwab, E-Trade and Interactive Brokers provide a range of banking services. Even many robo-advisors such as Wealthfront and Betterment combine the ability to invest with traditional banking functions.
Still, each institution has strengths and weaknesses. One broker may offer low trading commissions but average customer service, while another could have a great trading platform but no discounts for buying and selling mutual funds. Because of these differences, it may make sense for you to have more than one brokerage account.