Setting up multiple bank accounts

Using separate bank accounts for different types of spending

Some people prefer to set up separate bank accounts to cover different types of monthly spending.

This is one way of keeping money for important bills, like your rent, separate from your everyday spending money.

To help you decide how many accounts to open, you could group your spending into just a few main areas – for example:

  • One account for your rent or mortgage and regular bills
  • One account for savings, and
  • A main account for everything else.

Once you’ve opened a separate account for each type of spending, you’ll need to tell your bank to:

  • set up standing orders that automatically transfer money from your main account into the other accounts just after your Universal Credit or wages come in
  • set up a Direct Debit for each of your bills

Find out how to set up Direct Debits and standing orders.


  • You can spend from your main account knowing your important bills are paid
  • You can spread the cost of bills you might have to pay every few months, like electricity or gas


  • You’ll need to manage all your accounts carefully to make sure you stay in credit and don’t run up fees and charges

Choosing the right type of account

For both your main account and your ‘rent and bills’ account, look for a current or fee-free basic bank account that allows you to set up Direct Debits and standing orders.

Check you don’t have to pay a minimum amount into the account each month.

Read our guide ‘Choosing a bank account for your benefit payments

Using a comparison website to find a bank account

Comparison websites are a good starting point to find a bank account that’s right for you.

We recommend the following websites for comparing current accounts:

Go Compare*


Money Saving Expert

Money Supermarket

  • Go Compare allows you to use the government-backed Midata tool to securely upload your past transactions. This will give you current account recommendations based on your personal spending.


  • Comparison websites won’t give you the same results. Make sure you use more than one site before you decide.
  • Research the type of bank account you need before choosing one
  • Find out more in our guide to comparison sites.

Using a jam jar account

Jam jar accounts are designed to let you put your money into different ‘jars’ in the same account.

Some credit unions offer these accounts but we don’t recommend them as they charge a monthly fee of up to £24, plus fees to withdraw money.

Opening several fee-free bank accounts is a better way to separate your money into different types of spending.

However, some social landlords offer credit union jam jar accounts to their tenants, and might pay the monthly fee for them. If you can get a jam jar account without paying any fees, it might be worth considering.

Using real jam jars

You can use real containers like jam jars or envelopes to help you manage your money.

If you’re budgeting using real containers:

  • mark a jar for each of your spending needs
  • take cash from the jar to pay each bill as it comes in
  • take cash out before you go shopping

Try to stick to a rule of ‘when it’s gone, it’s gone’.

For example, if your petrol jar is empty don’t dip into your electricity jar instead.

If you have any cash left in the jars at the end month, try to get into the habit of putting it towards an emergency savings fund.


  • Having cash in containers reminds you how much you’re spending during the month – so may help you spend less.


  • Paying for everything in cash isn’t always the best way
  • You’ll miss out on the perks of paying bills by Direct Debit, like cheaper tariffs and automatic bill payment
  • You’ll need to be extra careful about security if you keep a lot of cash in the house

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