When most people think about checking accounts, they envision having one such account for themselves and maintaining it long-term. But did you realize that certain events warrant having a separate checking account set up either permanently or temporarily? Here are a few such events that you may encounter and why a dedicated checking account helps keep things smooth.

1. Your Wedding

Do you want or need to stay within your budget during wedding planning? Then consider the value of using a dedicated account for wedding funding and expenses. You'll always know what you have left, what has cleared, and how much you're spending in categories. And you can close it when the wedding is fully paid off, resulting in no effect on your new family finances. 

2. A Side Gig

While some people do realize that a business should have its own bank account, many don't realize that any entrepreneurial endeavor should have the same. There are two important reasons for this, even when the side gig is small. First, it helps demonstrate that you and your business — especially an LLC or corporation — are separate entities for liability purposes. Second, it provides the best way to keep your personal and business income and expenses separate. 

3. Inherited Money

If you inherit money, it may be vital that you maintain it separately from any personal relationships you enter into. Doing so is one of the few ways to protect an inheritance from being considered marital or community assets and divided in the event of a breakup or if one of you passes away before the other. 

4. Bankruptcy

You should never attempt to hide assets by moving money improperly before bankruptcy. However, opening an account in a new institution can help protect your assets in two particular circumstances. The first is when you receive potentially exempt income, such as Social Security. The second is when you owe your financial institution a debt and need to protect your account from seizure through setoffs.

5. Fundraisers

Any individuals or organization who plan a fundraiser may want to open an account specifically for this event or campaign. By maintaining it separately from other financial accounts, you can let stakeholders see what's going on without exposing your personal information. And it demonstrates a commitment to using donated funds properly, preventing fraud, and transparency.

Want to know more about opening a free checking account for a big event, an entrepreneurial goal, or a life change? Start by meeting with a banker at your financial institution today.

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