Should I Open a Second Bank Account Exclusively for Online Trading Security?
Here you'll find out whether it's a smart decision to open a second bank account exclusively for online trading security and what other benefits come with it.
Published June 12, 2021.
It is always a good idea to have a second bank account, whether it is because you have a decent amount of money or problems with digital security. Even if it is one of the chief financial institutions that have invested vast sums of money in their online infrastructure, anything can happen.
It does not need to be exclusively for online trading security.
Opening Accounts on Trading Platforms
That said, you might not need to open a second bank account for online trading if you do not want to go through the hassle. Instead, you can always sign up for a trading platform for the sole purpose of buying and selling stocks, ETFs, or cryptocurrencies.
You do not need to use your primary bank for your investing needs, although this might be a good idea for long-term investing objectives.
Robinhood, Interactive Brokers, WealthSimple, or the myriad of other online trading platforms, allow you to take advantage of zero-commission trading. All you need to do is deposit funds from your main bank account to these outlets.
These entities have bare-bones trading or consist of the more advanced features, such as margin or options.
Opening a Second Bank Account
Ultimately, open a second bank account regardless of your trading endeavors. This account could be used similarly to the old paper envelope system: you have your main account for your bills, paycheck deposits, and investments and a second account for saving for your child's tuition, a down payment on a house, and investing in stocks with the cash you can afford to lose.
Also, there is a $250,000 cap from the FDIC. A second account can ensure all of your capital is insured against bank failures!