How Much Money Should I Keep In My Checking Account?

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A checking account is an important financial tool that can make paying bills and managing your finances a lot easier. Yet, if you keep either too much or too little cash in your checking account, you could run into trouble.

The following guide will help you determine the right amount of money to maintain in your checking account and avoid problems when splitting your cash between your checking account and other deposit accounts that offer higher interest rates on your savings.

Average Checking Account Balance

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The average quarterly checking account balance in the United States ranged between $6,700 to $25,000 as of Q2 2022, according to data from the JPMorgan Chase Institute. According to its research, the highest income families had average balances that were between three and four times higher than families with the lowest incomes.

However, when you look at average quarterly checking account balances, it can skew the results. Some households, after all, have bank account balances that are quite large compared to others.

Instead, it can be helpful to consider median weekly checking account balances for a more accurate picture of what’s happening in the finances of American households. According to the JPMorgan Chase Institute, the median weekly U.S. checking account balance in Q2 2022 ranged from under $1,300 to just above $7,000.

The Federal Reserve’s 2019 Survey of Consumer Finances (SCF), the most recent data available, also shares helpful information on this subject. According to the survey, the conditional median transaction accounts balance (e.g., checking accounts, savings accounts, money market accounts, prepaid debit cards, and call deposit accounts) in 2019 was $5,300. More than 98% of consumers had at least one type of transaction account at the time of the survey.

Recommended Checking Accounts

Axos Rewards Checking Account

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at Axos

• Our Rating 5/5 How our ratings work Read the review
• APYUp to 3.30% More Info

  Earn up to 3.30% APY for completing qualifying activities.

• Minimum
  Deposit Required$50
• Intro Bonus Up to $300Expires June 30, 2024 More Info

  Use promo code AXOS300 and apply by June 30th, to earn up to a $300 bonus!

Axos Bank Rewards Checking gives customers the chance to earn up to a 3.30% APY on their deposits with no monthly fees. These are all terrific features for a checking account, but Axos is digital-only, so if you deal with cash regularly it’s probably not the best fit for you.

• Overview
• Pros & Cons

Overview

While it takes a bit of work to unlock the maximum interest rate, Axos Rewards Checking customers can potentially earn an impressive 3.30% APY. This account also does not include any monthly fees.

Read the review

Pros

• Strong APY compared to similar accounts
• No monthly maintenance fee or monthly minimum balance
• No overdraft or non-sufficient fund fees
• Unlimited domestic ATM fee reimbursements

Cons

• Minimum deposit required for account opening
• Several qualifying activities required to earn maximum interest
• No physical branch locations

Chase Total Checking® Account

Open Account

at Chase

• Our Rating 4/5 How our ratings work Read the review
• APYN/A
• Minimum
  Deposit RequiredN/A
• Intro Bonus $300Expires July 24, 2024 More Info

  New Chase checking customers enjoy a $300 bonus when you open a Chase Total Checking® account with qualifying activities

Chase Total Checking® is among the best entry-level accounts. It typically offers new customers a sign-up bonus, and it’s fairly simple to waive the $12 monthly fee. However, it's worth noting that it doesn’t offer many valuable features or benefits and it’s not an interest-bearing checking account.

• Overview
• Pros & Cons

Overview

Chase Total Checking® is a basic checking account that doesn’t offer many premium features. However, if you can easily meet the qualifications required for the new account bonus (and to waive its monthly fee), it’s a good option for those who want an entry-level account.

Read the review

Pros

• No minimum opening balance
• Multiple ways to waive monthly fee
• Access to nationwide Chase branches and ATM network

Cons

• Monthly maintenance fee
• Account does not earn interest

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Finding the Right Checking Account Balance for You

Understanding how much the average person keeps in their checking account can be helpful information. But it’s important to examine your personal budget and financial goals to determine the ideal amount to keep in your checking account. Your income and expenses also play significant roles in helping you find the right balance of cash to keep in your checking account and the money you should direct to other places.

In general, checking accounts don’t offer the highest interest rates available. Although, some of the best checking accounts may feature higher annual percentage yields than the competition. Therefore, many financial professionals recommend putting enough money in your checking account to cover your bills and living expenses for one to two months at most.

You may also want to add a checking account buffer for unexpected expenses. A checking account buffer can be a fixed amount of money, like $500 or $1,000, depending on the size of your household. Others prefer to make their buffer a percentage of their monthly expenses (e.g., 20%-30%).

It’s also important to pay attention to any checking account minimums that your bank may impose. For example, your bank or credit union might require you to maintain a certain average daily balance to avoid certain bank fees like a monthly maintenance fee. Of course, if you open a free checking account, you won’t have to worry about such expenses.

What to Do With the Rest of Your Cash

Once you figure out the right amount of money to keep in your checking account for bills, variable expenses, and a buffer for unexpected expenses, it’s wise to make a plan for the rest of your money. Of course, if you owe high-interest debt like credit cards, you’ll want to work toward paying down those balances as aggressively as you can.

It’s also important to create a healthy emergency fund to serve as a financial safety net. You’ll typically want to store your emergency fund somewhere besides your checking account, such as a high-yield savings account or a money market account. And you might even want to store your emergency savings with a different financial institution.

Once you have your debts under control and a handle on your emergency fund, it’s wise to branch out and look at other savings goals as well. You can use other deposit and investment accounts to try to maximize your money’s growth potential.

Recommended Savings Accounts

CIT Bank Platinum Savings Account

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Member FDIC.

• Our Rating 4.5/5 How our ratings work Read the review
• APY5.05% More Info

  Earn 5.05% APY on balances over $5,000. Balances of less than $5,000 earn 0.25% APY. Annual Percentage Yield is accurate as of July 27, 2023. Interest rates for the Platinum Savings account are variable and subject to change at any time without notice.

• Minimum
  Deposit Required$100
• Intro Bonus N/A

The CIT Bank Platinum Savings account offers one of the top APYs on the market right now, and CIT's flexible transfer options make it easy to access your money. So long as you're able to consistently maintain an account balance of $5,000 (the minimum amount required to earn this account's top APY) you'll likely find a lot of value in this account.

• Overview
• Pros & Cons

Overview

With the CIT Bank Platinum Savings Account, customers earn 5.05% APY on balances over $5,000. However, for accounts with less than $5,000, the APY falls to 0.25%. This account features a minimum opening deposit requirement of $100 and does not charge monthly maintenance fees. Accountholders also get free transfers to and from connected bank accounts, which even extends to non-CIT accounts.

Read the review

Pros

• Strong APY for balances over $5,000
• No monthly service fee
• Unlimited withdrawals (uncommon perk of savings accounts)
• Free electronic bank transfers to checking accounts (even if it isn't a CIT checking account)

Cons

• APY on lower balances is unimpressive
• No fee-free ATM network
• Minimum opening deposit required
• No physical branches

UFB Direct Secure Savings Account

Open Account

at UFB

• Our Rating 5/5 How our ratings work Read the review
• APY5.25% More Info

  UFB Direct breaks balances into five tiers, but, currently, there is only one interest rate.

• Minimum
  Deposit RequiredN/A
• Intro Bonus N/A

The UFB Direct Secure Savings Account has one of the highest interest rates we’ve seen for a high-yield savings account at up to 5.25% APY. Plus, there are no monthly fees and no minimum balance to open.

• Overview
• Pros & Cons

Overview

With one of the strongest high-yield savings interest rates on the market, as well as no monthly fees or minimum opening deposit, UFB Direct’s Secure Savings Account is an extremely attractive package.

Read the review

Pros

• Strong interest rate
• No maintenance fees or minimum monthly balances
• Free complimentary ATM card
• Mobile app and SMS banking

Cons

• No signup bonus
• No associated checking account

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How to Choose a Bank Account

When you’re looking for a bank or credit union to work with, it’s important to find a financial institution that’s a good fit for your specific needs. To help figure out the priorities you’re looking for in a financial institution, you can ask yourself the following questions.

• Do you want a bank or credit union that charges few fees? 
• Is in-person banking important to you? 
• Are you hoping to earn a competitive APY on your deposit account balances? 
• Would you like to earn a bank account bonus when you open a new account?

Once you identify your banking priorities, it should be easier to start the comparison process. For example, you’ll know to avoid considering the best online banks if you have your heart set on opening a bank account that offers in-person branch banking services to its customers. However, if you are more concerned about avoiding fees and earning the best interest rates possible, you’re likely to take a different approach with your research.

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Bottom Line

Figuring out a comfortable checking account balance for your budgeting needs is a personal decision. And you shouldn’t be afraid to try different budgeting approaches until you figure out the best method for you and your household.

If you find that you transfer more money to your savings account than you’re comfortable with in one month, you can always adjust your strategy moving forward. Just keep a close eye on your checking account while you’re in the trial phase to make sure you don’t overdraw your account until you find a system that works well for you.