How Much Cash to Keep in Your Checking vs. Savings Account

Aim for about one to two months’ worth of living expenses in checking, plus a 30% buffer, and another three to six months' worth in savings.

Alice HolbrookApr 5, 2021
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The more cash in your checking account, the better, right? Not necessarily.

Money in a checking account is easy to access, and keeping balances above the bare minimum can help you avoid monthly maintenance fees. But having a bloated checking account means you're missing out on higher returns in a savings or retirement account.

The average checking account balance among Americans with checking accounts is about $2,900 and the median is $1,250, according to a 2019 NerdWallet survey, conducted online by The Harris Poll. The right number for you might be higher or lower. It's all about finding out what works for your budget.

Here’s a quick look at how much cash to keep in your checking and savings accounts.

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Deposits are FDIC Insured

One Save

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Min. balance for APY


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Member FDIC

Comenity Direct High Yield Savings Account

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Min. balance for APY


Track your monthly spending

For three months, keep a daily spending log to find out how much money should be in your checking account. Include credit card purchases and payments that are automatically deducted from your checking account, like gym membership fees or loan payments.

How much cash to keep in checking: One to two months’ worth of living expenses, based on the spending log, plus a 30% buffer. Why the buffer? Banks earn billions of dollars from fees charged to customers who overdraw on their account or bounce a check. And running afoul of minimum balance requirements could mean being charged a monthly fee by your bank — so it’s best to have a cushion.

Know where every dollar goes
Find ways to spend more on the things you love, and less on the things you don’t.

Put additional cash somewhere more profitable

Now that you’ve arrived at how much you’ll keep in your checking account, direct anything extra someplace where it can earn interest. Online-only banks tend to offer the best rates on savings, including annual percentage yields around 0.40%. That is significantly higher than the national average — which means it'll put more money in your account, no matter how much you contribute. You can read more about some of NerdWallet's favorite high-yield savings accounts here.

How much cash to keep in savings: Experts generally recommended keeping three to six months' worth of living expenses in your emergency savings fund.

Once your savings account holds that amount, consider opening an additional retirement account or increasing your contributions to existing retirement funds. Those include 401(k)s and individual retirement accounts.

Keeping the right amount of cash in your checking and savings accounts ensures that you’re able to cover your daily needs and emergencies, avoid unnecessary bank fees and grow your long-term savings. Again, it's about finding what's right for you, not having the average checking account balance.

Frequently asked questions

It’s advisable to have both types of bank accounts. You can:

  • Use a checking account for spending and paying off expenses, and

  • Use a savings account to build and hold your emergency fund while earning interest.

An amount exceeding $250,000 could be considered too much cash to have in a savings account. That’s because $250,000 is the limit for standard deposit insurance coverage per depositor, per FDIC-insured bank, per ownership category. If you keep more than $250,000 in your savings account, any money over that amount won’t be covered in the event that the bank fails. The amount in excess of $250,000 could be lost.

The recommended amount of cash to keep in savings for emergencies is three to six months’ worth of living expenses.

It’s a good idea to keep one to two months’ worth of living expenses plus a 30% buffer in your checking account.

The median balance among different types of bank accounts is $5,300, according to the Federal Reserve’s 2019 Survey of Consumer Finance. That includes checking accounts, savings accounts, money market accounts and prepaid debit cards.

The median checking account balance is $1,250, according to a 2019 NerdWallet survey, conducted online by The Harris Poll.

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