January 15, 2026
Written by Timothy Moore
Certified Financial Education Instructor®
Certified Financial Education Instructor®
Timothy Moore, CFEI®, is a personal finance writer and editor. Find his work on Forbes, USA Today, The Penny Hoarder, Business Insider, TIME Magazine, SoFi, and more.
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Experts recommend keeping one to two months of monthly expenses in your checking account, plus a 30% buffer to protect yourself from declined transactions and overdraft fees.1,2
But there's more to it than simply keeping the right bank account balance. We'll walk you through how much to keep in your checking account and savings accounts, places to put your extra cash, and more.
A checking account's benefits include quick and convenient access to your money, making it easy to pay your monthly bills, like rent or mortgage, utilities, insurance, and loan payments. You can also use your checking account for everyday expenses, like groceries, gas, and trips to the doctor.
But most checking accounts don't earn much interest – if any at all. That's why it might be a good idea to put your extra funds in savings accounts or investment vehicles. (More on that in a minute.)
Okay, fine – but how much money should you keep in your checking account, specifically? Most experts recommend having enough money in your checking account to cover one or two months of expenses, plus a 30% buffer. Doing so may allow you to pay for your basic living expenses along with discretionary spending like dining out, streaming services, and new clothes.
Having a 30% buffer protects you if you overspend in any given month. A bit of extra money in your checking account can keep you from overdrawing – and getting slapped with annoying overdraft fees. (Some of the best checking accounts don't charge one.)
Some checking accounts have minimum balance requirements – and charge an additional fee if you drop below that amount. Look for checking accounts with no monthly maintenance fees so you don't have to sweat minimum balances and overdraft charges.
So now we know how much experts recommend keeping on hand in your checking account.
But if checking accounts earn less interest than savings accounts, money market accounts, certificates of deposit (CDs), and (usually) the stock market, why would you want to keep any money in checking? Here are a few reasons:
Avoiding overdrafts. Overdrafting your account can be more than just inconvenient – it can be costly, too. Overdraft fees often hover around $35 per transaction, and even if your bank doesn't charge them, having a negative balance can be stressful.3
Providing a cushion for pre-authorization holds. Some companies, like hotels and rental car agencies, might put a "hold" on your funds (for a refundable damage deposit, for example). Having an ample cushion allows you to enter into that transaction without worry.
Keeping liquid funds available. While investment vehicles offer a great opportunity to earn interest, they often keep your money tied up – or even put it at risk. With a CD, for example, you pledge to leave your money tied up in the account for a set term of what may be multiple years; money invested in the stock market has the potential to grow exponentially, but it's at risk of being lost entirely, too.
In most cases, you'll want to have both a checking account and a savings account. But how do you know how much money to keep in each?
One option would be to funnel funds beyond the one-to-two months of living expenses into your savings account, where it has the opportunity to earn interest. (A high-yield savings account can help with that, but just like checking accounts, saving accounts can also have account fees to look for and avoid.)
A savings account is also a great place to store an emergency fund, since the money is still fairly "liquid," or available to be turned into cash, but still might be earning some interest. Many experts suggest keeping three to six months of living expenses as an emergency fund, but even a $1,000 emergency fund is a lot better than nothing.4
Once you have enough money in your checking account, what should you do with any leftover funds? We've got a few suggestions:
While some types of checking accounts offer interest on the balance, it's not usually a competitive rate. You'll get the highest returns from a dedicated savings account, especially one of the high-yield variety. Good news: Many online banks offer HYSAs with little or no fees.
A certificate of deposit, or CD, allows you to earn a predictable amount of interest in exchange for agreeing to leave your money in the account without taking a withdrawal for a specific amount of time.
While CDs may have lower yields than stock market investments, they're usually lower risk – but beware. If you have to access your money early, you may pay a penalty.5
Money market accounts are sort of like a mix between checking and savings accounts. Although they're FDIC protected, just like your other deposit accounts, they can also offer higher interest growth than even high-yield savings accounts.6
Keep in mind, though, that the number of transactions you can make on your money market account each month is likely to be limited.
If you've paid down your debt and built a healthy emergency fund, consider investing your money in the stock market or real estate.
Saving for retirement with an IRA or 401(k) helps you increase your savings thanks to compound investing. Some employers may even match 401(k) contributions.
So, how much money should you keep in your checking account? The exact answer depends on your personal finances, monthly expenses, and spending habits. Using a checking account in tandem with a savings account can prevent overdrafts, meet financial goals, and earn a little interest along the way.
Ready to begin your personal finance journey? Here's how to open a checking account in four easy steps.
You should move money from checking to savings only when you have enough money in checking to cover your bills. Then you can transfer some money to savings to earn more interest on your funds.
If you'd rather not do this manually every month, you may be able to set up automatic transfers from checking to savings in your mobile banking app.
Many banks have minimum deposit requirements to open a new account. This minimum deposit will vary from one bank to the next and depends on the type of account you open.
However, you can open a bank account with no money. For example, there's no minimum deposit or balance requirement when you open a Chime checking account, so you can put as little (or as much) in your account as you'd like.
Experts recommend keeping one to two months of expenses in your checking account, plus a 30% buffer.1, 2 This ensures you have enough money to cover your recurring bills and everyday expenses – and reduces your risk of overdrafts.
In 2022, the latest data available from the Federal Reserve, the median amount of money an American family holds across all its deposit accounts (including checking accounts) was $8,000.7
But high earners likely skew that figure. According to one survey, more than a quarter of Americans have less than $500 in their checking account. About 11% have a balance between $500 and $999, and 23% keep between $1,000 and $4,999 in checking.8
To find out what the ideal checking account balance is for you, start by calculating your monthly expenses like rent, groceries, car payments, and debts. This gives you a baseline for the minimum amount you should have available in your checking account to cover these costs.
On top of that, it's a good idea to keep a buffer or cushion in your checking account to avoid overdrafts and cover unexpected expenses. This amount varies based on your comfort level, but a typical recommendation is to keep one to two weeks' worth of expenses as a cushion.
Aside from the basics, remember to factor in automatic payments, as well as consider your overall lifestyle and financial goals. If you're a subscription lover, factor in streaming services and activities like your gym membership. If you want to buy a home in the next decade, that's another important area to consider when determining how much to keep in your checking account.
While it's not against the rules to keep all your money in a checking account, it's not the best way to grow your wealth. A bank account with a lot of money can be a missed opportunity to earn interest.
Keep enough money in checking to cover one to two months of expenses. Beyond that, consider putting your money in a high-yield savings account, paying down high-interest debt, and even investing in the stock market.
Experts recommend keeping enough money in your checking account to cover one to two months of all your expenses, plus a 30% buffer.1,2 The buffer should help keep you from incurring non-sufficient funds fees and overdraft fees.
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