This Is How Much Money You Should Actually Keep in Your Checking Account

Checking accounts are often the segue between your income source (like a paycheck) and other destinations, like paying bills or saving money. Since many checking accounts don't have interest rates (or their APYs are tiny), they're not great for long-term money. That doesn't mean you shouldn't have money in your checking account; it just means you should have the right amount. 

Just how much should you be keeping in your checking account? Let's take a look. 

The right amount will depend on your monthly expenses 

A good rule of thumb is to keep one to two months' worth of expenses in your checking account. Any more than that and you're bordering on excess. You could keep three months' worth if you have the means and want to feel more secure. But at that point, you could be missing better opportunities elsewhere. 

If you don't have one to two months' worth of expenses, at the very least, try to keep enough to meet any minimums on your account. This is important if your checking account has a monthly fee. Often, banks will waive the fee if you can at least meet the monthly minimum. For example, if your checking account has a $1,500 minimum, then try to keep at least that much to avoid spending money on fees. 

Our Picks for the Best High-Yield Savings Accounts of 2024

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.80% Rate info 3.80% annual percentage yield as of December 28, 2024. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.80% Rate info 3.80% annual percentage yield as of December 28, 2024. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

Of course, you could avoid fees altogether by getting a free checking account. For instance, the SoFi Checking and Savings account charges no monthly fees and pays interest on checking account balances. Since it's an online bank, you won't get the in-person service from a big national branch. But it could save you money on fees. 

Why you shouldn't keep too much in your checking account

Again, checking accounts are segues: They're best for money you plan to use in the near term. They're not good for long-term savings goals, nor do they grow your money like savings accounts and CDs. 

True, some checking accounts have annual percentage rates (APYs). In fact, some of the best checking accounts can even compete with the rates on savings accounts and CDs. Even so, it's still prudent to separate savings from money you're about to spend. If you mix the two together, it's far easier to spend money that was earmarked for savings. For the sake of your goals, then, it's better to keep them apart. 

Checking accounts may have security risks, too. If your checking account comes with a debit card, someone could access that card and wipe out your account. While banks will work with you if you fall victim to unauthorized transactions, the process can take some time and you might not get all the money back. 

All in all, it's a good practice to separate savings from your checking account balance. Having one to two months' worth of expenses can cover you for unexpected transactions and help you avoid overdraft fees. But if your savings exceeds that number, you're better off opening a high-yield savings account and earning more interest on your balance.