How Much Money Should You Keep in Your Checking Account?

woman putting cash in wallet

Most of us use our checking accounts on a daily basis. Every swipe of a debit card, every bill we pay and every personal check we write takes money out of our checking account. But, how much money should we be keeping in these super-convenient accounts? Let’s find out.

What’s your magic number?

According to a 2019 NerdWallet survey, the average American checking account balance is approximately $2,900 but this number may not be right for you.

Everyone’s financial realities are different, and because of that, we have different answers to the question of how much money we should be keeping in our checking accounts. The general rule of thumb is to try to have one or two months of living expenses in it at all times. Some experts recommend adding 30 percent to this number as an extra cushion.

To determine your exact living expenses, track your spending over several months, including all bills and impulse spending.

Why keep that much in your checking account?

Your checking account is your transactional account. This is where you’ll draw the money for all of your spending throughout the month, so you’ll want to be sure you have enough funds to cover those expenses. But it goes deeper than that. Here are three reasons why you should keep your checking account well-padded at all times.

1. Avoid overdrafts. Even high-income earners can miscalculate their spending and end up with an overdrawn account. Why risk being charged overdraft fees for every transaction when you can easily avoid them? Here at Partner Colorado, you can also sign up for an Overdraft Line of Credit to advance money into your checking account anytime you need it and never bounce a check again.

2. Provide a cushion for pre-authorization holds. Some merchants place a pre-authorization hold on your debit card until the transaction completes. These holds can reduce your available checking account balance. Keeping your account well-funded allows you to comfortably accommodate the holds without fearing a negative balance.

3. Keep liquid funds available. A robust checking account means access to cash is just an ATM transaction away. While most vendors accept various forms of payment, it’s helpful to know you have cash available if, and when you need it.

Can you keep too much in your checking account?

Having an overstuffed checking account may mean you’re missing out on higher returns you could be earning elsewhere like a Certificate of Deposit.

Once you’ve determined exactly how much money you should be keeping in your checking account, look into other options for the rest of your funds. Speak with a Partner Colorado representative to learn about our savings options and other high-yield options.

You could be getting the best of both worlds. A checking account that also earns interest— with our High-Interest Checking account you can earn up to 3.50% APY¹ in addition to other benefits.

It’s also important to pick a checking account with the most benefits possible. That’s why we offer a wide variety of checking account options —so you can choose the mix of features and benefits that’s right for you. These general rules will help you determine the right amount to keep in your checking account.




APY = Annual Percentage Yield ¹3.50% APY displayed is paid on average daily balances up to $10,000.00, 0.50% APY between $10,001.00-$25,000.00 and 0.10% APY on remaining balance and/or non-qualifying accounts. To qualify for High Interest Checking member must meet the following three (3) requirements: (1) Complete twenty (20) signature based debit card transactions ($5 minimum per transaction) during the month; (2) Utilize eStatements and (3) Use Online or Mobile Banking with a valid e-mail address. Non-qualifying High Interest Checking accounts will be assessed a monthly fee, see fee schedule for applicable fees. Rate is valid as of 05/01/19, rates are subject to change without notice.