How much do you keep in your checking account?

[Anonymous]

Anonymous wrote:Currently have $1.2m in there. Usually around $500k-$1m. Too high and ridiculous. We got around $1m in bonuses that we haven’t moved out yet. We are too busy to constantly be moving money to our financial advisor or to our own accounts, and don’t have the time to research the market to make good investments. And we’ve been expecting a crash for about five years so it always seems like a bad time to put money in the markets which is why I always dither.

Set up direct deposit to brokerage

[Anonymous]

Anonymous wrote:

Anonymous wrote:Currently have $1.2m in there.

In checking?

Anonymous wrote:And we’ve been expecting a crash for about five years so it always seems like a bad time to put money in the markets which is why I always dither.

Oof. The S&P 500 is up 87% over the past five years. If you'd put $1.2 million in an S&P index fund five years ago, it would be worth $2.2 million today. But with inflation, that $1.2 million buys about 23% less than it did five years ago.

In other words, your fear of investing has cost you a lot of money. You should really find someone who can help you put that money somewhere that will earn a reasonable return at a risk level you can tolerate.

I'm the PP you're responding to. I eventually move money over to our financial planner. Maybe every 6 months or so. Of the $1.2m in there right now, $1m is from our bonuses this year. It's not like it's been there for years. So i'll probably move that over in the next couple months. But then within 6 months, our salary checks accumulate to another $600k or whatever. And even when i send said cash to my financial planner, he is also fairly conservative and isn't going to be dumb enough to drop $1m in the market on the first day. He spreads it out. Granted, he can make me more money in a cash account than BOA, but it's still not huge dollars. And i'm not going to set up an auto transfer to him. I want to discuss each time before sending.

Also, for those who think it's weird to keep in checking account but savings account is fine, I have a savings account that's been sitting idle for 20 years with something like $8k in it. Every year BOA sends me my tax interest statement, and it's usually around $1.23 interest per year. It's not like a savings account is going to net me enough interest in a year to make it worth my while to move stuff around. I earn around $1500/hr, so spending an hour to save $25 doesn't make sense for me.

[Anonymous]

You aren't concerned about the FDIC insurance limits?

[Anonymous]

Anonymous wrote:I have a savings account that's been sitting idle for 20 years with something like $8k in it. Every year BOA sends me my tax interest statement, and it's usually around $1.23 interest per year. It's not like a savings account is going to net me enough interest in a year to make it worth my while to move stuff around. I earn around $1500/hr, so spending an hour to save $25 doesn't make sense for me.

That's because your savings account sucks. $1.23 on $8000 is 0.015% interest. Put $1 million in an HYSA and you can earn at least $40k on it.

Which I realize is chump change to you. So carry on, I guess.

[Anonymous]

Our monthly bills are around $15k - mortgage is $4100 alone and then credit card bill at least $6k, sometimes twice that, plus all the other bills. I wish I could keep less than a thousand in cash. Plus we pay taxes quarterly (law firm partner) and that's tons of cash. So we have around $50 to $100k at any time.

[Anonymous]

I keep about 10k. It feels like money in the bank in a way the rest of the money in Fidelity doesn't. Even though I can tap into it any time.

I suppose it's because the Fidelity money market account is part of medium term savings for things like the inevitable new car a few years from today, which makes it off limits, whereas money in the bank checking account is money I can tap into for day to day living and emergencies so I want the peace of a mind from knowing I have up to 10k I can access any time.

[Anonymous]

About $10K

[Anonymous]

This is a great topic. We keep 5-10k in checking and the rest goes to saving and investments.

But reading these posts make me think I should only keep 5k in checking, since unless we go on vacation, 5k easily lasts for the month.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Currently have $1.2m in there. Usually around $500k-$1m. Too high and ridiculous. We got around $1m in bonuses that we haven’t moved out yet. We are too busy to constantly be moving money to our financial advisor or to our own accounts, and don’t have the time to research the market to make good investments. And we’ve been expecting a crash for about five years so it always seems like a bad time to put money in the markets which is why I always dither.

My husband’s parents are like this. Millions are sitting in a checking account. Wanting it there for ‘easy access in an emergency’ is their reasoning. They have tons of money and don’t ‘need’ returns to make them more but like the PP mentioned, moving even a fraction of it over would be making you easy returns. I shudder thinking about the millions they have let slip away keeping that amount in a regular checking account.

I always get so confused when people don’t just open a jumbo savings account with these large amounts of money rotting in a checking account and get interest by doing nothing. If they need the money, use the app, and switch money to accounts. Done.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Some of you guys are blowing my mind. I keep about $1k in checking and feel bad that I don't watch cash flow more closely so it can be lower. Most of our money is in savings and my credit card and mortgage come out of that account. Checking pays the utilities and student loans as well as a couple charitable donations that asked us not to use a credit card to save on fees.

I don’t understand what’s so earth shattering. You pay your mortgage from your savings. I pay mine from my checking. So I need to have enough cash in my checking to pay my monthly bills - mortgage, car payment, insurances, utilities, credit card bills, medical bills etc. if I kept the cash in a HYSA then I would need to be constantly moving it to checking.

Does your bank penalize for paying out of the savings account? I think some do, which was why most people would have separate checking and savings. These days, you can just park your $ in the hysa, earn interest the full month and have payments come out of there. No need to move it back around. Idk if it would be worthwhile for everyone, but the folks keeping 10k+ it would be tons extra in interest just doing that.

[Anonymous]

5k

[Anonymous]

I usually keep 100K or so in checking. It gets higher before we pay estimated quarterly taxes and lower once we do. If too much money builds up in checking I transfer more to our brokerage account. I run a lot of expenses through credit cards and I like not having to worry about transferring money back and forth for a tiny bit of extra yield from a savings or money market account.

[Anonymous]

Many of you are keeping your emergency account in a checking account. At least get a money market account - make the money work for you

[Anonymous]

The average checking account balance in the US is NOT $62k and the article OP links does not say that.

That figures includes checking, SAVINGS, MMA and other balances. And the median (not mean) is only $8k. Obviously there are many people with high 6 and 7 figure savings accounts, which is how the average gets to that number.

As for the question, our HHI is around 1.5 and our checking fluctuates from around $80k to $5k depending on time of month, bonus payouts, and other factors.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Some of you guys are blowing my mind. I keep about $1k in checking and feel bad that I don't watch cash flow more closely so it can be lower. Most of our money is in savings and my credit card and mortgage come out of that account. Checking pays the utilities and student loans as well as a couple charitable donations that asked us not to use a credit card to save on fees.

I don’t understand what’s so earth shattering. You pay your mortgage from your savings. I pay mine from my checking. So I need to have enough cash in my checking to pay my monthly bills - mortgage, car payment, insurances, utilities, credit card bills, medical bills etc. if I kept the cash in a HYSA then I would need to be constantly moving it to checking.

Oh keeping monthly spending and paying everything from checking makes total sense to me. I just mentioned how we did it because someone else asked about that. It's the people who regularly have six or seven figures in their checking that shocked me.