What is the average money in a bank account

The Federal Reserve gathers information about income, debt, assets, and other financial details every three years in the Survey of Consumer Finances SCF. The most recent SCF, from , measures holdings in checking accounts, savings accounts, money market accounts, and prepaid debit cards.

The median bank account balance for U. As you can see, the average is significantly higher than the median in these results. Not surprisingly, your household income influences the amount of money you keep in the bank. Higher-income households tend to have more in checking and savings. The SCF shows that of those in the bottom 20th percentile, only Again, the average bank account balance for each group is higher due to a small portion of households with significant savings.

Your job directly influences your income, so it makes sense the type of role you fill affects your bank account. The SCF shows the median bank account balances for the following types of workers:. There are also significant differences in bank account holdings by members of various races. The SCF reveals the median account balances using the categories below:. Those with children may wonder how others fare, and childless couples may not appreciate the benefits of dual-income-no-kids DINK status.

Families of various types have the following median transaction account holdings:. More education seems to run in tandem with higher bank account balances. Skip Navigation. Jennifer Liu. A mother holds her smiling toddler.

However, that amount varies greatly by age and household type. VIDEO The median bank account balance provides a clearer picture of the savings of American households because the average balances are heavily influenced by outliers at the top end that have large balances.

Additionally, as we explore in this study, the average bank account balance varies widely based upon other factors such as income, age, race and ethnicity, education, and employment status. Income is the strongest predictor of bank account balance, with Americans in the top decile of income having average bank account balances over 27 times higher than Americans in the lowest quintile. Having more income makes it easier to save money and therefore has a direct correlation with the amount of the average bank account balance.

Age has a strong correlation with bank account balances, as the accumulation of time gives people the ability to build their savings. The average bank account balance rises with age, peaking in the age range, before declining for those 75 and older as they deplete their funds in retirement.

Education has a direct correlation to earnings, and by extension, to the ability to save. Beyond your monthly living expenses and discretionary money, the major portion of the cash reserves in your bank account should consist of your emergency fund.

How much do you need? Everybody has a different opinion. Other experts say three months, while some say none at all if you have little debt, already have a lot of money saved in liquid investments , and have quality insurance. Should that fund really be in the bank? Some of those same experts will advise you to keep your five-figure emergency fund in an investment account with relatively safe allocations to earn more than the paltry interest you will receive in a savings account.

On the other hand, the recent months may have reshaped your thoughts on what feels "safe. The main issue is that the money should be instantly accessible if you need it. And also remember that money in a bank account is FDIC insured. Aim for building the fund to three months of expenses, then splitting your savings between a savings account and investments until you have six to eight months' worth tucked away.

After that, your savings should go into retirement and other goals—investing in something that earns more than a bank account. How much money you should keep in a savings account depends on your budget. Savings accounts are designed to receive deposits, rather than frequent withdrawals. In fact, you're generally allowed no more than six withdrawals a month from a savings account. They provide you a place to put money that is separate from your everyday banking needs—such as building an emergency fund or achieving a big savings goal like a dream vacation.

However, amid the financial strain of the COVID pandemic, the Federal Reserve introduced an interim rule so that banks no longer have to limit savings account withdrawals to six times a month. Instead, customers may make an unlimited number of transfers and withdrawals from their savings. Banks are not required to implement this change, so check with your bank for details. Checking accounts are designed to handle many transactions, such as paying bills or withdrawing cash you need on hand for daily expenses.

It should also include a buffer. David Ramsey recommends that the amount of the buffer should make you feel comfortable, but also not be an amount that would tempt you to overspend.

Plan to raise that amount over time. Elizabeth Warren and Amelia Warren Tyagi. Ramsey Solutions: EveryDollar. Suze Orman. Accessed Mar.