Checking accounts keep cash easily accessible and are designed to cover short-term expenses, like rent and groceries. It's a common rule of thumb to keep one to two months' worth of expenses in a checking account, but many Americans aren't meeting this benchmark.
27% of Americans have less than $500 in their checking account, a recent CNBC Select and Dynata Banking Behaviors Survey found. Another 11% have a balance between $500 and $999 and 23% said they have between $1,000 and $4,999.
September 2023 CNBC Select x Dynata Banking Behaviors Survey
All of these figures are well below the $6,081 that the average American household spends in a month. About one third of survey respondents said they had more than $5,000 in their checking account.
Compare offers to find the best savings account
Checking account balances by household income
Household income plays a role in how much Americans have in their checking accounts.
The majority of respondents with a household income less than $50,000 reported having less than $500 in their checking account, data from the survey revealed.
The median household income in the U.S. is $74,580, according to the U.S. Census Bureau, and 63% of those making between $50,000 and $74,999 reported having checking account balances of $4,999 or less.
Yet, for those making $200,000 or more, over half reported having at least $10,000 in their checking account.
September 2023 CNBC Select x Dynata Banking Behaviors Survey
How to maximize your accounts
Whatever your situation, it's best practice to avoid common banking fees and save smarter so you can meet your financial goals quicker.
What to do if you have a low checking account balance
When literally every dollar counts, you need to make sure your account is not costing you anything. Yet checking accounts from the big banks charge over $5 each month, on average, just to maintain an account — that's $60 each year.
Banks will often waive monthly service fees with a minimum balance requirement. But when that's not a possibility, there are no-fee checking accounts that don't charge a monthly maintenance fee, have no minimum balance requirement and don't require an initial deposit.
These no-fee checking accounts are available nationwide and have large ATM networks:
Capital One 360 Checking®
Capital One Bank is a Member FDIC.
Monthly maintenance fee
$0
Minimum deposit to open
$0
Minimum balance
None
Annual Percentage Yield (APY)
0.10%
Free ATM network
70,000+ Capital One®, MoneyPass andAllpoint® ATMs
ATM fee reimbursem*nt
None
Overdraft fee
$0
Mobile check deposit
Yes
Terms apply.
Ally Bank Spending Account
Ally Bank is a Member FDIC.
Monthly maintenance fee
$0
Minimum deposit to open
$0
Minimum balance
None
Annual Percentage Yield (APY)
0.10% less than $15,000 minimum daily balance; 0.25% over $15,000 minimum daily balance
Free ATM network
43,000+ Allpoint® ATMs
ATM fee reimbursem*nt
Up to $10 per statement cycle
Overdraft fee
$0
Mobile check deposit
Yes
Terms apply.
Discover® Cashback Debit Checking
Discover® Bank is a Member FDIC.
Monthly maintenance fee
$0
Minimum deposit to open
$0
Minimum balance
None
Rewards
1% cash back on up to $3,000 in debit card purchases each month. See website for details by clicking "Learn More".
Free ATM network
60,000+ Allpoint® and MoneyPass® ATMs
ATM fee reimbursem*nt
None
Overdraft fee
$0
Mobile check deposit
Yes
Terms apply.
What to do if you have a high checking account balance
While it's not the case for the average American, it's possible to have too much cash in a checking account. What to be wary of? It could lead to overspending.
Scott Cole, a CFP at ColeFP and Wealth Management, shares a principle he talks about with his clients: Expenses expand to the income allowed. In other words, as your income grows your spending will rise along with it.
"If one considers checking as 'money to spend,' then one will almost naturally spend up to the limit whether the expense was actually a need or not," Cole explains. He cautions that having too much in a checking account may take away from some of the intentionality of spending and distract from other important and valuable things, like funding retirement, saving for a home and paying off credit card debt.
There's also the opportunity cost of getting higher returns on that money sitting in your checking account.
The national average APY on an interest checking account is just 0.07%. At that rate, any balance is earning next to nothing in interest.
A high-yield savings account is a good place to reroute some of that cash, especially as interest rates are around 5%, some even reaching 6% (albeit the latter with restrictions). A $10,000 balance in a checking account earning 0.07% APY would earn a measly $7 in a year. But that same amount in a high-yield savings account with 5% APY would pay $500 in interest in a year.
Here are some of the top high-yield savings accounts to consider for any excess cash in your checking account:
LendingClub LevelUp Savings Account
LendingClub Bank, N.A., Member FDIC
Annual Percentage Yield (APY)
5.30% (with monthly deposits of at least $250), or 4.80%
Minimum balance
None
Monthly fee
None
Maximum transactions
Excessive transactions fee
None
Overdraft fees
N/A
Offer checking account?
Yes
Offer ATM card?
Yes
Terms apply.
UFB Portfolio Savings
UFB Portfolio Savings is offered by Axos Bank ® , a Member FDIC.
Annual Percentage Yield (APY)
Up to 5.15%APY on any savings balance; add UFB Freedom Checking and meet checking account qualifications to get an additional up to0.20%APY on savings
Minimum balance
$0, no minimum deposit or balance needed for savings
Fees
No monthly maintenance or service fees
Overdraft fee
Overdraft fees may be charged, according to the terms; overdraft protection available
ATM access
Free ATM card with unlimited withdrawals
Maximum transactions
6 per month; terms apply
Terms apply.
Read our UFB Portfolio Savings review.
Western Alliance Bank High-Yield Savings Account
Western Alliance Bank is a Member FDIC.
Annual Percentage Yield (APY)
5.20% APY
Minimum balance
$1 minimum deposit
Monthly fee
None
Maximum transactions
Up to 6 transactions each month
Excessive transactions fee
The bank may charge fees for non-sufficient funds
Overdraft fee
No overdraft fee
Offer checking account?
No
Offer ATM card?
No
Terms apply.
Subscribe to the CNBC Select Newsletter!
Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox.Sign up here.
Survey methodology
TheCNBC SelectBanking Behaviors Survey of 1,151 Americans across the country was conducted online from Sept. 8, 2023 to Sept. 19, 2023 by Dynata. Survey respondents were nationally representative by gender, age, race and ethnicity using 2020 Census data. Women represented 50% while men represented 49% of respondents and spanned a wide variety of incomes. All those surveyed were 18 or older. The margin of error for the survey was +/-3%.
Why trust CNBC Select?
AtCNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every banking article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking products.While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Catch up on CNBC Select's in-depth coverage ofcredit cards,bankingandmoney, and follow us onTikTok,Facebook,InstagramandTwitterto stay up to date.
Read more
Here's why now is the perfect time to put your savings in a CD
Only 18% of Americans use this kind of savings account that earns more than 5% and is easy to set up
ATM fees hit record high in 2023 — here's how to avoid them altogether
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
