You might feel like you’re crushing it if you have $10,000 sitting in your checking account. But what if that cash could be working harder for you? While it’s necessary to have some cash on hand, keeping too much in a checking account could mean missing out on easy earnings.
Instead of letting your money sit idle, you could be growing it with zero effort. Let’s dive into what the right amount is for you to keep in your checking account.
How much should you keep in a checking account?
A checking account is designed for everyday spending like groceries, bills, and rent. But it’s not meant for storing large sums of money. Most financial experts suggest keeping only one to two months’ worth of living expenses in a checking account. This ensures you have quick access to funds without missing out on better opportunities to grow your money.
So, if your monthly expenses are $6,000, you probably need about $12,000 in your checking account. In this case, $10,000 in your checking account wouldn’t quite be enough to meet expert recommendations. If your monthly expenses are $3,000, however, then $10,000 would be overshooting that goal by about $4,000 and you should consider moving the excess elsewhere.
Our Picks for the Best High-Yield Savings Accounts of 2025
American Express® High Yield Savings Member FDIC. APY 3.70%
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3.70%
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SoFi Checking and Savings Member FDIC. APY up to 3.80%²
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up to 3.80%²
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Capital One 360 Performance Savings Member FDIC. APY 3.70%
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3.70%
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- You’re missing out on interest: Most checking accounts offer little to no interest – often 0.01% APY. That means your money isn’t growing. On the other hand, high-yield savings accounts (HYSAs) can offer rates of 4.00% or more.
- Losing out on retirement savings returns: Keeping money that you’re not spending in your checking account means it’s not working toward your retirement goals. On average, the S&P 500 Index has returned 10% annually. Putting your excess cash in a tax-advantaged retirement account puts it to work for your golden years.
- Inflation eats away at your money: When prices rise, the value of cash sitting in low-earning accounts decreases. An HYSA helps combat this by giving your money a chance to grow, helping you keep pace with rising costs.
The smart move: Open a high-yield savings account
High-yield savings accounts offer the perfect balance: your money stays safe, accessible, and earns significantly more interest than a traditional checking account — the best accounts earn over 4.00%. Plus, many HYSAs have no monthly fees or minimum balance requirements.
You might be able to start earning a return on your cash that’s 400 times higher than your checking account provides. Check out our list of best high-yield savings accounts and open one today.
Opening an account takes just a few minutes, and you can easily transfer money over from your old bank.
- FDIC-insured safety: Just like checking accounts, most HYSAs are insured up to $250,000 per depositor, per bank.
- Great mobile apps: Most high-yield savings accounts are offered by online banks. That means you can do all your banking on your phone.
- Easy access: Unlike other interest-earning accounts like CDs, an HYSA allows you the flexibility to access your savings whenever you need to.
What are you waiting for?
While it’s tempting to keep a large balance in your checking account for peace of mind, it’s not the smartest financial move. With a high-yield savings account, you can still keep your money accessible — while earning significantly more in interest.
