How much do you keep in checking?

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LivinGood
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How much do you keep in checking?

Post by LivinGood » Fri Feb 01, 2019 12:31 am

I currently have a ROTH through Vanguard, a high yield savings account at CIT, a savings account at my local bank(.35% interest), and a checking account at the same bank. Wanna ditch the local savings account and spread the funds out between the checking and high yield savings. How much on average do you keep in a checking account? Is having a 8-10K checking balance out of the ordinary? Frowned upon? Just trying to simplify. Thanks.

MotoTrojan
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Re: How much do you keep in checking?

Post by MotoTrojan » Fri Feb 01, 2019 12:36 am

LivinGood wrote:
Fri Feb 01, 2019 12:31 am
I currently have a ROTH through Vanguard, a high yield savings account at CIT, a savings account at my local bank(.35% interest), and a checking account at the same bank. Wanna ditch the local savings account and spread the funds out between the checking and high yield savings. How much on average do you keep in a checking account? Is having a 8-10K checking balance out of the ordinary? Frowned upon? Just trying to simplify. Thanks.
I enjoy managing (playing with) my finances so I maintain a spreadsheet which estimates bi-weekly balances based on recurring and one-off income/expenses. I don't like checking to get below $1000 but that would usually only be for ~1 day (pay rent day before I get paid). Average is closer to $3.5K.

If I were you and wanted simplicity I'd probably try to maintain a minimal balance and then keep a $2500 buffer in the 0.35% savings (assuming fee-free overdraft transfer) and the rest in CIT/Roth per my AA.

littleseedsofwealth
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Re: How much do you keep in checking?

Post by littleseedsofwealth » Fri Feb 01, 2019 12:36 am

I have about 1.5 months of living expenses in my checking account. You can always move funds from the high yield savings account to your checking account if necessary (I don't think you need to be able to do this more than a couple times per month).

pasadena
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Re: How much do you keep in checking?

Post by pasadena » Fri Feb 01, 2019 12:38 am

1 month of expenses at the beginning of the month, less than $200 at the end of the month.

b.lock
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Re: How much do you keep in checking?

Post by b.lock » Fri Feb 01, 2019 12:47 am

I try to keep about $2000 - $3000, which is about 1 month's expenses. Sometimes it creeps up higher than that and I'll transfer it to my brokerage. Every once in a while it goes lower and I'll make sure to build up the balance again. If it goes into the negative it will automatically transfer from my savings account, but that's a pretty rare event.

furryhusky
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Re: How much do you keep in checking?

Post by furryhusky » Fri Feb 01, 2019 12:48 am

Solid 3 months expenses but not a dime over.

dandinsac
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Re: How much do you keep in checking?

Post by dandinsac » Fri Feb 01, 2019 12:51 am

$10K above my credit card balance. I look at it once a month or so and most times move funds into my brokerage account. It has simplified my life not to worry about it.

gwrvmd
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Re: How much do you keep in checking?

Post by gwrvmd » Fri Feb 01, 2019 12:57 am

It depends on how you use them
I have my checking account at Pen Fed. It has very good CD rates. I now have 2 relatively large 2.8% CDs in my checking account. Is it my checking account or is it my savings account?.....I don't have a separate savings account so I guess it is both
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catdude
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Re: How much do you keep in checking?

Post by catdude » Fri Feb 01, 2019 1:04 am

In recent years I've been keeping $8 - 10K in my checking account, earning next to nothing, but I just decided to move most of that to Vanguard's Prime Money Market Fund and get a little income....
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Username1
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Re: How much do you keep in checking?

Post by Username1 » Fri Feb 01, 2019 1:47 am

1 month worth of expenses.

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Sheepdog
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Re: How much do you keep in checking?

Post by Sheepdog » Fri Feb 01, 2019 1:54 am

To maintain "free" checking my average running balance must be maintained at $3000 or more, so I do. My actual balance at any time can be any thing, but the average is above $3000
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ladycat
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Re: How much do you keep in checking?

Post by ladycat » Fri Feb 01, 2019 1:55 am

Not much more than 1 month's expenses, with no overdraft protection to the linked savings account. When you write a check, you've given out your account number, so I think that account is one of the most vulnerable to bad actors.

treadingwater
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Re: How much do you keep in checking?

Post by treadingwater » Fri Feb 01, 2019 2:02 am

2k-4k. Enough to cover monthly expenses. 15k in high yield savings at capital 1 which we add to each payday. When that creeps up then tbills or ibonds.
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AbelArcher
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Re: How much do you keep in checking?

Post by AbelArcher » Fri Feb 01, 2019 2:14 am

I start each month with a balance of $25 in my checking account. I use Ally bank and have both checking and savings through them so anything above my beginning balance is placed in a high yield savings account. Given the fact you can easily transfer funds from savings to checking with Ally and no minimums I see no reason to keep anything more in checking.

SQRT
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Re: How much do you keep in checking?

Post by SQRT » Fri Feb 01, 2019 6:02 am

I have several checking accounts. Two currencies (US and Cdn). Two different banking systems (US and Canada). Can get a little complicated having the right amounts in each place. Use one bank to make transfers as easy as possible. Generally, in total, keep about $100k spread amongst the various accounts. Obviously my case is different than most.

As a rule of thumb, you might want to keep a month or two of expenses (that go through your checking account) in that checking account. If your cash flows are predictable you can probably keep a minimum in the checking account. If it’s easy and “free” to transfer funds from your savings account to your checking account you could keep much less? Really, this isn’t rocket science, and given the wide range of responses, I would say as a general rule, there is no general framework for deciding on how much to keep in your checking account.
Last edited by SQRT on Fri Feb 01, 2019 11:03 am, edited 1 time in total.

IowaFarmBoy
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Re: How much do you keep in checking?

Post by IowaFarmBoy » Fri Feb 01, 2019 6:09 am

I also keep about 1 months expenses. This fluctuates a little bit based on paydays and when certain payments hit but it provides a nice cushion so I'm not worrying about keeping enough in it but not so much I feel like I am missing out on interest.

indexonlyplease
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Re: How much do you keep in checking?

Post by indexonlyplease » Fri Feb 01, 2019 6:12 am

My check is direct deposit into checking. At the end of the month whatever is left over I roll into savings. The when savings grows I roll into Vangaurd PMM. I did have multiple savings for budget items but know I just have one checking one savings and Vanguard PMM. Keeping it simple and not chasing yields.

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RickBoglehead
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Re: How much do you keep in checking?

Post by RickBoglehead » Fri Feb 01, 2019 6:13 am

AbelArcher wrote:
Fri Feb 01, 2019 2:14 am
I start each month with a balance of $25 in my checking account. I use Ally bank and have both checking and savings through them so anything above my beginning balance is placed in a high yield savings account. Given the fact you can easily transfer funds from savings to checking with Ally and no minimums I see no reason to keep anything more in checking.
This ^^^^

I keep $100 though. Ally will automatically draft from savings if I mess up, but I don't. I also keep $100 locally in checking at my B&M bank.

Keeping thousands at low/no interest, or tens of thousands, is very un-Boglehead.
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heikejohn1
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Re: How much do you keep in checking?

Post by heikejohn1 » Fri Feb 01, 2019 6:38 am

I keep about 10K in our high yield checking. That's the max they pay the 3.5% interest. The rest of the cash is in Vanguard MM for Emergency fund, future car fund, future travel expenses, future home repairs, etc...

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Toons
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Re: How much do you keep in checking?

Post by Toons » Fri Feb 01, 2019 7:13 am

5k



:wink:
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Rainmaker41
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Re: How much do you keep in checking?

Post by Rainmaker41 » Fri Feb 01, 2019 7:43 am

We have checking and savings at Ally Bank (online). We keep 1 month of expenses in checking at the start of every month after credit cards are paid off from the prior month’s spending and before rent is paid. If needed we can instantly transfer money from savings to checking. We have another month or so of expenses in a brick and mortar bank that we never use. If our transactional checking account was with a separate institution from our savings we’d probably keep more at that institution. We keep 6 months’ expenses in cash accounts overall.

The Wizard
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Re: How much do you keep in checking?

Post by The Wizard » Fri Feb 01, 2019 8:10 am

I keep up to $10k in checking after all bills and CC balances are paid. Excess beyond that I move into my taxable investment account.

I have lumpy travel expenses in retirement and I just did a Roth conversion in mid December that required a $3500 estimated tax payment be made. So keeping a goodly amount in checking works for me...
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trirod
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Re: How much do you keep in checking?

Post by trirod » Fri Feb 01, 2019 8:25 am

I keep my main checking account at around $10k. Not super efficient to do that but it’s worth it to me not to have to keep a really close eye on what credit card bills are coming up and worry about bouncing a payment.

daheld
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Re: How much do you keep in checking?

Post by daheld » Fri Feb 01, 2019 8:26 am

$10,000 in checking. About 6 months worth of spending in money market accounts. We keep the minimum required to maintain free checking and such in our bank's money market, the rest in Vanguard money market fund.

260chrisb
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Re: How much do you keep in checking?

Post by 260chrisb » Fri Feb 01, 2019 8:32 am

About 3-4 months of expenses. Over the next several years as I eye retirement it will likely become 6-9 months worth. For me, having easy liquidity is a pretty good feeling. Not that the prime money market fund doesn't offer the same, it's just that I don't plan to touch that unless something drastic happens.

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SagaciousTraveler
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Re: How much do you keep in checking?

Post by SagaciousTraveler » Fri Feb 01, 2019 8:47 am

Maximum of $50.

I move money into my Fidelity CMA when we are ready to use BillPay, write a check or use the ATM.

Why? After much back and forth with Fidelity, they refuse to reduce our debit card transaction limit to $0 or $1 (we don't use the debit side of the card, ATM only). I understand Fidelity has a zero-liability fraud for the CMA accounts, however if for example $1000 was fraudulently taken from my account there would still be a delay in getting that money back. We are ok waiting for $50.

bloom2708
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Re: How much do you keep in checking?

Post by bloom2708 » Fri Feb 01, 2019 8:49 am

$5k is my $0. :|
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KarenC
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Re: How much do you keep in checking?

Post by KarenC » Fri Feb 01, 2019 8:50 am

About $1,000.
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golfer292
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Re: How much do you keep in checking?

Post by golfer292 » Fri Feb 01, 2019 8:56 am

LivinGood wrote:
Fri Feb 01, 2019 12:31 am
I currently have a ROTH through Vanguard, a high yield savings account at CIT, a savings account at my local bank(.35% interest), and a checking account at the same bank. Wanna ditch the local savings account and spread the funds out between the checking and high yield savings. How much on average do you keep in a checking account? Is having a 8-10K checking balance out of the ordinary? Frowned upon? Just trying to simplify. Thanks.
I keep two months of spending in checking. I keep most of my accounts at Fidelity. The exception. I like my local credit union for checking. They offer free services like notary, certified checks, etc.

Filetmerlot
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Re: How much do you keep in checking?

Post by Filetmerlot » Fri Feb 01, 2019 8:59 am

Average Daily balance probably less than $300. Paycheck goes in there and then it gets transferred out to various accounts and I'm left with a few hundred after that for the next couple weeks.

adestefan
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Re: How much do you keep in checking?

Post by adestefan » Fri Feb 01, 2019 9:01 am

I'm amazed at the people that are keeping thousands in an account to maintain free checking. There are plenty of online banks or local credit unions that offer free checking with no or minimal balance requirements.

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Smorgasbord
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Re: How much do you keep in checking?

Post by Smorgasbord » Fri Feb 01, 2019 9:04 am

Over the past few months, my checking balances have ranged from $2,500 to $20,000. A lot has to do with business expenses, and getting reimbursed for those expenses.

MikeG62
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Re: How much do you keep in checking?

Post by MikeG62 » Fri Feb 01, 2019 9:09 am

Sheepdog wrote:
Fri Feb 01, 2019 1:54 am
To maintain "free" checking my average running balance must be maintained at $3000 or more, so I do. My actual balance at any time can be any thing, but the average is above $3000
+1, except for me the minimum average daily balance must be at least $1,500 (BofA checking).

My average daily last year was around $12,000. I could actively manage the balance closer to the minimum and maybe hold the excess (call it $10,000) in an online savings account. However, with an opportunity cost of roughly $220 pre-tax, this has not risen up on the priority list of things to do. More active monitoring is not without its own cost (in terms of time and effort) as is the possibility of needing more cash on short notice which causes the balance to drop below the minimum (although its unlikely that would result in a monthly maintenance fee).

I do have access to a considerable amount of cash that I can get my hands pretty quickly (funds in MM funds or treasuries or online savings). I view this more as the short end of my fixed income allocation as much as cash (given the yields being earned). I do not consider it cash in a checking account.
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TierArtz
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Re: How much do you keep in checking?

Post by TierArtz » Fri Feb 01, 2019 9:15 am

Between $500 and $10,000. Projected income and outflows are recorded a couple of months in advance in a Quicken account register. I move enough to Vanguard PMM to leave about $500 between paying my monthly credit card balance and the next deposit. I keep $10,000 in savings in case there is an unexpected expense bump.

alfaspider
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Re: How much do you keep in checking?

Post by alfaspider » Fri Feb 01, 2019 9:16 am

About two month expenses most of the time. Our expenses are quite variable, so one month expense would require too much monitoring to avoid overdrafts. I run an excess cash sweep every month into the brokerage accounts.

BogleMelon
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Re: How much do you keep in checking?

Post by BogleMelon » Fri Feb 01, 2019 9:22 am

Enough to make it till the next paycheck. My saving account is in the same bank, so if I needed some more cash, I would do a same (moment) transfer.
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daheld
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Re: How much do you keep in checking?

Post by daheld » Fri Feb 01, 2019 9:22 am

adestefan wrote:
Fri Feb 01, 2019 9:01 am
I'm amazed at the people that are keeping thousands in an account to maintain free checking. There are plenty of online banks or local credit unions that offer free checking with no or minimal balance requirements.
I get this criticism in general, but if we keep a minimum balance between checking and money market we qualify for free checking AND a high yield APY on the money market. A local credit union might be a good option, but I'm a person who likes to be able to go see someone face to face if I have an issue, so online banks are a no go for me. Mostly, I am not interested in the hassle of switching everything over to another banking institution.

lostdog
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Re: How much do you keep in checking?

Post by lostdog » Fri Feb 01, 2019 9:23 am

$100 in checking.

When the paycheck comes in, we pay all of the bills and anything above $100 gets invested or the added to the cash fund in the Vanguard Federal Money Market sweep account. I believe the money should always be working for us. We float using the credit card. The credit card company can eat the opportunity cost.
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Broken Man 1999
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Re: How much do you keep in checking?

Post by Broken Man 1999 » Fri Feb 01, 2019 9:51 am

I keep just enough to pay bills due. It varies, as does my withdrawals from retirement accounts used to keep enough in the account to not bounce checks.

When all bills are paid, I might show a few hundred dollars left, as a couple of my BillPay folks are notorious for not cashing their checks immediately.

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chazas
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Re: How much do you keep in checking?

Post by chazas » Fri Feb 01, 2019 9:56 am

I try not to cut it too close but only enough for one month's expenses with a reasonable cushion.

LiterallyIronic
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Re: How much do you keep in checking?

Post by LiterallyIronic » Fri Feb 01, 2019 10:01 am

At least $6,000 sits in checking at all times and at least $10,000 combined between checking and savings. They both get the same interest rate (0.01%, yay! /s), so it doesn't matter which one they're in. But that's our emergency fund, so it stays at least $10,000.

The Wizard
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Re: How much do you keep in checking?

Post by The Wizard » Fri Feb 01, 2019 10:01 am

adestefan wrote:
Fri Feb 01, 2019 9:01 am
I'm amazed at the people that are keeping thousands in an account to maintain free checking. There are plenty of online banks or local credit unions that offer free checking with no or minimal balance requirements.
That's not my reason.
My CU has free checking, no min balance.
So I keep thousands in there so it's ready to spend at the drop of a hat.
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mak1277
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Re: How much do you keep in checking?

Post by mak1277 » Fri Feb 01, 2019 10:04 am

My goal at retirement is to keep 3 years of expenses in cash. I know this is hyper conservative but that's where I sit right now, about 12 months out.

pdavi21
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Re: How much do you keep in checking?

Post by pdavi21 » Fri Feb 01, 2019 10:10 am

I transfer before I write checks...so zero. Not sure why my credit union allows me to keep a zero balance so long.

Savings 3-15k to avoid insolvency.
Last edited by pdavi21 on Fri Feb 01, 2019 10:11 am, edited 1 time in total.
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JD2775
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Re: How much do you keep in checking?

Post by JD2775 » Fri Feb 01, 2019 10:11 am

I keep the bare minimum that I can which would cover that current month's expenses with a padding of $200-$300 left over just in case.

Thegame14
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Re: How much do you keep in checking?

Post by Thegame14 » Fri Feb 01, 2019 10:21 am

Too much, we keep about 15-19K in checking to cover bills, it is normally closer to 10K, but I got a year end bonus of like $3K and we let it build up a little, knowing we have a potentially large hospital bill coming in for baby #2 due on Tuesday and wife is on disability so she wont get a check for a while and when she does it will only be 60% of her salary, and then once she goes back to work daycare #2, so we are keeping a larger cushion, plus we have a dog who may need ACL/CCL surgery and the cost is $3-4K, so lots going on, so we feel better liquid then using it to pay down heloc or car loan and then needing to borrow later. if dog doesn't get surgery and hospital bill isn't more than our FSA's we will use it to likely pay down car loan as HELOC is higher rate but we can deduct it, plus car loan lesser amount so we can pay it off sooner, then use that payment as extra towards HELOC.

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munemaker
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Re: How much do you keep in checking?

Post by munemaker » Fri Feb 01, 2019 10:42 am

I am retired and living off of my portfolio. When my checking balance drops below $5,000, I transfer funds from Vanguard Prime MMF to bring it up to $10,000. This seems to be working for me.

My checking account is free with no minimum balance.

jyoung
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Re: How much do you keep in checking?

Post by jyoung » Fri Feb 01, 2019 10:57 am

$5000 - $9000 depending paycheck/bills. However, starting this month I changed my personal "escrows" (prop tax, insurance, vacation, hoa, etc) to weekly instead of monthly. Hopefully this will smooth out my account balance throughout the month and I can keep less of a cushion since it's just sitting there. It's easy enough to transfer from savings if needed, but I have a hard time pulling money out of savings once it's there, even if it's in an account that I earmark for that purpose. :?

H-Town
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Re: How much do you keep in checking?

Post by H-Town » Fri Feb 01, 2019 11:00 am

LivinGood wrote:
Fri Feb 01, 2019 12:31 am
I currently have a ROTH through Vanguard, a high yield savings account at CIT, a savings account at my local bank(.35% interest), and a checking account at the same bank. Wanna ditch the local savings account and spread the funds out between the checking and high yield savings. How much on average do you keep in a checking account? Is having a 8-10K checking balance out of the ordinary? Frowned upon? Just trying to simplify. Thanks.
$100 more or less.

runner3081
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Re: How much do you keep in checking?

Post by runner3081 » Fri Feb 01, 2019 11:10 am

$3,000-$4,000. I usually move it out at the end of the month, though.

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