September 2, 2019

Average Bank Account Balance

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The average American has just $4,500 in their bank accounts. Is this enough? Keep reading for detailed breakdowns and learn how much you should keep in your bank accounts.

Average Bank Account Balance in the US

The average bank account balance for Americans is $40,200, while the median account balance is $4,500, according to the Federal Reserve.

The average figure of $40,200 may seem very high, as the average is skewed by a small number of high-net-worth individuals with a lot of savings.

For a more realistic figure of where the average American stands, look at the median number instead. This number represents the midpoint value, where half of the people have below that number and half of the people have above.

The average and median balances are determined from these types of bank accounts:

  • Checking
  • Savings
  • Money Market accounts
  • Prepaid debit cards

Certificate of Deposits (CDs) are not included, as this type of savings is not liquid.

Average Account Balance by Age

Here's a breakdown of account balances by age. If you want an idea of where you stand, it's best to compare to others in your age group.

Average Balances by Age

AgeAverage BalanceMedian Balance
Under 35$9,600$2,600
35-44$25,000$3,800
45-54$41,000$4,100
55-64$57,300$5,400
65-74$68,500$8,000
Over 75$51,700$10,000

The data proves that the older you get, the more you leave in your bank account balances. Younger people under 35 are still establishing their careers and things like student loan debt make it hard to have extra funds.

As you get older, your savings increase. Having a cushion in your bank accounts make it easier to handle emergencies and larger purchases.

Average Bank Account Balance by Family

Here's how bank account balances break down by family type:

Family TypeAverage BalanceMedian Balance
Single adults with children$11,700$1,200
Single adults under 55, no children$13,300$2,400
Single adults over 55, no children$34,400$3,000
Couples with children$42,800$5,700
Couples without children$66,600$9,000

It's not surprising that single parents struggle the most with having enough in the bank. The median number indicates that half have less than $1,200 in their accounts.

Couples fare much better because of the dual income. Couples with children have almost 5 times more than single parents in their accounts (based on the median number). Couples with children enjoy the most discretionary income, and therefore have the biggest bank balances.

Education Level

A person's level of education can have an impact on their income and ability to save. The Federal Reserve surveyed Americans with varying education statuses to calculate the numbers.

Education LevelAverage BalanceMedian Balance
No high school diploma$7,600$900
High school diploma$16,700$2,100
Some college$18,900$3,500
Associate degree or higher$86,100$15,000

Those who did not finish high school have the least in their bank accounts, with half having less than $900. The median income for this group is $30,056/year (or $578.00/week), which makes it hard to save.

Those with college bachelor degrees earn the most, with a median income of $70,200/year (or $1,350.00/week). Their bank account balances also see a huge jump.

Balances by Occupation

Americans in certain professions may have an easier time saving money due to their higher income.

OccupationAverage BalanceMedian Balance
Managerial$72,700$11,000
Blue-collar workers$20,700$3,000
Retirees$39,900$4,300

Americans who work in a managerial or professional position have the highest incomes, and therefore the highest bank account balances. Blue-collar workers in sales, technical, or services industries have significantly less average bank account balances.

How Much Should I Have In My Bank Account

After reviewing the data above, you're probably now wondering...

What does this mean to me? What is the right amount of money to keep in a bank account?

How much to keep in checking:
In general, for a checking account, we recommend that you only keep what is needed for 1 month's worth of expenses plus some cushion. This means keep what is needed for your rent/mortgage, utilities, other payments like car loans, everyday spending, and credit card payments. Add in about 25-50% more as a cushion to prevent overdrafts and any unusual larger purchases.

For example, if your total monthly expenses add up to $4,000, you may want to keep an average of $5,000 - $6,000 in your checking account. Of course, as you pay bills and spend, your checking balance will go down, but it'll be replenished as you receive paychecks.

Many checking accounts have a minimum balance requirement, or else there's a monthly service fee. This means there's a portion of funds you essentially can't touch. If your current checking has a high minimum balance requirement, consider switching to a free checking account.

How much to keep in savings:
If you have additional cash, they should go into a savings account where you can earn more interest. Dedicated savings accounts will also ensure you don't accidentally spend the money.

We recommend having enough in your savings account to cover 3 - 6 months of expenses. This way, you'll be covered if the worst happens and you lose your job. You'll have enough to stay afloat for a while. It's also important to have these savings for big emergencies, like if your roof collapses or your car breaks down.

Related: best high-yield savings accounts to grow your money.

For any more additional funds beyond this, it's best to invest them to earn more returns.

Frequently Asked Questions

How much should I save each month?
The basic rule of thumb is to save 20% of your take-home income each month. This is called the 50/30/20 Rule.

This means your budget should look like this:

  • Use 50% for living necessities
  • Spend 30% on fun stuff
  • Save 20% of paychecks

The 20% savings is be split up between emergency funds, retirement savings, and other goals.

How much money should I save before buying a house?
Try to save at least 20% of the purchase price for a down payment, plus 5% of the loan amount available for closing costs, real estate taxes, and homeowner's insurance.

To know how much you'll need, you'll first need to know how much home you can afford. An estimate is to spend no more than 28% of your monthly income on housing payments.

Saving an extra 3% of the home's value can help pay for annual maintenance and repair costs.

How much money should I save for retirement?
As a general rule, you should have 8-10 times your salary saved by the time you hit 65 years old. The younger you start saving for retirement, the closer you'll be to this benchmark.

For example, at age 30, you should have the amount of your annual salary saved for retirement. By the time you hit 50 years old, the amount saved should be 5-6 times your annual salary.

Nearly 50% of Americans have nothing saved for retirement. The average retirement savings at age 60 is just $172,000, which is not enough for retirement.

Are my savings insured?
The FDIC insures deposit accounts up to $250,000, per depositor, per financial institution. Joint accounts are insured up to $500,000.

If you have additional savings, consider opening accounts at other banks to get more coverage.

Bottom Line

Create a savings plan as early as possible to give yourself the best chance of achieving your financial goals. You can start by setting aside a percentage of your income to build up your balance.

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