There’s lots of talk in the world of personal finance about how to best manage a savings account. You might read up on financial experts who recommend keeping three to six months’ worth of living expenses in your savings account, or maybe you’ve seen a tip about socking away enough money to cover larger expenses. Either way, there’s lots of discussion about the ideal amount of money to keep in a savings account. But what about our checking accounts? Most of us use these accounts on a daily basis. Every swipe of a debit card, every bill we pay and every personal check we write takes money out of our checking account. How much money should we be keeping in these super-convenient accounts? Let’s find out.

What’s your magic number?

According to a 2019 NerdWallet survey, the average American checking account balance is approximately $2,900 but this number may not be right for you. Everyone’s financial realities are different, and because of that, we have different answers to the question of how much money we should be keeping in our checking accounts. The general rule of thumb is to try to have one or two months’ of living expenses in it at all times. Some experts recommend adding 30 percent to this number as an extra cushion. To determine your exact living expenses, track your spending over several months, including all bills and discretionary spending. Be sure to include seasonal and occasional expenses as well.

Why keep that much money in your checking account?

Your checking account is your transactional account. This is where you’ll draw the money for all of your spending throughout the month, so you’ll want to be sure you have enough funds to cover those expenses. But it goes deeper than that. Here are three reasons you want to keep your checking account well-padded at all times:

1. Avoiding overdrafts. Even high-income earners can miscalculate their spending and end up with an overdrawn account. Why risk being charged overdraft fees for every transaction when you can easily avoid this mistake?

2. Providing a cushion for pre-authorization holds. Some merchants, including those that operate gas stations, hotels, and car rentals, will place a pre-authorization hold on your debit card until you complete a transaction. Pre-authorizations can reduce your available checking account balance by up to $100 per hold. Once your transaction clears, the hold is released and the funds are available to you again. However, until then, the money is tied up. Keeping your checking account well-funded allows you to comfortably agree to pre-authorization holds without fearing an empty or overdrawn account.

3. Keeping liquid funds available. A robust checking account means access to cash is just an ATM transaction away. While most vendors accept various forms of payment, it’s helpful to know you have cash available if and when you need it.

Can I be keeping too much money in my checking account? While it’s great to keep your checking account well-padded, taking it to the extreme is not recommended. Having an overstuffed checking account means you’re possibly missing out on the higher returns you can earn if you were to keep those same funds in a Money Market Account or in a Savings Certificate. Once you’ve determined exactly how much money you should be keeping in your checking account, look into other options for the rest of your funds. You can speak to an MSRP at to learn about our available options and other high-yield options to find the one that’s right for you.

If you dare

Now that you’ve got your checking account numbers all worked out and you’ve chosen a place to keep the rest of your money, you may want to consider an unconventional practice, which makes money management simpler: opening two separate checking accounts. Some financial experts, such as Kristen Euretig, founder and CEO of Brooklyn Plans, recommend using this approach to give you a separate place for keeping the funds you’ll need for bills and the money you’ll use each month for your discretionary spending. Here’s how it works. Open a second Checking Account, and as soon as your monthly paycheck clears, transfer all the funds you need to pay your monthly bills into your second account. If you have any bills linked to your previous checking account, be sure to update the information before they are due. This way, you’ll be paying all of your bills from one account. Best of all, with two accounts, you’ll be able to tell exactly how much spending money you have left each month without doing mathematical gymnastics to determine how much of your money is still earmarked for bills. It’s budgeting made simple!