Average checking account balance

Quick insights

Used for everyday necessities, like paying your electric bill, to memorable milestones, such as purchasing an anniversary gift, your checking account may be an important hub of your financial life.

To avoid overdraft fees, it can be helpful to have a checking account balance that covers your daily needs. However, holding too much in checking may have drawbacks, too, such as slowing down saving for long-term goals.

Using your checking and savings accounts in tandem usually yields better results than storing all of your money in checking. If you’re unsure how much money to keep in each account, it may be helpful to learn more about the factors that can impact the average checking account balance.

Average checking account balance in the U.S.

A checking account is a type of transaction account. It allows you to withdraw and deposit funds frequently. According to data available from the Federal Reserve, the average value of transaction accounts in the United States is $62,500.

If this number seems high (or low) to you, don’t worry. It may not be the most accurate measure of the typical checking account balance. The median value reflected by the data, which is about $8,000, may offer a more accurate picture of the average American checking account balance.

Understanding checking account balances

The concept of a "normal" checking account balance can be quite relative, as it often depends on individual factors such as income, age and career. While there are patterns that can be observed within these categories, it can be important to remember that each person's financial situation is unique.

Reflecting on these patterns may provide insights into whether your balance aligns with your personal spending and growth goals.

Income levels

Whether from a career, government benefits or pension, your income can be a major factor in your checking account balance. Generally, the more income you have, the more money you’re likely to have in your checking account.

As your earnings grow, your monthly living costs may increase as well. Since it can be helpful to keep one to two months’ worth of expenses in your checking account, a higher income may require a large balance to comfortably cover routine needs.

Age

By making responsible financial decisions, you may find yourself with a higher checking account balance as you age. Many people tend to achieve career milestones that increase their income as they age. This can result in an increase in financial assets, as well.

Americans under 35 usually have a median balance ranging around $5,400 and an average balance of $20,540. By comparison, baby boomers and retirees are more likely to have a higher balance. Those between the ages of 65 and 74 tend to have an average checking account balance of $24,409.

Median vs. mean balances

Mean is what you might think of as an “average.” It can be calculated by adding up all the numbers in a group, then dividing the sum by how many numbers are in the group. If some of the numbers in the group are very high or very low, the results may be skewed.

To find the median, numbers are lined up in a group from smallest to biggest. The median is the number exactly in the middle.

Because income distribution can vary significantly, the median may serve as a more realistic indicator of a typical checking account balance for many individuals.

What to do with a low checking account balance

If your checking account balance is relatively low, it might be beneficial to consider increasing it to cover one to two months' worth of expenses.

One small way to work towards this is to look for a checking account that costs less to maintain. Consider switching to an account that requires a lower monthly minimum balance and charges low or no overdraft fees and account maintenance fees.

What to do with a high checking account balance

If your checking account balance is high, there may be opportunities to optimize the use of your funds. This is because checking accounts usually offer very low interest—if they offer it at all.

You may want to reassess how much money you’re putting toward goals such as saving for retirement or paying off credit card debt. It could be helpful to ask yourself whether you could save more.

If saving more is an option, you may want to look into moving the extra funds to a high-yield savings account or another higher annual percentage yield (APY) account, which could help you grow your money faster.

Recommended savings and emergency fund guidelines

While maintaining a healthy baseline of funds in your checking account can be important, it can still be beneficial to have a separate emergency fund. To avoid accidentally spending emergency savings on routine expenses, it may be a good idea to keep your emergency fund in a savings account instead.

How much should you save in an emergency fund? That depends on your usual monthly expenses. It can also be helpful to consider the size of any surprise expenses you encountered in the last year.

The ideal emergency fund size can vary. Some people may find three to six months of living expenses is reasonable. If you’re self-employed or your income varies from month to month, aiming for a year’s worth of living expenses may be better.

In summary

The ideal checking account balance isn’t the same for everyone. Aiming to keep about two months’ worth of expenses—whatever that number looks like—in your checking account is usually better than striving for the “average” checking account balance.

By focusing on a number that aligns with your unique expenses and goals, it may be possible to achieve a checking account balance that supports daily needs while also allowing for future financial growth.