How much money should you have in your savings account? It’s a trickier question than you might think.
Too little and you’re liable to incur debt; too much and you’ll miss out on long-term capital gains from the stock market.
“It’s not an easy formula that we can choose one time and we’re good forever,” said Catherine Valega, certified financial planner and founder of Green Bee Advisory.
The key is to know your obligations and goals, and adjust as they change over time, although a useful rule-of-thumb is to have two months of income saved.
If you want to get a sense of where you stand, consider this: American households have, on average, more than $12,000 in a savings account, according to a USA TODAY Blueprint look at an analysis of Federal Reserve data done by the University of California at Berkeley.
Average savings account balance
- On average Americans have $12,201.50 in a savings account.
- 98.6% of Americans have some type of transaction account, such as a checking or savings account.
- Households helmed by men have much higher average savings account balances ($14,519) than those helmed by women ($6,162).
- Households containing members with a college degree have a higher savings account balance than those without.
- You should aim to have roughly two months of income in one of the best high-yield savings accounts.
On average, households in which a man owns or rents the home have much more in savings ($14,519.47) than those helmed by women ($6,161.51).
There are a lot of factors that go into how much someone has in savings, such as how much they earn, whether they are single or supporting a family and how long they’ve been working.
Research shows time and time again that women, on average, earn less than men — and that fact likely plays a part in the breakdown of savings accounts by gender.
The average savings account amount also varies greatly by race and ethnicity.
While white savers have more than $14,000 in their accounts on average, Black savers average around $3,800 and Hispanic savers have roughly $4,700. Asian savers have around $40,600 on average in their savings accounts.
Much of this difference likely comes down to income disparities.
The median weekly earnings of full-time white workers was $1,157 in the first quarter of 2024 and $1,505 for Asian workers, according to data from the Bureau of Labor Statistics (BLS), compared to $908 for Black workers and $879 for Hispanic workers.
Those in the top 10% of income distribution have an average checking account of around $56,000 — a stark difference from the $17,600 in just one rung lower in income distribution ladder. People in the bottom 20% of income distribution have just over $2,000 in their savings accounts on average.
Your income is a major factor to consider when determining how much to keep in your emergency fund, as is the security of that income.
A household with two incomes, no children and job security don’t need to keep as much liquid cash in a savings account as a family with one breadwinner and three children, said certified financial planner, Pamela Capalad.
More schooling corresponds to a higher savings account balance, per Federal Reserve data. While savers with no high school diploma, only a high school diploma or some college education have below $10,000 in their savings account on average, that figure jumps to more than $24,000 for savers with a college degree.
The massive difference likely comes down to how income varies by education level. The median weekly earnings of full-time workers age 25 and older without a high school diploma was $718 in the first quarter of 2024 compared to $901 for high school graduates without a college education and $1,680 for those with at least a bachelor’s degree, according to BLS data.
How many Americans have a savings account?
Here’s some good news: Very few Americans are unbanked.
Federal Reserve data shows that nearly all (98.6%) of American households own some type of transaction account, such as a money market, savings or checking account.
That stands in stark contrast to the popularity of certificates of deposit (CDs). Today less than 7% of families have a CD, per the Fed, compared to roughly a fifth of households in 1989. While CD yields were low for much of the past decade, they rose in recent years thanks to the Federal Reserve’s effort to snuff out sky-high inflation.
The best CD rates today pay more than 5%, which was almost unthinkable in the aftermath of the Great Recession.
How much should I have in savings?
How much you should have in savings depends on your particular needs, but it can be helpful to start with a rule of thumb.
One popular guideline is that you should have enough money easily available to cover between three and six months of expenses should you face an emergency, like a job loss or a surprise medical bill. Some advisors, like Valenga, recommend upping that figure to up to 12 months of expenses, especially if you are the sole breadwinner.
Another option, that’s a bit simpler to calculate quickly, is keep two months of income on hand.
Quick tip. The goal of an emergency fund is to avoid going into debt if you lose your job or experience a big expense.
The exact amount you should have in savings really comes down to your personal financial situation and lifestyle.
“Will it keep you up at night to have less than a certain amount?” Capalad asked. “How much liquidity feels good for you in terms of what you might want your life to look like in the next couple of years?”
Consider opting for a risk tolerance assessment to assess your appetite.
Tips on how to grow your savings account
It’s easy to say you want to grow your savings, but what steps can you take to actually save money?
Capalad recommended breaking up your savings into milestones.
If you’re just starting out, come up with a savings floor, between $500 and $1,000, and work on maintaining that level of savings in your account. If the balance dips below that number, get it back up.
Quick tip. Breaking up big goals into achievable tasks can give you positive momentum to succeed.
From there, you can add savings goals to your plan. Maybe the goal is to save $1,000 on top of your savings floor and when you hit that, start trying to save a certain amount of money per month regularly.
“Savings is an action, not an amount,” Capalad said. “It doesn’t matter how much you’re saving, it matters that you are saving because that amount will accumulate over time.”
Automating your savings can be a big help as well, according to Valenga.
Some payrolls will allow you to split your direct deposit into more than one account, so you can automatically set it to direct a certain amount of each paycheck to your savings account. Many banks also have automatic transfer tools in which you choose a certain amount of money to be automatically sent from your checking to your savings account at regular intervals.
Looking for a high-yield checking account? Pick one of the best ones on the market
“For a lot of people, money hits their account and since it’s in there, they think they can spend it,” Valenga said. “We want to get it out of there before they get tempted to go out to a fancy dinner or go on Amazon and buy something.”
Saving can also be fun.
One example of that is the popular “no-spend January” trend in which people only buy essentials during the first month of the year. Other ways to gamify the process is to push yourself to save a certain amount in a month, such as with an envelope challenge.
How to find the best savings account
The best high-yield savings accounts are currently offering between 4% and 5% annual percentage yields (APY), much higher than in years past.
The Capital One 360 Performance Savings, Quontic Bank High Yield Savings and Synchrony Bank High Yield Savings are just a few of the high-yield savings accounts USA Today recommends.
“I would recommend that — unless you have a reason not to — to use an online high-yield savings account since they’re just paying such great interest rates right now,” Capalad said.
While savings rates are an important factor in determining the best savings account for you, it’s not the only thing to consider.
Take into account customer service, minimum balance requirements and fees, among other considerations.
A bank may offer a great savings rate, but if you need ATM access and no in-network ATMs are near you, that bank likely doesn’t make sense for you.
