 TITLE: How Much Money Should You Keep in Checking and Savings? CONTENT: How Much Cash Should You Keep in Your Savings Account?\n------------------------------------------------------\nIn addition to keeping an adequate balance in your checking account, it's a good idea to have a separate savings account. Why?\n*   Ideally, you want an additional three to six months' worth of expenses set aside as an emergency fund.\n*   You may also want to use separate savings to accumulate money for big-ticket items such as a down payment on a home, a vacation or a new car.\n*   You're less likely to \"accidentally\" spend money if it isn't lying around in your checking account.\n*   You can earn interest on your savings.\n*   If your checking account is hacked, you'll have a ready source of funds while the bank sorts out your claim.\nAccumulating three to six months' worth of expenses—plus any savings you may be piling up for discretionary spending—can take a bit of discipline. Setting aside a dedicated percentage of each paycheck is one way to create a savings routine. Many financial institutions also have automatic savings services that will sweep money from your checking to savings on a regular basis. Also key: Don't raid your savings account to cover everyday expenses. When you do use savings to pay for emergencies, build it back up as soon as you're able.\nAlthough savings accounts may not seem like the most exciting financial products to shop for, there are differences between accounts you may want to consider. In June 2021, starting interest rates on regular savings accounts hovered around 0.01%. At this rate, a $10,000 account would earn $1 in interest per year. A typical high-yield savings account, on the other hand, might offer around 0.5% interest—earning about $50 in interest on the same $10,000 account.\nMany regular savings accounts also charge maintenance fees, ranging from $5 to $12 monthly. Sometimes, these fees can be waived by maintaining a minimum balance or linking multiple accounts. But paying $60 to $144 a year in fees can easily cancel out—and even reverse—the progress you make with interest.\nWhen you're ready to start saving, shop around for a bank account. Some of the best rates and terms on high-yield savings accounts are with online banks like Marcus or Vio Bank, but many banks and credit unions also have high-yield accounts. Look for accounts that enable you to bypass monthly fees as well. END