How Much Cash can you Keep in a Bank? The truth of the matter is that there is no amount that is too much that you can keep at any bank ever it depends on your financial situation.
Your bank account can make your financial life easier by having to set recurring payments and making everyday payments by opening a current account. Or by simply helping you save money when you open a savings account but exactly how much cash can you keep in a bank?
This is the question that we are going to be having access to in this article today. Because most of the time many people will ask me this question if it is even possible to keep too much cash in the bank. Today we are going see the real answer on how much cash you can keep in a bank and live your life financially successfully.
How Much Cash can you Keep in a Bank?
Just as I have mentioned in the introduction of this article the amount of cash you can kill any bank depends on your financial life and also depends on your budget. All your income should not be going to your bank account because there are certain things you need to remove from it which is where a budget comes in. So it is very important to budget if it’s not 1:30 start making one today.
It is as a result of a budget that you will know how much you can keep in a bank account depending on your financial life or income. Now that being said below are some of the thoughts being popular developed by popular financial experts on how to determine how much cash we can keep in a bank.
The 50/30/20 Rule – How Much Cash can you Keep in a Bank?
The best and easiest way to determine how much cash you can keep in a bank is by following The 50/30/20 Rule. Which essentially means dividing your monthly income into different parts just as I have listed above. All your fixed costs such as monthly bills electricity bills and others are considered to take 50% of your income.
The next 30% eat for your lunch which comprises things that you do not basically need but you want such as eating out in a restaurant and orders. Finally, the last 20% is money that you should direct to savings which is the maximum amount of money you can keep in your bank account. However, in the case of debt, you can simply direct this 20% to pay it off before putting the others in your account.
How Much Should I Keep in Checking?
It is very important to note that banks and credit unions can impose a minimum limit on the amount that you will keep in your account. Boss to know the right amount of money you can keep in your checking account the answer depends on other things for example your budget. As I have mentioned above the amount of money you can save depends on the budget Inn make.
If you are following what I have listed above then the last 20% can go to your checking account so that it can be used for making payments online paying bills and others. Another reason is to keep money in your checking account to maintain the minimum balance to avoid payment in account maintenance.
How Much Should I Keep in Savings?
The amount of money you can also keep in your savings account depends on your financial goals. You might be saving up money to buy a home which is a long-term goal or simply save enough money to go on a vacation. This is why it is basically depends on you the amount of money you want to save in your savings account and the pills you want to make use of it for.
So many people simply save money in their savings account to have an emergency fund. What I am trying to tell you here is that it totally depends on the reason of opening a savings account. That is what determines the amount you can keep in a savings account. If you are saving money there as an emergency fund the money will be much and vice versa.
How Much Emergency Fund Should I Have?
Just as the name States and the emergency phone is designed to hold money that is kept for the purpose of emergencies such as unexpected expenses. It is very important for people to have emergency funds because it will save them from going to borrow and taking loans. But the question is exactly how much should I have as an emergency fund in case of an unexpected expenses.
For this there is a general rule of thumb that can be used to determine exactly how much you need to keep in your emergency fund. Which is to keep at least three to six months’ worth of expenses in the emergency fund. This is a long-standing rule of thumb that has been used by many people that have worked very well for them.
FAQs
Should I keep all my money in one bank?
It is very convenient in keeping all your money in one bank because you did not have to stress yourself about opening accounts in various banks to check your money. However, the only thing you need to consider is if you are getting the best rate at the bank. You should switch from keeping all your money in a particular bank if you are getting high rates and fees.
How much is too much cash in savings?
If you will have an amount exceeding the FDIC limit of 250,000 dollars in your savings account that is considered too much cash in savings. This is because the Federal government does not pay you more than 250,000 dollars insurance fees if anything happens to your account. So having a larger number than that means that you are going to be at a loss if anything happens to the account.
