Not keeping enough money in your checking account and savings account can attract overdraft charges and maintenance fees. You may already have these accounts with banks like columbia bank marlboro. Allocating the funds well between the two banks can help you handle your account balances well.
Read ahead to know how much cash you should keep in both these accounts.
How much money should you keep in your checking account
If you use just one checking account, you may already be using it to pay your bills and spend. Some people use two checking accounts for each of these purposes. Pick an amount that you want to maintain in your account.
This can include an amount that is unrelated to your expenses, say $4,000. It is a good idea to keep at least two months of living expenses in this account at any given time. If you can afford it, go ahead and keep an additional 25% to 30% above the checking account’s living expenses.
In this way, you can avoid overdrawing your checking account and will not have to incur any extra fees.
|133 Route 9 South, Marlboro|
|NJ 07726, United States|
|Phone: +1 732-972-1777|
How much money should you keep in your savings account
The main purpose of your savings account is to act as an emergency fund. You can go ahead and save at least three to six months of living expenses in this account. The savings account will also pay a small interest on the money deposited. Hence, your money won’t sit idle in this account.
After this, you can add any savings for other goals you have. Do note that a savings account will have a minimum withdrawal limit. It is best not to use this account for frequent expenses.
By allocating your money between a checking account and a savings account, you will be able to use your funds in the best way. This leads to organized finances and better saving in the long-run.