Here’s Why Your Checking Account Should Have as Little Money as Possible

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If you’re used to keeping a big balance in your checking account, you might think you’re playing it safe. But keeping too much money in a checking account is actually costing you. Unlike savings accounts or investments, your checking account earns little to no interest, meaning your extra cash is just sitting there losing value.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Here’s why you should keep as little money as possible in your checking account — and where to move the rest to make your money work for you.1. Checking accounts earn almost no interestAccording to the FDIC, the average checking account APY is just 0.07%. That means even if you have $10,000 sitting in your account, you’re earning just $7 per year in interest. Meanwhile, inflation is eating away at your purchasing power, making your money worth less over time.Instead, move extra cash to a high-yield savings account (HYSA), where you can earn 4.00% APY or more. That same $10,000 would earn $400 a year instead of just $7.Some of these accounts earn more than 50x that of a typical checking account. Explore our list of the best high-yield savings accounts now.2. You’re more likely to overspendHaving a large balance in your checking account can make you feel like you have more money to spend — even if that cash is meant for saving. When money is easily accessible, it’s tempting to splurge on unnecessary expenses rather than let it grow.Keep only what you need for monthly expenses in your checking account and transfer the rest to a separate savings or investment account. Out of sight, out of mind.3. You’re missing out on the stock marketHistorically, the stock market has returned an average of 10% annually, as measured by the S&P 500. There will be short-term losses, but long-term the S&P 500 Index has gone up 38 of the past 50 years.Instead of keeping money you don’t immediately need in your checking account, open an IRA and start investing for retirement. Buying an S&P 500 index fund automatically diversifies your money among 500 of the biggest and most successful companies in the U.S.4. It doesn’t protect you from fraudIf someone gains access to your checking account through fraud or theft, a large balance could be at risk. While banks typically offer fraud protection, recovering stolen money can take time, leaving you stressed and potentially short on funds.By keeping only what you need in checking, you limit your exposure to fraud and protect your money in accounts that are harder to access.You have better optionsYour checking account should be a spending tool, not a savings account. By keeping just enough for bills and short-term expenses — and moving the rest into higher-yield accounts — you’ll grow your money faster and avoid the temptation to overspend.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

If you’re used to keeping a big balance in your checking account, you might think you’re playing it safe. But keeping too much money in a checking account is actually costing you. Unlike savings accounts or investments, your checking account earns little to no interest, meaning your extra cash is just sitting there losing value.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Here’s why you should keep as little money as possible in your checking account — and where to move the rest to make your money work for you.

1. Checking accounts earn almost no interest

According to the FDIC, the average checking account APY is just 0.07%. That means even if you have $10,000 sitting in your account, you’re earning just $7 per year in interest. Meanwhile, inflation is eating away at your purchasing power, making your money worth less over time.

Instead, move extra cash to a high-yield savings account (HYSA), where you can earn 4.00% APY or more. That same $10,000 would earn $400 a year instead of just $7.

Some of these accounts earn more than 50x that of a typical checking account. Explore our list of the best high-yield savings accounts now.

2. You’re more likely to overspend

Having a large balance in your checking account can make you feel like you have more money to spend — even if that cash is meant for saving. When money is easily accessible, it’s tempting to splurge on unnecessary expenses rather than let it grow.

Keep only what you need for monthly expenses in your checking account and transfer the rest to a separate savings or investment account. Out of sight, out of mind.

3. You’re missing out on the stock market

Historically, the stock market has returned an average of 10% annually, as measured by the S&P 500. There will be short-term losses, but long-term the S&P 500 Index has gone up 38 of the past 50 years.

Instead of keeping money you don’t immediately need in your checking account, open an IRA and start investing for retirement. Buying an S&P 500 index fund automatically diversifies your money among 500 of the biggest and most successful companies in the U.S.

4. It doesn’t protect you from fraud

If someone gains access to your checking account through fraud or theft, a large balance could be at risk. While banks typically offer fraud protection, recovering stolen money can take time, leaving you stressed and potentially short on funds.

By keeping only what you need in checking, you limit your exposure to fraud and protect your money in accounts that are harder to access.

You have better options

Your checking account should be a spending tool, not a savings account. By keeping just enough for bills and short-term expenses — and moving the rest into higher-yield accounts — you’ll grow your money faster and avoid the temptation to overspend.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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