Is $1,000 Too Little to Keep in Your Checking Account?

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It’s important to have sufficient funds in your checking account. Read on to see if $1,000 gets the job done. [[{“value”:”

Your checking account is a convenient place to keep your money. You can use that account to pay bills or take withdrawals from ATMs when you need actual cash.

But it’s important to know how much money to have in your checking account. You don’t want to keep too much money in there, but you also want to make sure you have enough.

So how does a $1,000 checking account balance stack up? The answer is, it depends.

It’s a matter of your personal expenses

It’s common for checking accounts to impose a minimum balance requirement. If you don’t meet it, you could be charged a fee.

Usually, $1,000 is above that requirement, but it all depends on your bank. And you may even be able to find a checking account with no minimum balance requirement if you shop around. Check out this list of the best checking accounts as a good starting point.

Meanwhile, as a general rule, it’s smart to keep enough money in your checking account to cover at least a full month of bills. And you may even want to aim for two months’ worth.

You never know when your payroll department at work might hit a glitch, delaying your paycheck from hitting your account on time. Or, your bank might experience technical issues that stop you from being able to transfer money from your savings account to your checking account on the spot as you normally can. So it’s not a bad idea to keep a little extra cash in your checking account.

Of course, you don’t want to go overboard on funding your checking account either, since you may not be earning any interest on that money. Or if you are earning interest, it’s likely a pretty minimal amount.

But you also don’t want to risk a situation where your checking account has insufficient funds. If that happens, you may be forced to pay bills late, resulting in late fees and credit score damage. Or, you might overdraw your account and get penalized financially for that reason.

So with all of that in mind, if $1,000 is enough money to cover a month of bills or more for you, then it’s not too small an amount to keep in your checking account. But if your monthly expenses typically come to $3,000, then a $1,000 balance puts you in a not-so-great spot.

It’s all about striking a balance

Keeping too little money in your checking account could have negative consequences. So if your monthly expenses are more than $1,000, aim for a balance of whatever amount they usually come to, whether that’s $2,500, $3,500, or more.

That said, don’t worry if you decide to only keep a month’s worth of bills in your checking account, especially if you have it linked to a savings account that has money. Most of the time, you can pretty seamlessly transfer money. And if there is a glitch that prevents you from transferring funds from your savings to your checking account electronically, going to your bank to do so in person may solve that problem.

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