How Much Should You Keep in Checking and Savings?
Checking and savings accounts are important tools in your financial life. You certainly shouldn’t be storing money under a mattress, in a freezer or buried in the backyard. But just how much money should you keep in your checking and savings accounts?:
Checking accounts aren’t known for carrying high-interest rates. Even banks offering high-interest checking accounts often provided tiered-interest rate structures with lots of hoops to jump through to realize the full value. So your goal with a checking account should never be to accrue interest, it’s just a better place to store your money than under a mattress.
Your goal with a checking account should keep enough to pay the month’s bills, have a little extra to access when you need cash and a buffer to avoid potential overdrafts. Everything else should be kept safely in savings because your checking account can quickly become a financial weak spot.
Crooks use skimmers on ATMs, at gas stations and stores like Target to steal information off debit cards and hack your account. The rise of massive data breaches in the last few years should make you wary of using debit cards in general. But if you’re committed to always swiping a debit card instead of a credit card, you should keep the minimal acceptable amount for your spending habits in a checking account.
A hacker can make withdrawals from an account as soon as he gets access to your information.
It’s best to minimize potential damage by keeping the majority of your liquid assets in savings and staying on the defensive with protecting your money.
Strategies to Protect Your Money in Checking
Here are 5 simple steps to minimize the risk of your checking account being hacked:
- 1. Use your credit card for a majority of purchases. Credit cards come with better fraud protection and don’t give a thief direct access to your money.
- 2. Only use ATMs inside a bank.
- 3. Cover your hand when punching in a pin associated with your debit card. Hackers will often put cameras in compromised ATMs to get your pin information.
- 4. Set up text alerts for your account balances and transactions.
- 5. Understand your bank’s liability policy associated with an account, and contact them immediately if you suspect fraud or theft.
For more tips on protecting you finances, managing mortgages and other loans, or other financial management strategies, visit Madison Monroe and Associates online today!