Your bank is the place to keep cash that you plan to spend soon. It’s also a smart choice for emergency savings since the funds are easy to access when you need them. It's important to be strategic, though, when it comes to how much money you keep in the bank.
When you keep a large balance in cash, you lose the chance to invest it and grow your wealth. There is also the risk of losing cash due to identity theft or other reasons. While comparisons sometimes promote unhealthy behavior, knowing what other people do with their money may be helpful—especially if you drill down into the details.
What Is the Average Bank Account Balance?
The Federal Reserve gathers information about income, debt, assets, and other financial details every three years in the Survey of Consumer Finances (SCF). The most recent SCF, from 2019, measures holdings in checking accounts, savings accounts, money market accounts, and prepaid debit cards.
The median bank account balance for U.S. households is $5,300, and the average bank account balance is $40,000. In the 2019 study, roughly 98% of households had balances to report, compared to 93% in the 2013 survey. That increase is primarily due to including prepaid debit cards as a “transaction account” along with traditional checking and savings accounts.
As you can see, the average is significantly higher than the median in these results. That’s because households with extremely high account balances bring the average higher, but the median is probably more meaningful for most of the U.S. population.
- The median is the middle of all survey responses after lining up every response in order from largest to smallest.
- The average is a calculation that also includes every response, but a small percentage of the population with significant savings can skew the data.
Average Bank Account Balance and Income
Not surprisingly, your household income influences the amount of money you keep in the bank. Higher-income households tend to have more in checking and savings. The 2019 SCF shows that of those in the bottom 20th percentile, only 36.5% of households saved money. But in the top 20th percentile, over 85% of families saved.
Here’s a breakdown of the median bank account balance in several income categories:
- Bottom 20th percentile, with an average income of $14,400: $800
- Next 20th percentile, with an average income of $31,800: $2,100
- Next 20th percentile, with an average income of $53,400: $4,300
- Next 20th percentile, with an average income of $87,400: $10,000
- Next 10th percentile, with an average income of $138,700: $20,000
- Top 10th percentile, with an average income of $514,700: $70,000
Again, the average bank account balance for each group is higher due to a small portion of households with significant savings. For example, in the bottom 20th percentile, the average account balance is $4,700, and the top 10th percentile of households keeps over $228,000 in the bank.
Occupation and Bank Account Holdings
Your job directly influences your income, so it makes sense the type of role you fill affects your bank account. The SCF shows the median bank account balances for the following types of workers:
- Managerial or professional: $13,000, with an average of $71,700
- Technical, sales, or service: $3,200, with an average of $20,600
- Other occupations: $3,200, with an average of $11,000
- Retired or not working: $3,700, with an average of $39,800
Bank Account Balances by Race
There are also significant differences in bank account holdings by members of various races. The SCF reveals the median account balances using the categories below:
- White non-Hispanic: $8,200, with an average of $51,400
- Black or African-American non-Hispanic: $1,500, with an average of $8,600
- Hispanic or Latino: $2,000, with an average of $16,700
- Other or Multiple Race: $5,000, with an average of $33,900
Family Structure Affects Your Finances
Those with children may wonder how others fare, and childless couples may not appreciate the benefits of dual-income-no-kids (DINK) status. Families of various types have the following median transaction account holdings:
- Single with child(ren): $1,300, with an average of $15,900
- Single, no child, under age 55: $3,000, with an average of $13,100
- Single, no child, over age 55: $3,200, with an average of $27,500
- Couple with child(ren): $7,500, with an average of $48,500
- Couple, no child: $11,000, with an average of $68,200
Education and Higher Account Balances
More education seems to run in tandem with higher bank account balances. College degrees and advanced courses of study can certainly increase your income. But it’s important to acknowledge the problems that come with excessive student debt, and the role that socioeconomic advantages play in education and personal finance in general.
The SCF shows increasing median account balances as education increases (using the head of household’s education level).
- No high school diploma: $1,000, with an average of $9,200
- High school diploma: $2,500, with an average of $20,100
- Some college: $3,900, with an average of $23,500
- College degree: $15,400, with an average of $78,900
Types of Account Balances Included in the Survey
The SCF includes the following types of accounts in the category of “transaction accounts”:
- Checking accounts, typically used for everyday spending and direct deposit
- Savings accounts, which tend to pay interest on savings, but are slightly less liquid than checking accounts
- Money market accounts that pay interest and may include payment cards or a checkbook
- Prepaid debit cards, which can work as a substitute for a bank account
Note that the list does not include certificates of deposit (CDs). The average household has $75,600 in CDs (with a median of $25,000) and similar demographic factors affect those account balances.
The addition of prepaid cards after the 2013 survey is a significant change, adding one in 20 households to the list of survey respondents that has money in savings. Those households might be considered “underbanked,” and they either choose not to have a bank account or they are not able to open one. While prepaid cards provide valuable financial services, it’s still helpful to have access to local bank and credit union services.