The amount of money you should leave in a checking account depends on your personal financial situation and your specific needs. While it's generally not advisable to keep a large sum of money in a checking account for an extended period, there are a few factors to consider:
Emergency Fund: It is recommended to have an emergency fund that covers 3-6 months of living expenses. This fund should be easily accessible in case of unexpected expenses or income disruption. A portion of this emergency fund can be kept in a checking account for quick access.
Daily Expenses: Your checking account should have enough funds to cover your regular monthly expenses, such as bills, rent or mortgage payments, groceries, and other essential expenses. This amount may vary depending on your lifestyle and obligations.
Savings and Investments: It's generally more beneficial to keep excess funds in savings accounts or invest them to earn interest or potentially higher returns. Savings accounts or other low-risk options can provide better interest rates than checking accounts. Consider transferring surplus money from your checking account to savings or investment vehicles.
Overdraft Protection: If you frequently rely on overdraft protection, it may be wise to keep a buffer in your checking account to avoid overdraft fees. However, it's generally better to avoid relying heavily on overdraft protection and instead manage your finances responsibly.
Ultimately, it's a good practice to evaluate your financial goals and consult with a financial advisor who can provide personalized advice based on your specific circumstances.