In today’s era of effortless investing, the habit of saving money in a traditional bank account is slowly fading. Nevertheless, the saying “cash is king” still holds true. This means that cash remains one of the most valuable assets—especially during times of economic uncertainty or crisis.
But then, the big question is: how much cash should we actually keep in our savings account?

Financial planners generally recommend keeping enough money in your account to cover one month’s worth of essential bills. Storing too much cash, however, comes with risks that could erode your savings—such as fraud, inflation, or transaction errors.

Jessica Goedtel, a certified financial planner based in Pennsylvania, explained that “checking accounts often lack the same protections as credit cards,” meaning that “funds may be harder to recover if your account is compromised,” as quoted by CNBC Make It.

Therefore, it’s wise not to hoard excessive cash in your bank account. Gregory Guenther, a licensed retirement planning counselor from New Jersey, advises that you only keep enough money to cover one to two weeks of expenses.

“If you keep too little, you’ll constantly worry about every transaction. But if you keep too much, you’ll miss out on potential growth from higher-yield accounts. The ideal balance is personal—it should allow you to live comfortably without checking your balance before buying groceries,” Gregory emphasized.

While maintaining a healthy cash balance can protect you from annoying bank fees, this money should not be treated as a substitute for an emergency fund.

An emergency fund is meant to cover large, unexpected expenses—such as medical bills or job loss.

Financial experts typically recommend setting aside three to six months’ worth of living expenses in a separate, easily accessible account, such as a high-yield savings account. This ensures that your money is available whenever you need it—without unnecessary risk or loss of value.