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How much money should I keep in my savings account?

Find the optimal amount to keep in your savings account to reduce fees and grow your wealth.

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What's the right amount of money to keep in your savings account? Many people simply brush off this question with "the more the better", but is that really the case? This guide helps you consider the optimal amount of savings you should have in order to reduce banking fees while growing your savings and maintaining an emergency fund.

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How much to keep in your savings account

There are a slew of factors to consider before deciding how much to keep in your savings account. Here are a couple of popular considerations for you to think about.

Account-related fees

Having a savings account should help you grow your wealth while paying fewer fees. Before choosing a savings account, understand the types of fees you may end up paying. In many cases, fees are dependent on how much money you have in your account. For example, minimum balance fees apply when your account falls below a certain amount. To avoid incurring this cost, you should maintain your account above this minimum threshold.

Interest-rate tiered accounts

High interest savings accounts often have tiered interest rates depending on how much money you have in your account. In general, accounts with more savings tend to enjoy higher interest rates. As a result, if you're interested in high interest savings accounts, you should have as much of your savings as possible in the account in order to enjoy the best interest rates.

Purpose of savings account

Ultimately, how much money you keep in your savings account also depends on how you wish to use the account.

Some people prefer a locked-in savings system, where they deposit money into their savings account and never withdraw cash from it. This is most common with higher interest accounts or retirement savings accounts. If this is your preference, you should set aside money for your daily expenses and potential emergencies before depositing cash into the account. The amount of money you keep in this account will also be relatively lower.

On the other hand, other people use their savings account for both savings and spending. This usually applies to savings accounts that offer sub-accounts for you to plan how to use your money. In this case, you might want to store more money in your savings account since you're using the cash on hand for both savings and essential daily expenditure.

Liquidity of account

How much you keep in your savings account could also be dependent on how accessible these funds are. If you are looking to use your savings account for day-to-day expenditure or as an emergency fund, then accessing your money quickly could be important to you. Therefore, you would keep more money in an accessible account and less money in accounts that take days to withdraw from.

*Whilst every effort has been made to ensure the accuracy of this calculator, the results should only be used as an indication. They are neither a recommendation nor an eligibility test for any product and should not be construed as financial advice, investment advice or any other sort of advice.

Protecting your accounts

Whether you choose to keep more or less money in your savings account, it's important to ensure that your account is secure. Here are some useful tips for you to keep your money safe.

Use your account's security features

Bank accounts tend to come with an array of security features that you shouldn't hesitate to use. This could range from two-factor authentication systems to automatic text messages being sent to you every time a transaction is made. Enable all the security features that come with your savings account and check in with your bank if you ever spot unusual account activity.

Use an account-tracking platform

Online smart money management tools are another great way for you to monitor your accounts. The Finder app, for example, allows you to connect all your bank accounts, credit cards, investments and loans to a single dashboard. This makes it much easier for you to monitor your finances and receive alerts when suspicious activity occurs. Besides this, the Finder app collates your transactions, making it convenient for you to take note of unapproved transactions. Beyond acting as an account-tracking platform, the Finder app helps you manage your money better by keeping you up to speed with your credit score and helping you get the best savings deals – all for free.

Monitor your account regularly

You should check your accounts and transactions at least once a month. This way, you'll know when any suspicious activity has occurred and be in time to inform the bank. The faster you realise an issue has arisen, the quicker the bank can freeze your account or help you recover any money lost.

Be street-smart

Always be wary when revealing your savings account details. From providing your bank details to an ecommerce retailer to keying in your account PIN at a public ATM, it's essential that you stay alert and cautious when providing sensitive details. This could go a long way in helping you keep your savings safe.

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