Average Balance of Savings Accounts in the United States

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An analysis of federal data demonstrates that many bank accounts contain far less cash than American consumers would need to cover several months without income. According to the Federal Reserve's Survey of Consumer Finances (SCF), with the latest data from 2019, the median transaction account balance is $5,300. Transaction accounts comprise savings, checking, money market, call accounts, and prepaid debit cards.

While the appropriate savings amount varies according to one's income and expenditure, it is generally advantageous to aim for at least 15% of one's pre-tax income, according to Erik M. Baskin, founder of Baskin Financial Planning in Dayton, Ohio. It is also critical to consider paying down debt and setting specific savings goals. "Once you are debt-free, establish goals, such as developing a six-month emergency fund, and allocate savings towards that goal," says Jay Zigmont, PhD, CFP, founder of Childfree Wealth in Mississippi.

To boost your savings, consider stashing them in a high-yield savings account or a certificate of deposit, taking advantage of the high rates available on these accounts which could help prepare you for a possible recession.

Key Savings Statistics

- 98% of U.S. households own a transaction account like a savings account.

- Individuals who are single and younger frequently have lower transaction account balances.

- In January 2022, only roughly four out of ten American households claimed they were able to handle an unforeseen $1,000 expense, such as a car repair or a medical bill.

- In June 2022, 58% of adults surveyed stated they were uneasy with their emergency savings level.

- Over the previous year, about 76% of American adults did not witness the growth of their emergency savings balance.

- As of January 2022, slightly over half of U.S. adults have more emergency savings than they have credit card debt.

Despite nearly three out of five adults who keep up with their retirement savings compared to the previous year, as much as 55% still admit falling behind on this matter. The latest data from the Federal Reserve and Bankrate highlights that while the median savings value of a bank account stands at $5,300, the average balance is much higher at $41,600. However, the mean value is influenced by a few individuals with large account balances, leading the median value to provide a clearer picture of the average savings of a household in the USA. Furthermore, the SCF reveals that couples with no children represent the group with the highest median balance, while single parents tend to have the least savings.

The age of individuals stands as a relevant factor concerning savings, with households composed of older members having higher account balances, up to three times more compared to the younger generations. However, households with individuals aged 45-54 showed higher median balances than those aged 55-64. Those aged 65-74 also displayed higher mean balances than those aged at least 74. It is only logical that older individuals have had more time to build wealth, and thus their savings surpass that of younger generations. Nevertheless, younger individuals are often burdened with student loans, and this may influence the disparity between savings levels. Furthermore, according to the 2021 Consumer Expenditure Survey from the Bureau of Labor Statistics, those between 45-54 years of age have the highest average yearly expenses. A survey from June 2022 also revealed that 40% of Millennials admit having enough savings to cover expenses for only three months, compared to 47% of Generation Xers and 62% of Baby Boomers.

The amount of bank fees paid by consumers varies by age, and younger generations tend to pay significantly more than older ones, as determined by a study from Bankrate. Baby boomers pay much less in monthly account fees than Gen Zers, whose fees can negatively impact their savings. Fidelity Investments suggests that individuals should have at least one year's worth of their annual income saved for retirement before they turn 30.

According to data from the SCF, education level also plays a role in determining bank account balance. The median and mean balances tend to increase with the amount of education an individual has received. OneClass conducted a survey in 2019 which found that mathematics majors tend to have the highest median account balance, while science majors have the lowest. Income level also has a correlation with savings, with the greatest increase in median account balances occurring between the ,000 and ,000 income ranges. Those with an annual income in the ,000 range tend to have a median account balance at least ,000 greater than those in the lowest income brackets.

Differences in Average Savings Across Races and Ethnicities

A notable gap in wealth exists between non-Hispanic white individuals and those in the Black and Hispanic categories. Those classified as non-Hispanic whites tend to have significantly higher mean and median account balances, marking a racial discrepancy as white families hold more than quadruple the wealth of Hispanic families and more than five times the wealth of Black families.

Race/Ethnicity

Median Bank Account Balance

Mean Bank Account Balance

White

,200

$51,510

Black

$1,510

$13,270

Hispanic

$1,950

$11,860

Other*

$5,000

$43,890

*The "other" classification from the SCF encompasses individuals who self-identify as Asian, Native American, Alaska Native, Native Hawaiian and Pacific Islander, as well as those with multiple racial identities.

How Much Money Should You Allocate to Savings?

Many advisors recommend putting away 15 to 20 percent of your income into accounts, including certificates of deposit, money market accounts, and savings accounts, that will help safeguard and grow your savings.

The amount individuals should save hinges on their spending, according to Greg McBride, CFA, Bankrate.com's Chief Financial Analyst. Ideally, individuals should accumulate enough savings to cover six months of expenses - with sole breadwinners or self-employed persons potentially requiring nine to twelve months of savings coverage.

— Greg McBride, CFA, Chief Financial Analyst for Bankrate

To determine your monthly expenses, create a budget listing your monthly income and subtracting it from expenses, such as transportation, housing, groceries, and entertainment, and credit card bills.

According to a recent Consumer Expenditure Survey issued by the U.S. Bureau of Labor Statistics, the average person had approximately $20,503 left over in income after expenses in 2021. Based on McBride's suggestion, an individual should save $33,462 for six months of expenses. The report demonstrated the typical person spent $5,577 monthly.

The Bottom Line

While inflation troubles any savings effort, budgeting and reducing spending yields money to place into an emergency fund. After creating your emergency fund, also consider contributions to retirement and other savings objectives. Over time, an individual may choose to expand retirement savings contributions, aiming to accumulate eight times their salary by sixty years old—the value suggested by Fidelity.

To maximize your savings, look for the best high-yield savings account. Additionally, Bankrate's savings calculators assess the amount needed to save relative to your goals, and households may use the home budget calculator to track spending.

Prior to this iteration of the piece, Karen Bennett made a valuable contribution to its formation.