I would venture that balances might be higher due to direct deposit and then not diverting some funds elsewhere. Also, the fact that traditional savings and money markets accounts don't pay much interest, so almost why bother, especially if you are making substantial contributions to retirement accounts, stock market, etc...also deducted automatically from your paycheck,

We don't keep anymore in our checking account than is required to pay mortgage, loans, groceries, gas, utilities, and a chunk of misc. It's not used as a savings account nor is it allowed to accumulate.

I agree with Joaniepoanie that the most likely reasons are low interest rates and minimum balance requirements to avoid banking fees.

Yep. Minimum balance, low interest rates. I'm not keeping more than is usual on hand.

I shop a lot! :0)

We keep about $5M usually, but then we sometimes need a good chunk of change if we need a tractor tire or so. We have a separate farm CC, but just one interest bearing checking account.

KK

Well, I also don't spend money like I used to. Kids are grown, college tuition and apartments are behind us, weddings over, and I don't need as varied a wardrobe now that we are retired. We live a quiet, simple life and like it that way. We will take the kids to lunch and dinner when we get together, help with little things for their house, but only one is in a house. So, we live quite cheaply with our own house almost paid off too and the cars paid for too We don't need a fat checking account as in days of yore.

I've been thinking about that.......I just bought a used car, and paid with a $9000 check! Now isn't that ridiculous? I don't know why I keep so much in checking.....lazy, I guess. Well, it's a lot lower now, of course!

I've been thinking about that.......I just bought a used car, and paid with a $9000 check! Now isn't that ridiculous? I don't know why I keep so much in checking.....lazy, I guess. Well, it's a lot lower now, of course!

I guess it goes back to the days when we barely kept enough to cover bills, plus $100, so we wouldn't be overdrawn...

Yep, I know we always keep the minimum required $5M balance. To avoid all those pesky monthly fees and charges. LOL

I suspect Korn_Kat meant $5,000, not $5,000,000. Of course, I could be wrong...

At the end of my pay period, I'm lucky if I have $50 in there

fun2bhere....The Roman numeral M = 1000

$5M = $5,000

No, typically $5M = 5,000,000 while $5K=5,000.

We keep way more in our checking account balance than the $4K mentioned above. We are both retired & our pensions & SS direct deposit, so it just mounts up. There really is no point in putting it into a savings acct or CDs that pay a pittance of interest. We have other money in stock market IRAs, etc.

If/when interest rates go up, we probably won't keep such higher amounts in checking. Right now it is just a place to park it as opposed to under the mattress.

For us same as BeeOhio....both our checks are direct deposit so it just accumulates. No point diverting it since money market and savings don't pay interest. Sometimes I will divert funds if I am setting it aside for a special purchase. Also, we pay our Visa off every month which fluctuates so we let the $ sit in there so we have enough to pay the balance.

We have never used a commercial bank.....credit unions usually don't have minimum balances or fees or if they do, they are super low.

M being 1000, I didn't know how to abbreviate $5000.00 in roman numerals. I know it's a V with a line over the top, but don't know how to type it.

I wouldn't know what to do with $5,000,000 in my checking account. But give me a few minutes. LOL

KK

Ours is enough to pay all bills for the month with a few hundred extra just in case something comes up. I move cash around accordingly. I do not like to have too much more in the checking account than we need for the reason you state. It is not a savings account, just a means for money in, money out to pay those bills which 95% of them are on autopay.

Our bank has no minimum balance for checking.

I'm just struck with the *difference* in average balances. Really, from $788 in 2007 to over $4K today? Disregarding that boom year, if $1400 was a norm, why so much more from 2012 forward?

Direct deposit changes nothing for me. I have always run everything (income and outgo) though our checking account, just to have a record all in one place.

We also have a larger cash position in our portfolio -- same thing as the larger amount sitting in checking.

Why is this money just 'sitting'? Are people (and banks) still nervous about investing? The soaring DOW hasn't tempted many -- it probably only reinforces fears!

I think people feel more secure having some cash on hand now after the economic turmoil in 2008. So many people lost their homes. It can be difficult sometimes to liquidate other holdings to cover the mortgage. Most people also don't have the amount of emergency savings they should have in case of job loss so they may have higher checking accounts to cover that.

I think in 2007 a lot of people were over stretched from the lax borrowing conditions, so they had less cash on hand. I like to think people learned lessons from it.

I bet region factors in as well. Where I live, $4k is less than a single mortgage payment so it would be bad to only have that amount but in lower cost of living areas, that could be several months of living expenses. Personally we keep more than the average balance but transfer excess over when it hits a certain threshold into savings or investments.

We have no fees banking with our credit union. You get that once you reach a certain age. :) I also use Tangerine (used to be INGBanking). It also has no fees. And because I don't have an ATM card attached to it, I'm less likely to touch the money I transfer into my account each payday. I did have to take some out for new tires for my truck. That hurt...

There is more money in our checking account that there should be. Two special occasions:

One: We bought this house not too long ago and are in the process of remodeling. Most is done, but one bathroom remains. $$ is still in our regular day-to-day checking account to cover that remodeling.

Two: This spring we had a major hailstorm in our town. We will be getting a new roof, guttering, screens, etc. etc. and the insurance company has already advanced us some of the $$ for replacements. We haven't had the job done yet, but we will. So that $$ is still sitting there in our account, waiting.

Hey - I would have believed the 5 million, if KornKat was buying very many tractors! .... OK, just went for a re-read and KK was talking tires, not the whole machine.

My monthly bills are generally $5,000 - $7,000, by the time I pay feed, vet, electric, and equipment repair bills. December is usually a humdinger of a month since we purchase all our inputs for the next year; bulk fuel, seed, chemical, fertilizer, and sometimes a few loads of calves. If we are buying calves - it runs around $40K a load. We buy several loads.

My electric bill can be well over 1,000 a month in the summer if we are irrigating.

I never leave over 200,000. in an account. If are marketing grain or cattle I keep the money split so it doesn't go over. Unfortunately - it goes back out pretty darn fast!

With the various direct deposits into the checking account it gets up there pretty high, however I usually transfer to our savings when it gets really high and my main reason for that is in case someone should gain access to my checking account through debit card or something like that. I pay bills online through my bank so when I see it creeping up I do a transfer.
We don't carry a lot of cash, and I don't carry a check book very often so if we are buying something it will usually be credit card or on some occasions debit card which are all paid off each month. It is what works best for us.