How Much Money Should You Keep in Your Savings Account? Here’s the Sweet Spot

Oct. 5, 2024 - AOL

At the same time, you don't want to overfund your savings account, because doing so could mean missing out on better returns elsewhere. The best way to use a savings accountA savings account is a good place to park some cash for near-term purchases.

To figure out if you've overfunded your savings account, you'll need to decide how much money you want on hand for unplanned expenses. Depending on your comfort level and the type of job and expenses you have, you may decide that you need a six-month emergency fund.

That's because the stock market is likely to deliver a much higher return on your money over time than a savings account will...