How much cash should I keep in my bank account?
This is one of our most asked questions. Many people keep a large amount of cash in a checking/savings account... but should they?
Why shouldn't I just keep all my money at the bank?
One of the biggest issues with this strategy is that the money in your bank account is earning little to no interest, while inflation averages about 2%.
While your funds in the bank might be staying the same, your purchasing power is not.
Over time, the market has consistently outperformed safer investments like CDs, bonds, and cash in traditional checking/savings accounts.
But shouldn't I have an emergency fund?
Of course! Always keep cash available in a quicker-access account to cover expenses in case of an emergency. The general rule is to maintain enough cash to cover 3-6 months of living expenses.
So what does this actually mean for me?
Ultimately, it means that if you have more than 3-6 months of living expenses sitting in your bank account, you might want to consider investing that money! You'll want to account for any upcoming (large) expenses as well, but any excess may serve you better in one of our portfolios.
At Ocker Financial Services we have portfolios that serve as cash/CD alternatives and offer the opportunity for higher returns while maintaining a degree of safety.