How much cushion do you leave in your checking account

[free4now]

Following on the heels of the poll http://early-retirement.org/forums/index.php?topic=9311.0 about whether people reconcile their checkbook, this poll seeks to find out how much cushion people use if they don't reconcile. 

 

[brewer12345]

My checking account is liked to my main taxable brokerage account and backed up with an overdraft line. I'd probably have everything stopped by the fraud detectors before I even got close to bouncing a check.

 

[unclemick]

Ballpark - maybe 3 to 6 months, sometimes a years worth if I anticipate some fun money needs on the horizon. I don't try to squeak out the last dollar of extra interest before transferring from MM.

heh heh heh heh - yep - could run a tighter ship.

 

[GangnamStyle]

Wifey and I are trying to stick to about 200.00 cushion. Stick every last thing onto credit cards, or do without until we can ach some money out.

 

[Delawaredave]

Has anyone "abandoned" their local bank ?

Only reason I have a local bank account is for no-fee ATM access around town. I never go to the bank.

Etrade and some other on-line brokerages now have "no ATM fee" accounts - where you can use their card at other bank ATMs - and they reimburse for any fees (up to some number of transactions per month).

If I did this, I'd have one less account - and drawing monthly cash from MM account at Etrade (which I suppose would earn a little more intest than local checking account.

Seems like a good idea. I hate the proliferation of "community bank branches" springing up all around me.........

 

[Nords]

Has anyone "abandoned" their local bank ?

In 1989 we were required to establish an account with a "local" bank by our escrow company in order to close on our home. Apparently the Hawaii branches of the Navy Federal Credit Union do not qualify as a local bank because it's a Virginia-chartered credit union.

Once we'd closed on the home we no longer needed the bank account. As soon as Bank of Hawaii hit us with their first fee increase we closed the account. Of course the following month there were a few pennies of leftover interest which resulted in a comedy of errors of minimum-balance charges, overdraft charges, and the real meaning of the expression "closing an account". None of this experience made us a fan of local banking.

We belatedly realized that not all title companies required local banks. Other people must have realized this too, because shortly afterward the "local bank" requirement went away.

Today I do all our banking via ATM and the Internet. NFCU has learned that if I have to visit their offices then there's gonna be trouble...

 

[brewer12345]

Dave, that's what  have done.  When I moved a few years ago I had a natural break from my old local bank, so I started up a "bankerage" account.  But I still maintain an account with a local bank so I have a place to cash checks, get change, deposit currency, etc.  Its peanuts, though.

 

[audreyh1]

I always know within a few days the exact balance of my checking - I download the recent checks and credit card charges into Quicken at least twice a week, and my "scheduled transactions" in Quicken know any anticipated monthly/semi-annual charges like what has been set up for bill paying.

Having said that, I tend to maintain a minimum balance of at least $1500 (after all anticipated bills). Actually, I think my current bank only requires a minimum balance of $800 to avoid any charges, but I was "trained" by my previous bank and prefer to keep the higher amount.

Audrey

 

[saluki9]

My "local" bank is the largest bank in the US. I keep 2 months worth of expenses in the account which is more than I probably should.

I'm just worried I might miss that whopping .75% interest they pay me

 

[d]

i generally have about 2k extra in the checking account ... just in case ...

 

[REWahoo]

We keep less than 25% of monthly spending as a cushion, plus another 25-50% (pays only 2% or so) in a savings account at the same bank. Money from savings can be immediately electronically transferred to checking if needed.

I've had my checking account at the same bank (USAA) for 36 years. They have only one brick & mortar location, so all banking was done by mail before Al gave us the internet. We've lived in other cities and not having local branches was never a problem since they reimburse for all ATM fees up to $15 per month.

 

[Nords]

I've had my checking account at the same bank (USAA) for 36 years.  They have only one brick & mortar location, so all banking was done by mail before Al gave us the internet.  We've lived in other cities and not having local branches was never a problem since they reimburse for all ATM fees up to $15 per month.

Hunh, I didn't know that they reimbursed ATM fees. I'm going to have to give them another look.

I learned recently that USAA's credit cards don't charge a fee for cash advances. They already provide CDW insurance for rental cars. I wonder if they reimburse currency-conversion fees?

 

[BOBOT]

I reconcile every month or two with online balkance (EVERYTHING done online thru QUicken or occaisionally on bank website).
Keep the bare minimum to cover monthly expenses.
The neat thing is we have an overdraft line which is occaisionally nicked at the end of the month - few 100 max - & we pay it off on payday. Have never been charged a penny in interest.

 

[Zipper]

We bank with TD Canada Trust. As long as you carried a $1000 balance all fees were waived. So we always kept at least that amount in the account.

When I turned 60 in 2003 I was automatically enrolled in Plan 60. No fees period!  I drained that $1000 pretty quickly.

Most of my banking is on the net and I get cash at ATM's. I might let the balance go below $10. We've never had a problem.

 

[d]

I might let the balance go below $10

much too close to the edge for my comfort level, but if it works for you!

 

[SteveR]

We use a Credit Union and do mostly on-line banking so I see my balance frequently during the month and can adjust it by moving money from a the savings account or the MM accounts as needed. We do a lot of moving around of $$ because some things are deposited directly into the savings account while others go directly into checking. The MM is used as a large fund for long term (6-10 months) of expenses while the savings account is the primary slush fund for transfering into checking because it has a slightly better interest rate.

We keep about $1000 extra in checking just because we sometimes forget to write down a handwritten check sometimes and I don't want a $20 bounced check fee. The CU has no overdraft protection usually, but since we have several accounts with them they have reversed the only charge we received a couple of months ago.

I hate banks and refuse to use one.

 

[TromboneAl]

We keep about $500 total in our local checking account. Since we pay everything via credit card, we rarely need the money in it. Elec bill is the only one that gets paid automatically from checking rather than from the CC.

We don't use the ATM much, because I get the small amount of cash that I need from cash-paying gigs.

I'd keep more in the account, but I'm insulted by the .5% interest rate.

 

[Payin-the-Toll]

Have balanced our checking account to the penny for the last 30+ years, and with free checking have never paid any fees. Keep an extra $1000 (bank requires $500) in the account but don't show it in case I lose checkbook (I know-it's stupid, but it's always worked for me). It's just extra $ kept around for emergencies even though we keep $20k in a money market for emergencies-go figure-I'm just a conservative hill-billy when it comes to money, but not politics.

 

[jazz4cash]

Ok, its not an either-or thing cause I dont reconcile and I dont keep a cushion either. I never worry what my balance is day-to-day, I only care if checks get paid, so I have overdraft protection linked to a savings account and a credit card. If it gets to the credit card its a $10 cash advance fee. If I get too many of those, I guess I gotta make a change. I do as much as possible online and xfer funds to maximize my MM account at GMAC which pays 6%. That account pays all the big bills, like mortgage anyway.

 

[ladelfina]

Have an attached overdraft account of $2500.. why $2500? I dunno, that's what they offered. Only went into the red on it once for a couple hundred bucks and had to go through a couple of tries to get it back down to $0, given that I paid off what appeared at the ATM to be outstanding, but then the interest charges got charged later to the OD acc't., which then accumulated interest themselves.. etc.! Kinda like Whack-A-Mole... No matter.. I'm unlikely to ever run up interest fees even equivalent to one bounced-check fee.

Had a similar instance to Nords where I closed a brokerage acc't. but they decided to deposit the MM interest ($0.32) and so I got statements for over a year with that figure (maybe by the end it was up to $0.34??) before they wised up and sent me a check for $0.34!! 

Very crafty, Payin-the-Toll.. writing in a lower balance!

 

[PsyopRanger]

DW and I have $2000 as our "Zero" level.  We have an online account due to living in Europe but also have a local account held in Euro at a local bank to pay rent, untilities, etc.

Are online account is also linked to our ING savings account to transfer funds if neccessary.

 

[retire@40]

I have a $0.01 cushion.

As long as you keep a current running balance in your account, why keep any more than you need in the account, especially if you are only getting under 1% interest?

I have the account tied into a money market account at my bank and a couple of outside banks (all free services), and once a week I move enough over to cover the expenses for the week. If I really feel lazy and I don't have a lot of expenses, I may move enough to cover the expenses for the entire month.

 

[KB]

I keep a $300 cushion in my checking account, mostly to prevent a monthly fee. I have a $1000 savings account attached to it where the CU would pull money if I had an overdraft. They charge $3 for the overdraft, but I've never had to use it.

All other cash is in a MM and I fund my checking account once a month.

 

[CybrMike]

my MM account at GMAC which pays 6%. 

HOw do you get 6% MM at GMAC ? I see 5% APY MM rates on their homepage? Is this a special negotiated rate?

 

[retire@40]

HOw do you get 6% MM at GMAC ? I see 5% APY MM rates on their homepage? Is this a special negotiated rate?

You don't. He misspoke by saying it was a money market account. It's called a Demand Note and it's not FDIC insured, thus the extra basis points to compensate.