Banking Blog

Finance Blogs » Banking Blog » $12K in checking? You’re Lemon-ing

$12K in checking? You’re Lemon-ing

By Claes Bell ·
Thursday, February 21, 2013
Posted: 5 pm ET

We are all Liz Lemon.

In one of the early episodes of the recently concluded NBC series "30 Rock," Jack Donaghy, played by Alec Baldwin, asks Tina Fey's character Liz Lemon where she invests her money. She replies, sheepishly, "I have like 12 grand in checking."

But the latest numbers from the Federal Reserve reveal that Liz is far from alone in keeping a big chunk of her money in checking. Checking account balances have risen sharply since the financial crisis rocked markets and interest rates on certificates of deposit have fallen to all-time lows. Now, there is $902 billion sitting in American checking accounts, the highest it's been since the Fed began collecting data in 1959.

In fact, the amount of money sitting in checking accounts actually has exceeded the total amount in CDs since late 2011, which hasn't been the case since the early '70s.

Of course, you could always put your savings into a balanced portfolio of stocks and bonds designed to grow wealth over the long term. But if you're committed to keeping a ton of cash in a checking account, there are ways to earn a return.

Many online banks and credit unions offer high-yield checking accounts that can pay up to 2 percent annually on your checking account funds as long as you meet a few conditions such as making a minimum number of transactions per month.

If that doesn't work for you, you can always link your checking account to a high-interest online savings account.

What do you think? Do you have most of your money in a checking account? Are you earning any interest on it?

Follow me on Twitter: @ClaesBell

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
March 19, 2013 at 3:04 am

Geez Louise! $8 million bucks!? A $100k in checking? I made $150k last year and I have $723 in checking AND savings! What in Sam's hell do u guys do for a living?!

March 18, 2013 at 8:34 pm

Everyone needs to keep at least $100,000 in their checking account at all times because you just don't know when you might need it for a rainy day. If you don't have that much then go out and borrow it from your friends. It is time to live it up and leave no stone unturned. We are in the time of prosperity thanks to Obama, everyone can be rich because the government has unlimited money to give away whether you can work or not.

March 18, 2013 at 8:02 pm

Sounds pretty smart that you have all that $$$ in checking accounts. You speak of FDIC as if you get your $$$ immediately....good luck with that...the FDIC has up to 99 years to pay on your insured losses.

March 18, 2013 at 6:42 pm

I have close to 8 million scattered in banks in CDs and Money Market accounts, just in case James was bragging....

March 18, 2013 at 6:18 pm

$12,000 isn't anything to be concerned about having that amount in checking accounts. I personally have over $1,000,000 in checking accounts scattered around at different (STRONG REPUTABLE) banks so i have the FDIC insurance and instant access to my money when the economy tanks! Its almost there now. I sure don't want to be paying penalties to Banks for getting what they owe me before the banking system goes under. Its almost there now!! If everyone would draw out their money or keep it in accounts where they can access it instantly, it would force banks to pay higher interest rates or dividends on your money.

March 18, 2013 at 5:14 pm

I keep my savings in short-term, investment-grade corporate bonds through a Vanguard EFT. It pays about 2% and the only cost is a $7.95 trading fee. Of course, it is not FDIC insured, but I see the risk as pretty low. The price is stable.

March 18, 2013 at 4:01 pm

My checking account is paying a better interest rate than my savings. If I could afford to lock away that money in a CD I would. What's your point?

March 18, 2013 at 1:44 am

Of course, if you are seriously injured and you don't have insurance it wouldn't matter whether you have $12,000 or $120,'re going bankrupt either way.

March 17, 2013 at 9:01 pm

We called up our Credit Union trying to see how we can payoff the remaining little bit of blanace on our home equity loan(yeah!!) and the customer rep asked my wife a little incredulously why we have a lot of money in our account! She was looking at around $12000 and saying that! Imagine a bank employee saying that! That amount just pays 2 months of bills! What has America turned into where people do not have any money in the bank, and we are all just 2 paychecks away from default on all our bills. Sad but true.

March 17, 2013 at 8:04 pm

Like everything else luck rules risk related investments like the market. If you are forced to start selling stock at the wrong time because you need the cash or because of government regulations you call lose a large portion of your investment. Like jamie said, the stock market is only for investing money you can afford to lose. You never know when some drunk is going to draodside you and you lose everything because you are out of work. The drunk's (if he has any) car insurance is only going to pay a pittance of your bills if you are seriously injured. Us "Lemons" out there are looking for a garentee which we realize will bring in a lower reward than if we are willing to risk losing everything.