According to Federal Reserve data, the median balances in American bank accounts vary from $5,400 for those aged under 35 to $13,400 for those between the ages 65-74. Median figures, which are a more accurate reflection of what typical Americans hold in their bank accounts than averages, differs for couples with and without children and single households. College-educated individuals reported the highest bank balances.
The Federal Reserve uses data from the Survey of Consumer Finances to understand the amount held in transaction accounts, which includes savings, checking, money market, and brokerage cash accounts, as well as prepaid debit cards. The overall median for all American households in 2022 was reportedly $8,000.
However, this figure does not provide the full picture as it varies considerably by age, family structure, and level of education. The median indicates the middle point in a data set, with half of the respondents reporting more savings and half reporting less. Over 98% of Americans across all age groups reported having money in bank accounts in 2022. The median balance for those under 35 was $5,400, while those aged 75 and older held a median of $10,000.
When it comes to family structure, the survey revealed that median values substantially differ between singles and couples. Single adults over 55 with no children had the highest median balance ($4,300), while couples without children had the highest median balance ($16,000).
Education level played a significant role in median bank balances. The results showed that individuals who graduated from high school reported median savings over three times higher than those without a diploma. College graduates, on the other hand, had over four times the median balance of individuals with some college education but no degree.
In order to grow their balance, individuals are advised to invest in a high-yield savings account, money market account, or certificate of deposit (CD). High-yield savings accounts not only allow instantaneous access to cash but also provide an annual percentage yield (APY) which varies from bank to bank. Money market accounts also offer high APYs and the facility to write checks. CDs, on the other hand, provide a guaranteed fixed APY for a specified term, usually ranging from 3 months to 5 years, with no risk of interest rate fluctuation. However, withdrawing cash from a CD before its maturity date can lead to penalties.