How much you should have in your savings account — and the right bank to choose

You can use a savings account to stash your emergency fund, save for a short- to -medium-term goal (like a car or vacation) or just keep cash you want siloed from everyday spending.

Unlike most checking accounts, your savings account earns interest — high-yield savings accounts, in particular, can deliver healthy returns. And unlike CDs or investments, money in a savings account can be withdrawn or deposited to your checking account as needed.

Your savings account is also insured by the Federal Deposit Insurance Corporation (or National Credit Union Administration, if it’s at a credit union) for up to$250,000per depositor, per insured bank, per account ownership category.

Not keeping enough in your savings account can mean paying monthly maintenance fees and missing out on interest. It also risks not being prepared for an unexpected expense, like a car repair or a medical bill.

But you can also have too much in your savings account, though, and miss out on higher long-term returns from stocks, bonds and mutual funds.

How much should you have in your savings accounts? CNBC Select spoke with Shon Anderson, president and chief wealth officer at Dayton, Ohio-based Anderson Financial Strategies, to find out.

While a checking account is for bill-paying and daily expenditures, a savings account is for more long-term goals, like a vacation or home repairs. It’s also where savers keep an emergency fund.

Anderson recommends keeping three to six months of living expenses (rent, food, utilities, car payments) in your savings account. Other experts recommend up to 18 months to protect against an uncertain economy and AI-related job shifts.

However much you decide is a sufficient buffer, Anderson said, link your savings and checking accounts.

“You can connect your accounts directly, if your bank allows, or through a payment app like Venmo,” he added.

A high-yield savings account can earn 10x as much as a traditional savings account, making it a smart option even when interest rates are lower.

One of our top picks for HYSAs is from Marcus by Goldman Sachs, which boasts a competitive yield, no minimum opening deposit or balance requirement and free same-day transfers of up to $100,000 for linked accounts.

Ally Online’s Savings Account also skips fees and minimums and account holders can divide the funds into up to 10 custom “buckets” to save for different goals in the same account.

Some banks levy monthly service charges and other fees on checking accounts, but most are avoidable with a minimum balance or direct deposit. Capital One 360 Checking is one of our top picks for checking accounts, with no minimum balance requirement and no overdrafts or foreign transaction fees.

We also like Chase Total Checking, which includes access to more than 5,000 branches and a generous bonus if you set up direct deposit.

Amoney market account(MMA) combines the easy cash access of a checking account with the interest-bearing power of a savings account. The EverBank Performance℠ Money Market account, for example, comes with check-writing privileges and an ATM/debit card. There are no overdraft or NSF fees and customers who maintain an average daily balance of at least $5,000 enjoy unlimited reimbursement of out-of-network ATM fees. (Otherwise, EverBank refunds up to $15 per billing cycle.)

CDs

Put money you’re confident you won’t need to touch for a while in a CD. It will earn a fixed interest rate and there’s no temptation to make frivolous purchases. Most banks require $1,000 or less to open a CD.

We recommend Ally Bank’s 5-year high-yield CD, which features daily compounding interest and no minimum deposit requirement. Ally also has a variety of other options, including bump-up CDs, which let you increase your interest rate during your term, and no-penalty CDs, which allow you to access cash from your CD before the term ends.

Investments

Investing in the stock market is a smart option for long-term (5+ years) goals, such as retirement. It comes with higher risk, but also higher reward: Historically, stock market investments have earned about 10% annually, compared to less than 5% for a high-yield savings account.

If you’re a beginner investor, the Vanguard Total Stock Market Index Fund (VTI) lets you be hands-off and has a super-low .03% expense ratio.

Catch up on CNBC Select’s in-depth coverage ofcredit cards,bankingandmoney, and follow us onTikTok,Facebook,InstagramandTwitterto stay up to date.

Goldman Sachs Bank USA is a Member FDIC.

Ally Bank is a Member FDIC.