Four in 10 Families Have No Savings Account at All. We Ran the Fed's Numbers on What That Costs.

If all your cash lives in one checking account, you have a lot of company. And that company is earning close to nothing.

The Fed released its 2025 Survey of Consumer Finances on October 9. It’s the Fed’s detailed survey of family balance sheets, run once every three years. The headline report says the typical family holds $8,200 across checking, savings and money market accounts. That’s down 6% from 2022 after inflation, while median income rose 7%.

Incomes up. Cash down. Fine, but the report doesn’t say where the cash sits. So we downloaded the Fed’s public data file and counted.

The number nobody printed

43.5% of families report no savings account, no money market account and no call account. None. Every dollar of cash they have sits in checking or on a prepaid card. Under 35, it’s 47%.

Those families hold a median of $1,910 in cash. The Fed’s report puts median non-housing spending at $33,700 a year, about $2,800 a month. Measure each family against its own spending and 53% of the no-savings group couldn’t cover one month. Among families that do have a savings-type account, it’s 14%.

Before you say “that’s just income”: it isn’t only income. 26% of the families with no savings account earn $100,000 or more. And 13.8% of all families have no savings account but $5,000 or more sitting in checking.

We can’t prove the account causes the cushion. The survey shows a gap, not a mechanism. But a separate account with its own rate is the cheapest piece of the fix.

What checking pays you

The FDIC’s national average for interest checking is 0.07%. Plenty of checking accounts pay zero. The national savings average is barely better at 0.37%. The FDIC weights that average by deposits, so the giant banks holding most of the money drag it down.

Now the other end. On October 10, SwitchWize found PiBank paying 4.25% on savings with no opening deposit and no strings, and Peak Bank at 4.27%.

Put $5,000 against it. A year at 0.07% earns about $3.50. A year at 4.25% earns about $212. That’s real money for a 10-minute signup.

Here’s the bank’s bet: your checking account is where your paycheck lands, so the cash stays put out of habit. The bank lends it out and keeps the spread.

Do this now

Open a no-fee online savings account that publishes its rate. Link it to your checking. Then set an automatic transfer for payday, even $50, so the account fills without you thinking about it.

Your first target is one month of spending. For the typical family that’s about $2,800. Leave enough in checking to cover your bills and move the rest.

Run your own numbers through our savings calculator. For where the best rates sit, check our savings hub and best savings picks. Already have a cushion and want more yield? We broke down Treasury bills against savings accounts.

Verdict: keeping every dollar in checking is dumb math when a 4% account costs nothing to open.

How we counted

We used the Fed’s 2025 summary extract file and its survey weights. “Savings-type account” means the survey’s savings account, money market account or call account categories. The Fed’s savings category also counts health savings accounts, so the no-savings share is, if anything, conservative. Months of spending compare each family’s total in checking, savings, money market, call and prepaid accounts with its own reported non-housing spending over the past year.

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