There’s generally no limit to the amount of money you can deposit into a checking or savings account once you open it, but you might be limited to how much you can initially deposit into an account like a certificate of deposit or money market account. In addition, you’ll only be able to have a specific amount of your money insured by the FDIC.
Reviewing examples of bank accounts and how deposit amounts affect your fees, insurance and potential interest will help you choose the right type of account for you.
Checking and Savings Accounts
There’s usually no limit to how much you can deposit into a checking or savings account, either when you open the account or during its lifetime. Some banks have limits on the number of bills or checks you can deposit into an ATM during one transaction, but not on the limit of the deposit.
When you make large deposits, the money won’t be available to spend right away. For example, if you deposit a $100,000 check into a checking or savings account that already has $50,000 in it, you won’t be able to withdraw that $100,000 (or any amount over $50,000), until the $100,000 check clears.
This can take several days, depending on how the deposit was made. If it was made with a paper check, credit card balance transfer or ACH deposit, you’ll have to wait. If the money comes in via a wire transfer, your money might be available immediately.
CDs and Money Market Accounts
When you open a certificate of deposit or money market account, these products are often available for a minimum initial deposit and/or have specific time limits you need to keep the money in the account (to avoid penalties). So, if a CD has a $1,000 initial deposit requirement, you couldn't open it with less than that.
FDIC Insurance Limits
The Great Depression of the 1930s devastated the U.S. economy, in part, because banks failed, wiping out the savings of millions of Americans who had not gambled in the stock market. To prevent this from happening in the future, the U.S. government created the Federal Deposit Insurance Corporation.
Today, if you bank at an FDIC-member bank (most banks are), your savings or checking account would be insured for up to $250,000. If you want to protect more money than that, you can set up separate accounts for partners and children, or you can open another account at another institution
When you have these amounts of money, however, you’ll probably want to invest your money into higher-interest financial products, such as a mutual fund, IRA, individual securities or a 401(k).
Read More: Are All Roth IRAs FDIC Insured?
Minimum Balance Requirements
You should always be aware of whether a checking or savings account you are thinking about opening has a minimum daily balance amount. If your account does and you go below it, you might be charged a monthly fee, in the range of $15 to $25.
Banks need to make money off the services they offer you. If you have a fee-free checking account, how does the bank make a profit? They do it by lending your money to others and charging interest. That’s why they encourage their customers to keep a specific amount in their accounts to avoid fees.
Bank of America, for example, charges a $15-$25 monthly account maintenance fee if your balance goes below their different business and checking account $3,000 to $5,000 minimum daily balance requirements. This adds up to $180 to $300 a year in fees you’ll pay if you don’t maintain your minimum balance.
You’ll pay a $5 monthly maintenance fee if your daily balance goes below $300 in a regular BOA savings account, unless you link your account to an interest checking or Advantage account or enroll in their Preferred Rewards program.
Steve Milano has written more than 1,000 pieces of personal finance and frugal living articles for dozens of websites, including Motley Fool, Zacks, Bankrate, Quickbooks, SmartyCents, Knew Money, Don't Waste Your Money and Credit Card Ideas, as well as his own websites.