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Is It Possible to Have Too Much Money in Your Bank Account?

Is It Possible to Have Too Much Money in Your Bank Account?

February 16, 2023

Are you hoarding cash?  No, not under your mattress but in your bank account. 

Believe it or not the biggest issue with having too much cash in your bank account is that it can cost you opportunities for growth. Think about it this way — when you store your money in a savings account, you don’t earn any interest on that amount. If you can invest that cash into something like stocks or mutual funds, they can offer returns over time, increasing the amount that would have just sat in the bank.

So where do you start?  How much money is too much in savings?

Begin with your emergency fund:

Having an emergency fund helps build financial security for yourself and your family by providing a safety net in case something unexpected occurs. This ensures that your family has enough money for basic needs and protects against potential long-term financial problems due to accumulating debt from unforeseen expenses. Some financial experts recommend keeping 6-12 months' worth of living expenses in your emergency fund in order to provide maximum protection against unexpected events such as job loss or illness in the family. 

Next deal with extra cash:

While you might feel more comfortable having a stash of cash in your bank account, it can actually hurt you in the long run.

“The downside of leaving too much money in cash is opportunity cost. You don’t want to look back 10 years from now and realize that, had you simply invested that extra cash, you would have a lot better return. For example, if you have $100,000 more in the bank than you need (we’ll help quantify that), and you invested it at a 7% return, in five years it would be worth over $140,000.” - MarketWatch

Investing can be intimidating, especially if you have been comfortably stockpiling cash in your bank account.  If the words “stocks and bonds” or “mutual funds” frighten you, then the next step would be to find a financial advisor to help educate you on how to reach a long-term return that would surpass your amount in savings.

How an advisor can help:

Investment Opportunities

The most obvious way a financial advisor can help you is by providing suggestions on where to invest your excess cash. They can also assess your risk tolerance and provide personalized advice on which investments are best for your individual situation. This could mean helping you find stocks or mutual funds that align with your goals, or it could involve something more complex like setting up a trust or other tax-advantaged investment strategy.

Financial Planning

In addition to helping you invest your money, a financial advisor can also review your entire financial picture and offer advice on how to better plan for the future. They can look at things like budgeting, debt management, retirement planning, estate planning, and more and offer guidance on how to make the most of your money over the long term.

Tax Strategies

Finally, some advisors specialize in tax strategies that can help reduce the amount of taxes you owe each year. This type of service is especially helpful if you have significant investment income or other sources of income that come with high taxes. A good tax strategy should ensure that all laws are followed while minimizing taxes due so that more of your hard-earned money stays in your pocket each year.


Finding yourself with too much money in the bank is certainly an enviable problem to have—but it still needs addressing. Whether you need help investing, creating a long-term financial plan, or finding ways to minimize taxes due each year, working with a qualified professional is one of the best steps you can take toward building a secure financial future.