Though it’s not always a great idea to compare your bank account balance to other people’s, sometimes it’s nice to know where you fall along the financial scale. Here we’ll take a look at the government’s findings on what the average American bank account looks like.
Where The Info Comes From
When it comes to discovering what average assets look like, a good place to start is the Federal Reserve. Every few years, they gather consumer information and measure average checking, savings, and money market accounts – including prepaid debit cards. This is done through a survey called the Survey of Consumer Finances (SCF). The most recent SCF was conducted in 2016 and the info you’ll see here reflects its findings.
In order to understand the study, it’s important to consider that it reveals both the median and average account balances of those surveyed.
The average balance was calculated by adding up the balances of everyone surveyed and dividing the sum by the number of survey participants.
The median was calculated by arranging all the balances of those surveyed from lowest to highest and selecting the number in the middle.
Why Does It Matter?
The reason the median number is so important is because a small number of incredibly wealthy people could skew the “average” enough to make it unrealistic. For example, consider that you surveyed 5 people. If 4 of them had $10 and 1 of them had $1,000, then their average account balance would come out to be $240. Although this is their “average” balance, it doesn’t reflect what most of them actually have realistically.
The Survey’s Discoveries
The average American bank account from the 2016 survey was no less misleading when revealing the national average balance to be $40,200. By contrast, the median bank account value for U.S. households was $4,500. In other words, when considering checking, savings, and prepaid debit cards balances, around $4,500 is a more realistic view of what’s “average.”