How Much Cash Should You Keep at Home?

Reasons to Keep Cash at Home

There are two main reasons to keep cash in your home:

1. Preparation for a natural disaster or other emergency: Storing some cash at home helps make sure you'll be prepared in an urgent scenario when ATMs and credit and debit cards aren't operating. Particularly if you live in an area where storms, fires, earthquakes or other disasters are on your radar, you may already have an emergency preparedness kit. Keep enough cash to cover about a month's worth of the absolute necessities, such as groceries, gas and medical supplies.
2. Convenience if you occasionally need cash: Credit card acceptance rates during non-disaster periods are high: 96% of small businesses accept credit and debit cards, according to a January 2025 study by consumer analytics firm J.D. Power. But occasionally, you may need to pay the babysitter, support the school bake sale or pay in cash at a restaurant or cafe. Knowing you have cash at home can give you peace of mind if you're in a rush or can't easily get to an ATM.

How Much Cash Should I Keep at Home?

You should keep enough cash at home to cover emergency expenses for up to one month. The exact amount you save will depend on the number of people living with you, the specific expenses you'll have to cover and the amount you could spend on them in a month.

For example, as an individual living alone in a major city, you may need just $200 to cover the most basic groceries and gas until you can reach loved ones in an emergency. A couple living in a remote area who needs fuel to exit their neighborhood in an emergency may choose to stock away $500. If you have three kids and a family member who needs medical support, like a monthly prescription or an inhaler, you may decide to save $1,000 or more.

Where to Keep Cash at Home

Store cash in a home safe that's both waterproof and fireproof. This is to prevent damage during the kind of emergency you may need to use the cash to carry you through. Small safes can cost at little as $40, while larger ones can cost $150; the most advanced can cost $600 or more.

When deciding where to put the safe, think about what could cause damage to it. Keeping it in a basement will ensure it doesn't fall through the floor during a fire. If your house is at risk of flooding, you can place it on a raised surface rather than on the basement floor. You can also consider securing the safe to a solid structure so it can't be removed from your house during a burglary.

An emergency fund—despite the name—is for financial emergencies such as a job layoff or a major unexpected expense, not the more unlikely event of a natural disaster. It should be kept in a bank account such as a high-yield savings account. Experts also recommend keeping a much larger amount of money in your financial emergency fund—three to six months' worth of necessary expenses, including debt payments and health insurance premiums—than what you keep in cash at home.

Risks of Keeping Cash at Home

Here are the main reasons it's unwise to keep a large amount of cash in your house, beyond what you may reasonably need in a natural disaster or other major emergency.

• Stolen cash is nearly impossible to recover. Your money is safer in a bank account. While renters insurance often covers cash theft, the maximum you can claim is usually only a few hundred dollars. Alternatively, if the majority of your money is kept in a bank or credit union, it will typically be insured up to $250,000 per account holder by the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA). That insurance protects you if your bank or credit union goes bankrupt.
• Money stored at home won't earn interest. One of the most compelling reasons to keep most of your cash in a bank account is to help it grow. You'll earn more if you choose an account that pays more in interest than a traditional checking or savings account. You can compare interest rates, fees and features among high-yield savings accounts, certificates of deposit (CDs) and money market accounts to see which will pay the most interest while keeping your money as accessible as you want.
• Cash can get damaged. When it's not kept in a home safe, cash can get wet, rip or end up unusable if handled roughly. If you don't want to store cash in a safe and you're planning only to keep a small amount at home, you can look into alternatives such as Apple Pay or a peer-to-peer payment service. Those are backups for the times when cards are accepted but you don't have your wallet with you. You'll still need some cash available, however, for emergencies and for cash-only purchases.

The Bottom Line

While extreme emergencies like a house fire or hurricane don't happen often, they do happen. No matter where you live or what disasters are likely to occur in your area, keep a small amount of cash at home in case an unforeseen circumstance, like an ATM or credit card payment system failure, affects your ability to buy necessities like food. Keep only the amount you need to keep your family safe, and give the rest of your cash the opportunity to earn interest in a bank or credit union account.