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According to Bureau of Labor Statistics data, the average single person can spend between $238.46 and $434.33 per month on groceries. Many factors will impact a given individual’s expenses, such as location and eating style.

Nevertheless, looking at averages across the country can help one figure out if they are within the range of other people in their region, age bracket, and household size. Learn more here, including advice on trimming your grocery budget.

Grocery Bills and Inflation

Inflation can have a big effect on the price of groceries, making it harder to stay within your budget and reduce one’s bill. According to the USDA’s Economic Research Service, food prices rose 3.4% between April of 2023 and 2024.

That’s not a negligible number, but compared to the 10.8% increase in food prices between April of 2021 and 2022, it’s somewhat less challenging. That staggering increase was partly due to inflation and partly due to food shortages caused by the COVID-19 pandemic.

Average Monthly Grocery Budget Bill for One Person or More

There are several factors that determine how much a person might spend on groceries each month. These include age, gender, how many people live in the household, and monthly budget. Another major factor is the region one lives in. Some areas have much more expensive food than others.

The most expensive city for groceries is Honolulu, Hawaii, where the monthly average grocery bill was $556.76 in one recent year. The least expensive city is Manchester, New Hampshire with an average of $183.00, according to Zippia. As you see, cost of living can really make a difference. Other expensive states include Florida, Nevada, and Washington, while less expensive states include Iowa, Michigan, and Wisconsin.

In addition to groceries, one’s overall monthly bill for food can include any snacks and meals eaten out. The averages below are based on an individual or family cooking all their meals and snacks at home, they don’t include meals eaten out. Averages look at foods many people commonly purchase, such as eggs, dairy, meat, bread, and produce items.

Here are some numbers from a recent Bureau of Labor Statistics report:

Buying Groceries vs Dining Out

It’s up to each individual and family to decide how often to eat out or get takeout food and how much of their money to spend on dining at restaurants. In general, eating out tends to cost more than cooking at home, and it’s a good idea to keep track of and budget for or it can add up quickly.

Recent Bureau of Labor Statistics data suggests the average American spends as much as $300 a month on food outside the home, which is a significant number when budgeting. That doesn’t mean it’s the right number; just an average.

Another suggestion by many financial experts is that food costs (meaning groceries and food outside the home) account for no more than 10% to 15% of one’s take-home pay, regardless of which type of budget method you use.

Recommended: Does Net Worth Include Home Equity?

9 Tips for Reducing Your Grocery Bill

In looking at the average grocery bills above, one might start to think that they are spending too much on groceries, if they didn’t already feel that way before. Here are a few tips for lowering one’s monthly grocery bill.

1. Make a Budget and Plan Ahead

Allocating funds for groceries in a monthly budget planner then making a plan for what to buy can help reduce one’s grocery bill. Meal planning and shopping lists can help you stick with your budget.

2. Look for Discounts and Sales

There are many discount apps and coupons available for those who are grocery shopping on a budget. They are free and can help with reducing one’s grocery bill. However, some coupons can be tricky and actually cause additional spending, if they ask one to purchase two or more of an item to get the discount or they result in buying an item that wouldn’t have been purchased otherwise. Some stores also have sale days, especially after a big holiday, so those can be good days to go shopping.

3. Don’t Shop on an Empty Stomach

Avoiding impulse buying is another way to reduce one’s grocery bill. Studies have shown that shopping on an empty stomach leads shoppers to spend more and to buy high calorie foods that may be less healthy.

4. Consider Meal Kits

Although meal kit services may appear expensive, and some are, if they reduce the amount that one eats out at restaurants or the amount spent on groceries, that is a plus. Meal kits provide pre-portioned meals, so they prevent buying extra ingredients that go to waste.

5. Pay Attention to Delivery Fees

Having groceries delivered can be a great way to save time, and since it can help with sticking to a plan and grocery list, it can also help prevent impulse buys. However, delivery fees and tips can add up, so it’s important to factor those into monthly budgeting.

6. Shop at a Different Store

It can be easy to fall into a pattern of shopping at a certain grocery store due to convenience or their offering of foods one likes. But if that store has higher prices, it may be worth considering going to a different store for some or all of one’s groceries.

7. Create a Routine

Another way to stay on top of grocery budgeting is to create routines. This can help with sticking to a shopping list and making sure extra food doesn’t get purchased. Habits like these can help you avoid impulse buying or purchasing food that winds up going to waste.

8. Buy Generic Brands instead of Name Brands

Many stores carry their own brands of food that are cheaper than big name brands. These items are very similar in taste and quality but have a lower price point. This can hold true at wholesale clubs, too, further increasing how much you can save.

9. Shop More Often

It may seem surprising, but going to the grocery store more often can help people spend less money than if they go on mega runs. The reason is that it avoids food waste because it’s easier to think about what will be eaten within the next few days than the next couple weeks.

Recommended: Building a Line Item Budget

The Takeaway

Since there is more flexibility in buying groceries than other expenses such as rent and other bills, cutting back on grocery spending can be a great way to save. If you’re looking to start making a budget, setting savings goals, or paying off debts, you might benefit from a money tracker tool.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How much should you be spending on groceries a week?

According to the USDA’s food plans, a couple could spend between $92 to $183 per month, depending on which food plan they follow, ranging from Thrifty to Liberal.

What is the average cost of groceries per month?

One recent study put the average cost of groceries per month at $475.25, put of course much will depend on household size, age of household members, location, and eating style.

What are examples of popular discount grocery stores?

Popular discount grocery stores include Walmart, Aldi, Sam’s Club, and Trader Joe’s.

Photo credit: iStock/andresr

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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A demand deposit account (DDA) is a type of bank account that is payable on demand. In other words, you can withdraw funds whenever you like. The most recognizable type of demand deposit account is a checking account. That’s right: You probably already have a demand deposit account and didn’t even know it.

While some personal finance sites and experts may conversationally refer to savings accounts as demand deposit accounts, there are key differences that actually keep savings accounts from qualifying as a DDA.

What Is a Demand Deposit Account?

The Federal Reserve categorizes demand deposit accounts as those that “are payable on demand, or a deposit issued with an original maturity or required notice period of less than seven days, or a deposit representing funds for which the depository institution does not reserve the right to require at least seven days’ written notice of intended withdrawal.”

To break it down more simply, demand deposit accounts:

•   Don’t have a maturity period.

•   Allow you to access your funds without notice (or less than seven days’ notice).

•   Can earn interest, like a high-yield checking account, depending on the financial institution.

•   Cannot limit the number of withdrawals or transfers you can make.

Because checking accounts do not mature and give you immediate access to your funds (for example, through check writing, debit cards, and ATM withdrawals), these qualify as demand deposit accounts.

What Isn’t a Demand Deposit Account?

Checking accounts are a common type of DDA, but what about other types of bank accounts, like savings accounts, money market accounts, and certificates of deposit?

Savings Deposits

Some people consider savings accounts to be DDAs, but there’s a difference to note. The Federal Reserve’s Regulation D (Reg D) previously limited savings account withdrawals to six per month. In response to COVID-19, the Federal Reserve removed this requirement.

Even though the Federal Reserve has eliminated the six withdrawal limit requirement, savings accounts still do not technically qualify as a demand deposit. Because banks have the right to require at least seven days’ written notice for withdrawals on funds in savings accounts, the government instead classifies savings accounts (and money market accounts) as savings deposits.

However, consumers can typically access their savings funds without a required waiting period, so they can often utilize their savings accounts as if they were demand deposit accounts. A bonus is that savings accounts are usually interest-bearing accounts.

Just note that many banks still impose a monthly withdrawal limit, despite Federal Reserve changes, so you may wind up getting hit with fees if you make frequent withdrawals.

Time Deposits

Certificates of Deposit (CDs), which have pre-set dates of maturity, are even less like demand deposits. A CD is a time deposit (sometimes called term deposit). They have set maturity dates and are subject to early withdrawal fees, meaning the funds are less liquid than a checking or savings account. Time deposits can be transferable or nontransferable and negotiable or nonnegotiable. In addition to CDs, time deposits can include club accounts (like Christmas and vacation club accounts).

A bit more on how CDs work: Essentially, you, the account holder, commit to having your funds on deposit with a bank for a set period of time. Break that agreement, and you may pay penalties.

How Demand Deposits Work

Demand deposit accounts are designed for on-demand access to your funds. Thus, you should be able to withdraw money to cover purchases at any time.

If your demand deposit account is a traditional checking account, you can spend your money with a debit card, checkbook, transfers, or even peer-to-peer payment apps. Each bank will have its own terms and conditions, but some accounts may pay interest, some may charge fees, and some may grant you fee-free access at certain ATMs, so you can grab your money on the go. Research various accounts carefully before selecting a bank or credit union. This involves reading the fine print, but it’s important as it can help you avoid misunderstandings and various fees.

Types of Demand Deposit Accounts

Checking accounts may be the most obvious type of demand deposit account. Some savings accounts can be accessed on demand these days, as outlined above, but many still have restrictions regarding how often you can make withdrawals.

Money market accounts occupy a kind of middle ground: Some specialists classify them as demand deposit accounts, but others do not.

How to Open a Demand Deposit Account

Opening a demand deposit account is equivalent to opening a checking account. Each financial institution will have its own processes for opening a bank account. Typically, you will need a government-issued photo ID, proof of your current residence (a utility bill, for instance), and often an opening deposit to initiate the account. Many banks allow you to complete this process quickly and easily online.

Advantages of Demand Deposit Accounts

Demand deposit accounts offer multiple benefits to consumers:

•   Easy and immediate access to funds: Whether through check writing, an ATM, or the swipe of a debit card, a demand deposit account enables consumers to spend their money as they see fit.

•   FDIC and NCUA insurance: Demand deposit accounts at banks are typically insured by the FDIC for up to $250,000; those held at credit unions are usually insured by the NCUA for the same amount. FDIC and NCUA insurance makes demand deposits safer than cash in your wallet or under the mattress.

•   Interest: Demand deposit accounts can be interest-bearing. The national average APY for checking accounts, according to the FDIC, is currently 0.08%. You can shop around for better returns (over 3.00% APY on some high-yield checking accounts, for instance), largely at online banks. Because these don’t have the expense of bricks-and-mortar locations, they can pass those savings onto their clients.

Disadvantages of Demand Deposit Accounts

Consumers may find some drawbacks to demand deposit accounts as well:

•   Low earnings: Demand deposit accounts are not required to pay interest. While consumers have easy access to their funds, they may be trading away higher earning opportunities they might find with a high-interest savings account, time deposits, or even investments in stocks and bonds.

•   Fees: Some demand deposits accounts charge fees, including monthly maintenance fees. Others require minimum balances that some consumers might not want to keep in the account.

The Takeaway

Demand deposit accounts are a type of bank account that give you immediate access to your funds. Checking accounts are the most common type of DDA. With these, you can withdraw money at will, by check, debit card, ATM, bank transfer, or P2P platforms. Demand deposit accounts are often the foundation of an individual’s financial life, allowing them to spend and manage their money seamlessly.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Is a DDA number the same as an account number?

A DDA (or demand deposit account) number is typically the same as your checking account number.

What is a personal DDA deposit?

You can fund your DDA directly with transfers from other accounts, check deposits (mobile, in-person, or ATM), or cash deposits. These are all types of personal DDA deposits.

Is a DDA account a checking account?

In most cases, a DDA account is a checking account. There is some debate about whether other types of accounts, such as a money market account, also qualify as a DDA.

What does DDA mean on a bank statement?

DDA stands for demand deposit account, which indicates that funds in the account are immediately available to the account holder.

Photo credit: iStock/jacoblund

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

4.00% APY
SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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