What do you do with your emergency fund?

[ThunderCats]

I'm just curious... Right now, I keep an emergency fund in a savings account separate from our other investments so it's immediately available if we should ever need it.  It's enough to sustain us for 6 months at our current spending level.  But I look at it there, earning it's measly little 0.25% interest, and wonder if there's a better option for allowing it to earn some income with low/no risk, while being quickly available.  I looked at CD's, but their low interest rates just make me think "what's the point?" (Right now, my credit union's best CD is a 5 year with 0.5% interest).

So I'm just curious what other people do.  If you keep a separated emergency fund, what do you do with it?

[Another Reader]

Go on-line to www.depositaccounts.com and look at savings and money market accounts.  You should get 1.05 percent at Synchrony and Goldman Sachs bank now.  Ally pays 1.0 percent but has a free interest bearing checking account.  The BBVA money market is paying 1.10 percent with a minimum of $10,000.  One year CD's are paying around 1.25 percent.  You could also consider some longer term CD's and calculate the yield if you closed the CD's early for the emergency if/when it happens.

[czr]

Yeah, I agree with keeping the emergency dollars in the FDIC savings accounts. Just keep it liquid and simple and don't chase every new 0.05% uptick at a new institution. It won't be worth your time or hassle.

[catccc]

right now most of our cash savings is parked at mysavingsdirect.com.  1%.  Not huge, but better than some other options.  It was 1.25% when I moved my money there about a year ago, but has since dropped.  I'm probably going to leave it for now, it's a bit of a hassle to move it for such marginal increases in interest.

[Dicey]

We have a savings and checking account at Mega-But-Reasonably-Pleasant-To-Deal-With-Bank. Our savings just sit there being savings. We have plenty of FIRE money invested elsewhere, so we consider this our emergency and/or opportunity fund. We don't even look at the interest amounts. So small, why bother.
This is part of the beautiful boring-ness that is FIRE. No hair-on-fire debt, no payments, BBOM highly diversified. Meh? Who cares if some of it isn't earning much, the rest of it is.

[Jim2001]

+1 for FDIC insured, readily available.  Current yield around 1%.

[jan62]

I keep mine in a separate account that pays me 2.8% interest for every month that I make a deposit but don't make a withdrawal. Its added motivation for me to really think it through before I touch it but its immediately available if I need it.

[Choices]

Ours is at a mega-bank down the street, which is more convenient to access than an online bank in a true emergency when cash or a cashier's check is needed. There's not much interest, but there are no account fees and they provide free notary, checks, and safe deposit box.

[frugaliknowit]

2 different "high yield" checking accounts; one pays 3.0%, the other 2.5%.  They require 12 and 10 debit card purchases per month and "e-statements" only.  This hack requires quite a bit of organization; if there's a spouse/partner involved it requires a lot of collaboration, so it's not a strategy for everyone. 

I found them at kasasa.com.

[RetiredAt63]

For questions like this mentioning your banking country would help.  Several Canadian banks have high interest accounts (BMO calls theirs a savings building account) with rules re deposits and withdrawals.

[biglawinvestor]

I keep mine in Vanguard LifeStrategy Conservative Growth Fund (VSCGX). I never really understood why people insist on keeping it in cash.

[wenchsenior]

I keep mine in Vanguard LifeStrategy Conservative Growth Fund (VSCGX). I never really understood why people insist on keeping it in cash.

I've got mine there as well. I admit that when the Brexit vote went through I was temporarily tempted to transfer some into my stock-heavy funds, but then I remembered "THIS IS MY EMERGENCY FUND. Stocks on sale DOES NOT equal emergency!" LOL.