Where should I move my emergency fund $$?

[Jules13]

So, we've decided to move most of our emergency fund money.  It's currently sitting in an online savings account (not very high interest, but not as low as our credit union either). 

We've got $30k in there and I'm thinking we can lower that since we nearly always have quite a bit sitting in our other credit union savings accounts (car and travel savings) as well as have Roth IRA money to draw from or plenty of home equity (looking at applying for a HELOC to keep at zero balance). 

I'm considering either doing a sort of 401k 'swap', where I increase our 401k to max it out for the rest of this year and then use any of the emergency fund to make up for income we might need.  Or instead, move it to a vanguard or fidelity account (mutual fund?) so if we did need or want it, we could get at it. 

Any other ideas?

What would you do?  (other than keeping it in the current savings account)  Thanks!

[surfhb]

$30k is such a small amount compared to your overall net worth needed to become FI. 

Just leave it as is...it's meant to be used for extreme emergencies.   

Never could understand why folks think a lost investment return on a measly $30 grand (compared to you're FIRE number) will set you back. 

I say leave it and ramp up your savings and investing now that your EF Is set.   Good work btw


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[Valhalla]

If you no longer need emergency funds, then by all means invest it.

Emergency funds though, if needed for an emergency, should be as liquid as possible. 

[Goldielocks]

Following...

I have recently FIRED and now have about $70k that is to be used for emergency and spending over the next 1-3 years.
I hate not getting a better return on it than my savings account.  Debating about buying 1 year bonds with some of it.

[katsiki]

I would invest most of it since you have Roth accounts and plan to get a HELOC.

[TheAnonOne]

30k + savings + other liquid accounts for travel and car does seem high.

We just keep our checking account at 10k, at the end of the month, any extra is invested. Emergency cash is, that 10k, and presumably anything over that is not going to require CASH.

I useto have more (20k) but once our taxable account broke 6 figures, we felt like it was pointless to hold more cash.

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[Jules13]

What is the best vehicle for taxable investments if I move it?  Just a mutual fund of some sort at Fidelity or Vanguard?  We have our Roths and my rollover IRA (from previous work, I'm a SAHM now) at Fidelity, but people are always talking about Vanguard....

[Brother Esau]

What is the best vehicle for taxable investments if I move it?  Just a mutual fund of some sort at Fidelity or Vanguard?  We have our Roths and my rollover IRA (from previous work, I'm a SAHM now) at Fidelity, but people are always talking about Vanguard....

We have accounts with both Fidelity and Vanguard. I like having access to mutual funds from many different mutual fund families (beyond just Fidelity and Vanguard). The Vanguard index funds are highly regarded. We have shares in SP500, small-cap index and mid-cap index.

[Slinky]

Most unexpected expenses are handled in cash, but for a bigger Black Swan type crisis I have some money squirreled away in a bond fund in a taxable account at Vanguard. I set up check writing privileges with that as my alternative redemption fund so I can simply write a check if need be. Or cash out and transfer which is about as quick as transferring from an online account anyway.

[myhotrs]

To actually address the OP, Lake Michigan Credit Union has an easy 3% checking account. There are a fw hoops like you need a DD (or ACH) and some debit transactions every month, not difficult to meet. $15k limit per account, so one for each of you will give you $30k at 3%, not equity-like but not bad for risk-free these days.

[COEE]

I keep toying around with the idea of putting about half of my emergency fund in a TIPS fund.  I haven't yet been able to bite that bullet though.  My biggest concern is if I can't sell the shares if the economy tanks and I need the money due to job loss - those two things are likely to happen at the same time.

Something that I've realized is that in the not too distant future I won't be able to contribute any more to tax advantaged accounts.  At which point I'll be squirling cash into a taxable account.  That will then also grow to ridiculous proportions... and my cash reserves won't do much for me in that situation because I will have access to a large amount of cash reserves.