SURVEY: Where Do You Stash Your Emergency Fund

[feh]

Ever since I have been a member of this Forum though my different financial situations I have struggled to form an EF. But now I finally got one going pretty solid. But I though the whole reason of the EF was to have the money Immediate and next to as liquid as possible (in a bank/brokerage accnt) and Not in bond funds, roths or other taxvehicles, or stocks. And it seems the majority of you are only keeping 1-4k ready in an account and the remainder in vehicles or stock that would not consider it fairly liquid. You all have really suprised me.

Mine is in an online bank mainly @.85%, but its only about 1/3 of what its suppose to be yet, and i keep always 1+ months bills in my regular checking/savings.

our entire EF is in an online savings acct - about 8 months worth of living expenses.

[kork13]

My EF is 5 months' expenses, which is my particular situation, is sufficient. I keep a $1k buffer in my checking account (earning just .05% interest -- laughable, really) for month-to-month variations and unanticipated expenses, $6k in an online savings account (1.1% interest) for most "minor" emergencies, and the rest in federal I-Bonds (currently between 3.1%-4.9% interest).

As you can see, I use a "tiered" approach to my EF, which I actually started using on recommendation from these boards. Most "emergencies" are small, occur infrequently, and I'm able to replace the money within a short period of time (if I use any of the $6k, replacing it becomes priority #1). So I have cash accounts to cover those small things. For all the rest, I-Bonds are great. At this point (after owning them for 1yr), I can cash them in at any time for only a minor interest penalty. After 5 years of owning them, the penalty goes away entirely. So the tiered approach offers security, but still provides decent returns on my money.

Besides, this way I've got my name on a (very very very very very very) small share of the federal debt.

[amarowsky]

Not a single response has mentioned keeping the EF in stocks so I'm not quite sure what you are referring to.

As for liquidity, that's a reasonable question. My feeling is that nothing would ever happen that would necessitate me having instant access to 6 months worth of expenses all at once. The main "emergency" that I feel our EF prepares us for is me losing my job. If that were to happen, I would need my EF to replace my income for however long I was out of work (last time was about 3 months and that was nearly 12 years ago). As long as I had some readily accessible money for day to day stuff, I'd have plenty of time to cash in an I bond or make a withdrawal from my brokerage account or whatever else I needed to do to keep the money flowing.

And there are always credit cards that can be used if I needed to cover a big expense urgently and didn't have the cash on hand for some reason. Between our 4 cards, we have nearly $100,000 in available credit. I can't imagine any emergency that would exceed that.

I shouldn't have said stocks, I meant stock in investments other than just an interest yielding bank . But I was more speaking about how I thought this forum as a whole itentified the criterion for an Ef. I thought here it was suppose to be all liquid and seperate . Since starting mine I never intended on keeping it all seperate and liquid. Lol I justthought I was going against the grain .

[acat29020]

reply

I just have mine in my savings accounts... and some in an IRA but i wouldn't consider that
"emergency" money.

[disneysteve]

I shouldn't have said stocks, I meant stock in investments other than just an interest yielding bank . But I was more speaking about how I thought this forum as a whole itentified the criterion for an Ef. I thought here it was suppose to be all liquid and seperate . Since starting mine I never intended on keeping it all seperate and liquid. Lol I justthought I was going against the grain .

I see nothing wrong with having part of the EF in a safe vehicle that can't lose principal value. That could be a CD, savings bonds, money market account, etc. I'm not such a fan of a bond fund, which some people do use, because those can lose value.

As for "liquid", to me that doesn't mean I can get to all of it instantly. As long as I can access it quickly and with little to no penalty, that's liquid enough. I wouldn't want my EF to be the equity I have in a rental property, for example, because accessing it would mean either taking out a loan against that value or selling the property, either of which could be difficult or impossible depending on circumstances.

[Cassius King]

I have several and they're spread out. I have a $2k buffer I keep in my checking account. I also keep about $150-200 in cash in the house for emergencies. Then I have a ING account where the bulk of my EF resides.

This seems to work well for me and I'm comfortable with it.

[myrdale]

I keep my EF in a simple money market account at my local bank. At some point I will look into purchasing three or four CDs and space them out by 3 months each or so.

I am slowly building up my 401k, while I hope I never have to touch that, it does offer some additional comfort.

Other than that I keep about $2k in my checking account for living expenses and about $100 in my glove box for an emergency.

[snafu]

We keep $200. cash in the house because in a local emergency [like fires in Reno] they turn off electricity and bank machines are either non functioning or out of money; credit cards can't be accessed either. The buffer in our chequing account gives us free services but could be accessed PDQ if necessary. There can be up to $ 7,000. in a linked saving account in anticipation of a planned major purchase, investment, or bill like Income tax.

A funeral required a flight and ticket were charged to CC. I was able to pay it when due so didn't use EF. [does anyone use cash for airline tickets] I have an ETF Index a/c I would use if needed in emergency. We can access investment funds in 2 business days. I can't visualize an emergency that would need huge, liquid sums in less than two business days.

[feh]

our entire EF is in an online savings acct - about 8 months worth of living expenses.

Update - was chatting (electronically) w/ my financial adviser today and this topic came up. He let me know that given the cash position of our investment accounts and other assets (ie. municipal bond fund) that could be easily and quickly liquidated, it didn't make any sense for us to have a separate emergency fund.

Thus, I'll shortly be one of those folks that uses an investment account as a source of emergency funds.

[dawnwes]

We have a Fidelity Brokerage account for our EF. We have several other accounts (IRAs and such), but this is accessible immediately should we need it. We also have some in our savings account at the bank for a 2nd EF.

Dawn

[Gina23]

I have about $2k in my checking available immediately.
20K is in a MMMF.
10K is in an intermediate term bond fund.

The 10K I like to play around with a bit depending on the market. It is my "car fund" that I hope to just make a bit on each year until I pay cash for a car when mine goes to Pontiac heaven.

[mrpaseo]

Like has already been said, there isn't any "Savings" vehicles that are paying much more than 1%. We keep most of our EF in our primary Savings account. That said, if an emergency arises, the CC is the first thing that is pulled out. By the end of the month I transfer enough to pay off the CC in the event anything is charged.

That said, since we just fully funded our EF, it's time to start doing some research on better savings vehicles. I like the idea of having some in a savings account and the rest in a better percentage fund (Like a brokerage account).

Ray

[maat55]

I keep 15k in a checking account that pays 3.01% and a few k cash around the house.

[PMMM]

I keep 15k in a checking account that pays 3.01% and a few k cash around the house.

Please share the name of the bank with us. I know of no checking accounts anywhere that pays that rate. I'm sure there are many people on this board, myself included, that would like to take advantage of that rate and the bank would love a flood of deposits!

I keep a month of expenses in my interest bearing checking account and then the rest in CD's.

[kork13]

Please share the name of the bank with us. I know of no checking accounts anywhere that pays that rate. I'm sure there are many people on this board, myself included, that would like to take advantage of that rate and the bank would love a flood of deposits!

Consumers Credit Union (in Illinois) offers 4.01% on balances up to $10k, though it's got all of the (now-) standard transaction and other requirements. I don't use them, but saw reference to them recently.

ETA: Just because I was curious (and I'm addicted to numbers), I did some quick math... If you were to hold $30k in their checking account (and assuming you consistently meet all of their requirements), you'd end up with an effective rate of 1.67% APY...with $25k, effective rate of 1.94%; 20k = 2.34%; $15k = 3.0%. (Isn't math FUN?!? lol )