Where do you keep your emergency fund?

[wallet]

I keep my $1000 emergency fund in cash / savings for the unexpected things that might happen where I need quick cash. My larger emergency fund I'm just beginning to build and I'm not sure where i should keep it. This is the 3 - 6 months living expenses emergency fund. As I build this fund, where should I keep it? Where does everyone keep their emergency funds?

[disneysteve]

Keep it somewhere liquid but not so accessible that you'll be tempted to dip into it for stupid stuff. Generally, a money market account is the way to go. Don't worry too much about the interest rate. They are all pretty lousy. If you can get 0.8% you're doing well. Ally and Capitol One (formerly ING) are popular choices.

[bjl584]

I keep the majority of it in my savings account. I also keep some cash in my house in my safe.

[GREENBACK]

I've used Capital One (Formerly ING) for several years and it's been a good place for emergency funds. The times when I've needed cash took about two or three days to transfer to my checking account. Customer service is good and their website is easy to navigate.

[kork13]

I take a layered approach to my emergency fund, keeping it in a few places that I can progressively access as I might need to.

Initially: 3x Credit cards, each with available credit above $10k. Obviously this is not a long term solution, but by charging anything crazy that happens, I am able to ride the grace period until I can get the cash from my REAL emergency fund to pay off the expenses (in full & on time).

EF Layer #1: $1000 minimum balance in my checking account, plus free overdraft protection via $200 in a savings account with the same bank. This allows me to immediately cover anything minor that might crop up unexpectedly.
#2: 2 months' worth of expenses in an Ally online savings account. Separate enough to keep me from messing with it needlessly, but accessible enough that I can get at the funds there within 24-48 hours.
#3: 4 months' expenses in federal I-Bonds. This gives me total security, inflation protection, and double the return of my Ally account. However, since I've had them for over a year, I can cash any of them in at any time within 7 days. Eventually (once their rates improve somewhat), I actually want to move a larger portion of my EF into I-Bonds.
#4: Anything that somehow exhausts my entire EF is obviously a critical situation, so at that point, just about everything is on the table. My first stop would be my taxable investments, which currently have over 2 years' worth of expenses if truly necessary.

One caveat is that my retirement accounts (yes, to include my Roth IRA) are considered untouchable IMO. They're protected under bankruptcy laws, so I would sooner claim bankruptcy than demolish my retirement accounts.

[shaggy]

Mine is spread over 2 checking accounts and 1 money market account. I like having access to parts of it at different ATMs.

I personally don't need to have it "inaccessible" -- the whole point of an EF is that I can get to it in an emergency.

[parafly]

30% in primary bank savings account paying 0.08% interest.
70% in online savings account paying 0.75% interest.

This breakdown gives me the flexibility for an immediate cash withdrawal in case of emergency while maintaining most of my emergency fund in an account which is tougher to access and requires a two day transfer period.

[moneysma]

I keep 2-3 months worth of expenses in an online savings account (Capital One, previously ING Direct) and then an additional 3-5 months worth in short-term bonds. The cash is there so I can get at it quickly whereas the bonds provide me access in a few days. Of course, I am comfortable with losing a little bit of this should short-term bonds fall in value.

[debtfreeme]

emergency fund

Emergency cash for an event like katrina or because I need to evacuate kept in home safe.

Emergency fnd of 3 months expenses kept online at ING.

Emergency fund of 6 months kept at local credit union without debit or checking access. I have to drive to my home town to access.

[feh]

Ally online savings account.

Although my concept of EF has morphed over the last couple years. This account is primarily used for occasional large expenses (property taxes, home projects, IRA contributions). If I needed a large amount of money in a true emergency, I have other resources like I-bonds and Roth IRAs that could be accessed.

[disneysteve]

Although my concept of EF has morphed over the last couple years. This account is primarily used for occasional large expenses (property taxes, home projects, IRA contributions). If I needed a large amount of money in a true emergency, I have other resources like I-bonds and Roth IRAs that could be accessed.

This is pretty much where I am too. I think the basic concept of an EF is primarily targeted at folks who are just starting out. If you are older and more established and have substantial personal wealth, the EF really isn't that important in my opinion. If I needed money due to a job loss or medical emergency, I have plenty of investments that I could tap into. It might take a few days or a week or so to get the money but I can't think of any emergency that would require me to have a large amount of cash instantly. I have credit cards with nearly $100,000 in available credit. That should be sufficient for anything that could possibly happen until I can liquidate other holdings.

[BMEPhDinCO]

Right now, the bulk of my EF is in an Ally account (0.84% interest) with $1,000 in a savings account connected to checking (ie, instant access), a $100 "oops went over on spending" in my checking account, some cash in the house, and a year's worth of expenses available in CC limits.

I like the ibond idea mentioned, but right now, rates are 1.18% with 3 months interest lost if you pull out before 5 years and compounded semi-annual. With Ally's 5 year CD yielding 1.50% interest and 2 months lost pulling out before 5 years, why wouldn't that be the better idea?

[feh]

I like the ibond idea mentioned, but right now, rates are 1.18% with 3 months interest lost if you pull out before 5 years and compounded semi-annual. With Ally's 5 year CD yielding 1.50% interest and 2 months lost pulling out before 5 years, why wouldn't that be the better idea?

The interest rate on the I-bond changes with inflation.

[cypher1]

Main banking is with a CU, but further away, so I keep an extra 1 month EF in my savings. If I need quick cashflow I tap into US Bank account which keeps about 2 months expenses saved. Otherwise the majority of my EF is in Capital One.

[kork13]

I like the ibond idea mentioned, but right now, rates are 1.18% with 3 months interest lost if you pull out before 5 years and compounded semi-annual. With Ally's 5 year CD yielding 1.50% interest and 2 months lost pulling out before 5 years, why wouldn't that be the better idea?

The interest rate on the I-bond changes with inflation.

In addition to the automatic inflation protection, I bought my I-Bonds about 3 years ago, before the fixed rate component dropped to 0.0%... Back then it was at least 0.2%-0.3%, so most of my I-Bonds are currently earning between 1.48%-2.06%. Another benefit is that the earnings are tax-deferred, so I don't owe taxes on my earnings until I actually cash them out. And considering that I-Bonds continue to earn that inflation-adjusted interest for 30 years, that's a pretty good deal IMO.