If you have money that needs to be put into a short-term savings venue or an emergency fund, where should you save it? This is a question that I often see on message boards and blogs around the web. The frequency of this question prompted me to write the following post last week: Should You Use Gold and Silver as an Emergency Fund? This week I’m going to share some other places to put your savings.
Since I’m not a personal finance expert, more so an expert in my finances, I looked to the experts for advice. The staff over at the Motley Fool has a set of guidelines that we should ask ourselves when looking for a place to put our short-term savings. Basically, you need to examine the following issues: access, interest, service, and penalties.
The article then goes on to list the pros and cons of several different short-term savings outlets including checking accounts, savings accounts, high-yield bank accounts, money market deposit accounts, money market funds, CDs, and more.
Since this is a personal finance topic, the right answer for you may not be the right answer for your neighbor. I have my emergency fund split between two different savings accounts. One account I can access via my ATM card and the other is an internet-based bank and so it requires a 2-3 day transfer time.
I have chosen this because both are readily liquid however I have immediate access to a portion of this should an emergency occur that requires instant attention. For example, car problems while out of state on vacation. I certainly can’t wait 2-3 days for funds when I’m hundreds of miles from home!
So where do you keep your emergency fund?
Photo: jtyerse/Flickr
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