Page 1 of 1

Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 3:28 pm
by ROOKIE_INVESTOR
Wife and I currently have a $20,000 emergency fund in a Credit Union savings account. Where would be the best place to allocate this money for it to grow and remain liquid if needed? Would a money market account be a prudent choice? Thank you.

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 3:38 pm
by runner3081
No penalty CD or cash in an online savings account.

Don't do anything else with it.

Also, you can search for emergency fund on the forum and see hundreds, if not, thousands of posts :)

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 3:41 pm
by TonyDAntonio
How about $10,000 in Ibonds for you and your wife?

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 3:48 pm
by sport
TonyDAntonio wrote: Thu Nov 09, 2017 3:41 pm How about $10,000 in Ibonds for you and your wife?
I bonds cannot be cashed during the first year. If someone wanted to use this for an E fund, they should stagger the purchases.

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 3:54 pm
by brad.clarkston
Leave it where it is.

I have $30k in a Ally account so I can get it right away (debit card) and then another $30k in a bond ladder.

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 4:03 pm
by ROOKIE_INVESTOR
What about $10,000 in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) and the other $10,000 in the money market?

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 4:08 pm
by Gill
ROOKIE_INVESTOR wrote: Thu Nov 09, 2017 4:03 pm What about $10,000 in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) other $10,000 in the money market?
Only if you're willing to have the fund decline in value.
Gill

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 4:12 pm
by sport
Vanguard Prime Money Market has a yield of 1.14%. If you are willing to have a little fluctuation in value, Vanguard Ultra Short Term Bond fund has a yield of 1.61%. Either would be a sensible choice for an E fund.

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 6:29 pm
by eye.surgeon
Ally savings currently yields 1.25% and a no-penalty 11 month CD that can be instantly cashed is 1.5%.

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 6:43 pm
by coincollector
You can always go with a money market mutual fund or a short term Treasury ETF or mutual fund. The odd thing right now is that both these options are yielding no better than an online savings account. Hopefully as rates start to rise we'll see better returns.

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 7:14 pm
by Mr.BB
That money is for emergencies....not investing. I wouldn't put in anything risker than a CD or money market. It should be somewhere that you can access immediately. We keep ours at are credit union and it pays 1.16% Considering that is a checking account it pays almost as good as some CD's and I can get at the money anytime, with no penalty's.

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 8:19 pm
by arsenal_fan
Sorry to hijack this thread, but I too have some cash sitting around in a Wells Fargo account, close to $30000. Is an Ally savings account trustworthy enough to transfer all that money into?

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 8:26 pm
by spoonfork
Yes, Ally is FDIC insured up to 250,000 like normal banks. Many people here use it.

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 9:00 pm
by Perkunas
Ally no-penalty 11-month CD @ 1.5%

Live Oak Bank savings account 1.4%

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 9:32 pm
by aristotelian
arsenal_fan wrote: Thu Nov 09, 2017 8:19 pm Sorry to hijack this thread, but I too have some cash sitting around in a Wells Fargo account, close to $30000. Is an Ally savings account trustworthy enough to transfer all that money into?
I would trust Ally more than Wells Fargo.
http://fortune.com/2017/08/31/wells-far ... tim-sloan/

Re: Where to allocate a $20,000 emergency fund

Posted: Thu Nov 09, 2017 11:33 pm
by aj76er
FYI: I believe the Ally No penalty CD rate of 1.5% requires a minimum investment of 25k.

Re: Where to allocate a $20,000 emergency fund

Posted: Fri Nov 10, 2017 12:45 am
by mega317
All of the options presented here, with the exception of I bonds, yield within about 0.5% of each other. That's 100 bucks a year, taxable, for the OP. I recommend you do whatever you find most convenient and don't think about it again.

Re: Where to allocate a $20,000 emergency fund

Posted: Sat Nov 25, 2017 7:31 pm
by Lindawilliams1960
I have money in Alley earning 1.25%