Emergency fund placement

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dcr1984
Posts: 35
Joined: Wed May 18, 2016 10:46 am

Emergency fund placement

Post by dcr1984 » Sun Jun 17, 2018 5:17 pm

Any recommendations on places to put part of your emergency fund to get at least some return? I have it all in a savings account currently for convenience but it’s getting <1%.

I understand people don’t get rich off their emergency fund return and convenience has some value but I figure I can do at least a little better than I am now. I was thinking of putting half of it in some CDs or I-bonds but was curious if anyone has any specific recommendations or thoughts?

Thanks!

HAWK23
Posts: 90
Joined: Sun Feb 25, 2018 3:59 pm

Re: Emergency fund placement

Post by HAWK23 » Sun Jun 17, 2018 5:33 pm

People will probably point you in the direction of Money Market Accounts with higher APY than savings accounts. I'll plug the one I use that currently has a 1.85% APY:

CIT Bank
(https://www.bankoncit.com/money-market-account)

It's FDIC insured and only has a $100 minimum. It has done the trick for me. There are plenty similar though that I'm sure others will mention for some different options.

ThePrince
Posts: 357
Joined: Sun Aug 20, 2017 9:15 pm
Location: U.S.A.

Re: Emergency fund placement

Post by ThePrince » Sun Jun 17, 2018 6:02 pm

VSBSX: Vanguard Short Term Treasury Index Admiral (ETF: VGSH). Present SEC Yield is 2.45%. ER= 0.07%.

Doctor Rhythm
Posts: 166
Joined: Mon Jan 22, 2018 3:55 am

Re: Emergency fund placement

Post by Doctor Rhythm » Sun Jun 17, 2018 6:18 pm

I'd be fine with a CD, even with longer maturities - you won't risk losing principal, just some of your interest. IBonds are the same way - you only lose 3 months interest for early withdrawal and it adjusts with inflation. Trouble with the latter is the relatively small amount you can buy per year, which might not cover your entire emergency fund.

I'd be more wary of bond funds or anything where you can lose principal if you have to cash in at the wrong time.

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