Where I need to keep my Emergency cash

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Wezzley77
Posts: 45
Joined: Wed Dec 06, 2017 7:17 pm
Location: Memphis, TN

Where I need to keep my Emergency cash

Post by Wezzley77 » Sat Dec 30, 2017 3:28 pm

I am currently building my emergency fund rather quickly fortunatly after becoming debt free (except mortgage). As of now its Cash in my safe at home. Looking to put in an account aside from saving in my bank. Is the Vanguard moneymarket accounts as good as any others? and i also see where there are a couple of different ones?

If there is something or somewhere better to go with my emergency fund i would like to know what you think. If Vanguard is just as good as anything else which account do i put it in specifically? thanks in advance for help!!

mortfree
Posts: 1320
Joined: Mon Sep 12, 2016 7:06 pm

Re: Where I need to keep my Emergency cash

Post by mortfree » Sat Dec 30, 2017 3:32 pm

Online savings/money market account.

Favorite one in here seems to be Ally.

There is also capital one 360 money market.

mega317
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Joined: Tue Apr 19, 2016 10:55 am

Re: Where I need to keep my Emergency cash

Post by mega317 » Sat Dec 30, 2017 3:34 pm

Money market funds are not FDIC insured. I would feel comfortable leaving money in a sound one though

Why not a bank?

Wezzley77
Posts: 45
Joined: Wed Dec 06, 2017 7:17 pm
Location: Memphis, TN

Re: Where I need to keep my Emergency cash

Post by Wezzley77 » Sat Dec 30, 2017 3:42 pm

Why not a bank is exactly why im asking i guess. Im assuming that a money market can get you a slightly better return on money. My plan is to park the cash there for what I hope is a considerable amount of time and not need to dip into it for an emergency, at least not alot of it. Can you get just as good of a return at a bank?

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fortfun
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Re: Where I need to keep my Emergency cash

Post by fortfun » Sat Dec 30, 2017 3:45 pm

Ally has an 11 month no penalty CD at 1.75%. That's where my emergency money is parked at the moment. You can't take it out for 6 days but besides that it seems pretty fluid.

mortfree
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Re: Where I need to keep my Emergency cash

Post by mortfree » Sat Dec 30, 2017 3:46 pm

mega317 wrote:
Sat Dec 30, 2017 3:34 pm
Money market funds are not FDIC insured. I would feel comfortable leaving money in a sound one though

Why not a bank?
Did you mean money market at Vanguard?

CapOne is FDIC

intothegreatunknown
Posts: 24
Joined: Tue Dec 09, 2014 1:02 am
Location: California

Re: Where I need to keep my Emergency cash

Post by intothegreatunknown » Sat Dec 30, 2017 3:50 pm

I keep mine partly in a bank account and mostly in I bonds. I’m a big fan of I bonds because they track inflation and they can be held for a long time so they’re low maintenance.

Gray
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Joined: Sat Apr 16, 2011 5:33 am

Re: Where I need to keep my Emergency cash

Post by Gray » Sat Dec 30, 2017 3:53 pm

I used Everbank until I discovered Ally 7 years ago.

Ally money market accounts are FDIC insured.
https://www.ally.com/bank/money-market-account/

I use Ally for reserve, my personal escrow account for taxes, etc. I can pay taxes right from that account, etc.

Investment money market funds (unlike Bank money market accounts—like Ally) are not FDIC insured and therefore have risk.

This is an example of a money market fund:
https://personal.vanguard.com/us/funds/ ... irect=true

Other info
https://www.investopedia.com/ask/answer ... rities.asp

HenrySouthernCal
Posts: 31
Joined: Thu Dec 21, 2017 11:33 pm

Re: Where I need to keep my Emergency cash

Post by HenrySouthernCal » Sat Dec 30, 2017 4:39 pm

Wezzley77 wrote:
Sat Dec 30, 2017 3:28 pm
I am currently building my emergency fund rather quickly fortunatly after becoming debt free (except mortgage). As of now its Cash in my safe at home. Looking to put in an account aside from saving in my bank. Is the Vanguard moneymarket accounts as good as any others? and i also see where there are a couple of different ones?

If there is something or somewhere better to go with my emergency fund i would like to know what you think. If Vanguard is just as good as anything else which account do i put it in specifically? thanks in advance for help!!
Vanguard Federal Money Market or Prime Money Market are not that great. But I would recommend Vanguard Muni Money Market of your state. I put some emergence money in Vanguard CA Muni MM, and the yield is now at 1.22% and it is tax free.

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birdog
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Re: Where I need to keep my Emergency cash

Post by birdog » Sat Dec 30, 2017 4:52 pm

I use a savings account with Alliant Credit Union. Their interest rates are always the same as or a bit better than Ally.

Wezzley77
Posts: 45
Joined: Wed Dec 06, 2017 7:17 pm
Location: Memphis, TN

Re: Where I need to keep my Emergency cash

Post by Wezzley77 » Sat Dec 30, 2017 5:31 pm

Gray wrote:
Sat Dec 30, 2017 3:53 pm
I used Everbank until I discovered Ally 7 years ago.

Ally money market accounts are FDIC insured.
https://www.ally.com/bank/money-market-account/

I use Ally for reserve, my personal escrow account for taxes, etc. I can pay taxes right from that account, etc.

Investment money market funds (unlike Bank money market accounts—like Ally) are not FDIC insured and therefore have risk.

This is an example of a money market fund:
https://personal.vanguard.com/us/funds/ ... irect=true

Other info
https://www.investopedia.com/ask/answer ... rities.asp
Thanks for the response and the links!

Wezzley77
Posts: 45
Joined: Wed Dec 06, 2017 7:17 pm
Location: Memphis, TN

Re: Where I need to keep my Emergency cash

Post by Wezzley77 » Sat Dec 30, 2017 5:32 pm

Thanks for the replys everyone. I appreciate the help and will look into them all!

aquifer
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Re: Where I need to keep my Emergency cash

Post by aquifer » Sat Dec 30, 2017 9:01 pm

I keep about 60% in a regular money market ACCOUNT in a bank. I keep the other 40% in Vanguard's prime money market FUND. The bank account is FDIC insured, while the fund is not, as others have mentioned. I realize I could open an online account and probably get a rate comparable to the MMF, plus FDIC insurance, but I'm comfortable with my choice. I like the convenience having everything at Vanguard, and I think the fund is safe enough for my needs.

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

Re: Where I need to keep my Emergency cash

Post by ThePrince » Sat Dec 30, 2017 9:09 pm

Wezzley77 wrote:
Sat Dec 30, 2017 5:32 pm
Thanks for the replys everyone. I appreciate the help and will look into them all!
Check out Barclays too. Their savings account rate is generally higher than Ally’s.

BigPrince
Posts: 175
Joined: Sun Jul 06, 2014 2:51 pm

Re: Where I need to keep my Emergency cash

Post by BigPrince » Sat Dec 30, 2017 9:13 pm

https://personal.vanguard.com/us/funds/ ... true#tab=0

Is it odd that the NAV is not 1.0000 but .9999?

aquifer
Posts: 320
Joined: Sat Oct 20, 2012 9:01 am

Re: Where I need to keep my Emergency cash

Post by aquifer » Sat Dec 30, 2017 9:18 pm

BigPrince wrote:
Sat Dec 30, 2017 9:13 pm
https://personal.vanguard.com/us/funds/ ... true#tab=0

Is it odd that the NAV is not 1.0000 but .9999?
It “broke the buck”! Time to panic! :D

BigPrince
Posts: 175
Joined: Sun Jul 06, 2014 2:51 pm

Re: Where I need to keep my Emergency cash

Post by BigPrince » Sat Dec 30, 2017 9:24 pm

aquifer wrote:
Sat Dec 30, 2017 9:18 pm
BigPrince wrote:
Sat Dec 30, 2017 9:13 pm
https://personal.vanguard.com/us/funds/ ... true#tab=0

Is it odd that the NAV is not 1.0000 but .9999?
It “broke the buck”! Time to panic! :D
...lol I'm not panicking but that was exactly my thought!

keaton
Posts: 111
Joined: Wed Nov 11, 2015 5:24 pm

Re: Where I need to keep my Emergency cash

Post by keaton » Sat Dec 30, 2017 9:38 pm

My vote is Ally, great bank! The 11m no penalty or the 12m at 2% with penalty.

There might be better offers that come and go, but having Ally as my primary bank has been excellent. Keep it simple is the key...

All autopay
Ally savings (1.25%)-->CC bill (2%)-->All POS and Bills

Easy!

TravelforFun
Posts: 1552
Joined: Tue Dec 04, 2012 11:05 pm

Re: Where I need to keep my Emergency cash

Post by TravelforFun » Sat Dec 30, 2017 9:46 pm

I don't have an emergency fund which is defined as 3 - 6 months of expenses. I have a few thousands in a checking account. If emergency arises, I'd use my credit cards to take care of it then pay off the balance when the bill comes by liquidating some bonds.

Is it really necessary to have an emergency fund?

TravelforFun

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Clever_Username
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Location: Southern California

Re: Where I need to keep my Emergency cash

Post by Clever_Username » Sat Dec 30, 2017 10:02 pm

My cash reserves at the moment are 1.5 months in the bank and 1.5 months in a money market at Vanguard. I have enough liquid and semi-liquid things I can draw on if needed (muni bonds, iBonds, etc) that I don't see the need to keep more than three months' expenses in cash, and even then I think that may be on the excessive / drag side.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_

UpperNwGuy
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Joined: Sun Oct 08, 2017 7:16 pm

Re: Where I need to keep my Emergency cash

Post by UpperNwGuy » Sat Dec 30, 2017 10:50 pm

TravelforFun wrote:
Sat Dec 30, 2017 9:46 pm
I don't have an emergency fund which is defined as 3 - 6 months of expenses. I have a few thousands in a checking account. If emergency arises, I'd use my credit cards to take care of it then pay off the balance when the bill comes by liquidating some bonds.

Is it really necessary to have an emergency fund?

TravelforFun
My answer would be no. In my opinion, if a person has a robust investment portfolio, they don’t need a separate emergency fund. Emergency funds have lower returns than investment portfolios. Why not simply invest the money and get the higher return?

OldSport
Posts: 311
Joined: Tue Jul 25, 2017 7:01 pm

Re: Where I need to keep my Emergency cash

Post by OldSport » Sat Dec 30, 2017 11:06 pm

I keep a multi-tiered emergency fund:
- 1 month expenses as cushion in checking account, so the account should have at least 1 month expenses at its lowest point every month.
- 3 months expenses in Vanguard prime money market
- 3 months expenses in Vanguard short term investment grade
- 6 months expenses in Vanguard Wellesley

Wezzley77
Posts: 45
Joined: Wed Dec 06, 2017 7:17 pm
Location: Memphis, TN

Re: Where I need to keep my Emergency cash

Post by Wezzley77 » Sun Dec 31, 2017 9:28 am

Great responses! Aside from where to keep emergency funds stored it’s interesting in the takes or opinions on how much emergency fund to really have! I’m trying to go by the book and get 3-6 months stashed. I find myself thinking wow that’s a lot of cash, bet it seems to be the status quo. My initial thoughts are that 3-5k is enough of (untouchable) emergency money to be aside unless a real big emergency came up which would be a very unfortunate situation such as job loss or major health problem. Then again I guess why it’s recommended that much be set aside. Everybody’s situation different.

Jeep512
Posts: 39
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Re: Where I need to keep my Emergency cash

Post by Jeep512 » Sun Dec 31, 2017 9:41 am

I keep about 2-3 of months expenses in a local savings account. Probably too much, but it makes me comfortable.

I use an online savings account for the remainder of my emergency fund. Formerly Discover, but now Capital One (switched to get bonus $200).

One concern is slow transfers. It seems like the transfers into/out of Discover all took a week or so. Very slow, IMO. I haven't done any transfers with C One, so I can't comment on them yet. In most situations, a 5 business day transfer time shouldn't be a problem.

reimann
Posts: 44
Joined: Thu Mar 30, 2017 9:31 pm

Re: Where I need to keep my Emergency cash

Post by reimann » Sun Dec 31, 2017 10:07 am

I never kept and emergency fund but I'm a high earner and have had sufficient investments. However I'm planning to retire in about 2 years so I've been slowly accumulating cash so that when I retire I have more options depending on what the market is doing. I hope to have at least a year of living expenses in cash when I retire. I've been putting it in the Schwab Municipal MMF (Tax-exempt).

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