Best place for the ol' Emergency Fund

Writer@Large · #1 (**permalink**) 05-31-2006, 07:08 AM

I've got my $1,000 emergency fund currently sitting in a low-interest basic savings account, because I want to keep it easily accessible--IOW, if I need that money at 3am, I want to be able to log onto the CU's website and make that money transfer into my checking account or whatever by 3:05am ... without paying a transaction or early withdrawl fee.

I have noticed, however, several people around here and elsewhere mention that they're keeping their emergency fund with ING, a money market, or some other account. So I thought I'd toss the question out there:

Where are you keeping your emergency fund?

Do you have quick access to your funds?

Does your institution/account have a withdrawl fee, transaction fee, etc.?

Do you have to keep a minimum balance there?

Obviously, I'm shopping around for the most financially sound option, so all details are welcome!

--W@L

lillyb · #2 (**permalink**) 05-31-2006, 07:46 AM

Where are you keeping your emergency fund? ING. Well, I'm keeping $500 in ING and $500 in the checking account. I want to be able to get to some fast if needed, but didn't want all of my $1000 that easy to get to. Too many family with life crisis looking for handouts.

Do you have quick access to your funds? To the checking, yes. ING may take a few days, which is the way I like it.

Does your institution/account have a withdrawl fee, transaction fee, etc.? Nope.

Do you have to keep a minimum balance there? Nope.

Broken Arrow · #3 (**permalink**) 05-31-2006, 07:57 AM

I am tempted to keep mine in a high-interest online account, but for now, it's doing just fine in my credit union. Transfers are quick and easy, with no fees and very, very few restrictions.

parafly · #4 (**permalink**) 05-31-2006, 07:57 AM

I have an HSBC online savings account. It links directly to your checking account, but the transfers take a couple of days. If your funds are needed immediately, you can use the ATM card provided with the account. There are no fees and no minimum balance requirements. You can open an account with $1.

BTW, they have much better rates than ING.

cbmeeks · #5 (**permalink**) 05-31-2006, 08:39 AM

Well, if you have $1000 saved, I am assuming you are on DR's plan?

If that's the case, DR recommends keeping that $1000 in a place that is easily accessable but not so easy that you will be tempted to use it for non-emergencies. He also recommends not using the money for investing....it's for emergencies.

However, I don't see how putting it into a higher interest earning account could hurt as long as you can easily (withing a day) access the money and no big penalities for taking money out.

boefixepa · #6 (**permalink**) 05-31-2006, 08:57 AM

Also just a note....and I now those anti-cc people out there will role their eyes....but if you need the money this instant and it's in the online saving that gets a decent rate charge it, get the cash back reward, transfer the money before the bill's due and pay it off.

1. You have the CC with you generally - at least I do
2. You get another month of interest from the online place
3. You get the rewards or points
4. You don't have to stress...

At least I don't...That's what I do....so far no big emergency...but I do keep at least 2.5K in my checking so if I needed cash for some odd reason it's there....but I never carry cash.

CJsoccerchic · #7 (**permalink**) 05-31-2006, 09:00 AM

I didn't know that HSBC lets you get your online money thru a bank card....

cbmeeks · #8 (**permalink**) 05-31-2006, 09:07 AM

Quote:

Originally Posted by boefixepa

....and I now those anti-cc people out there will role their eyes....

fultron · #9 (**permalink**) 05-31-2006, 09:21 AM

Our emergency money is in a money market acct. It gets a better rate than a regular savings or checking account and is easily accessible.

sweeps · #10 (**permalink**) 05-31-2006, 09:23 AM

This is off-topic, but is $1000 really enough for an emergency fund? I know this is one of Dave Ramsey's preachings, but for me $1000 wouldn't get my family through 1 month of hard times, let alone 3 to 6.

By the way, my EF money is split between HSBC and GMAC.

cbmeeks · #11 (**permalink**) 05-31-2006, 09:31 AM

Quote:

Originally Posted by Sweepsplayer

This is off-topic, but is $1000 really enough for an emergency fund? I know this is one of Dave Ramsey's preachings, but for me $1000 wouldn't get my family through 1 month of hard times, let alone 3 to 6.

By the way, my EF money is split between HSBC and GMAC.

The $1000 is for most small emergencies. DR suggest starting with that amount because the average house needs $10k to $20k for 3-6 months and it would be difficult to save $20k while you are paying on CC's.

We just had a small emergency. Not a big one. We have to fix the gas sensor in our van. $600 bucks. I could use the emergency fund for that but we are going to try and just raise the cash since it's not critical (my wife can record mileage instead of using the gas-guage.)

So, $1000 will cover most small emergencies. It's a temp thing.

cbmeeks

sakigt · #12 (**permalink**) 05-31-2006, 10:11 AM

Once I build my fund back up (Im halfway there!) Ill be keeping it in my ING account. It takes a couple days to get so I can thinka about what Im spending the money on.

jmjj215 · #13 (**permalink**) 05-31-2006, 10:13 AM

I live on last month's income which simulates Dave's approach, though it's even more conservative than just having $1000. So that's my first line of defense against emergencies. The second is my 3-6 months' expenses sitting in ING.

Ima saver · #14 (**permalink**) 05-31-2006, 10:25 AM

Well, I started the first of the year with 100k in a local savings account paying over 4%. I also had 200K in another bank, this time in a money market account paying 3.9% I can get to my money 6 days a week, and I can always use the credit card if I need to pay something even quicker and then just pay it off. I have a $19,000 credit limit on one card, that should cover almost anything!

cbmeeks · #15 (**permalink**) 05-31-2006, 12:13 PM

Quote:

Originally Posted by Ima saver

I also had 200K in another bank, this time in a money market account paying 3.9%

Am I correct in assuming that is generating about $650/month for you for basically doing nothing?

Pretty sweet.

Do you put the interest back into the account or somewhere else?

Sorry to be so personal but if you are sharing wealth then I will ask...hehehe

thanks

cbmeeks

slimcustomer · #16 (**permalink**) 05-31-2006, 12:50 PM

I like I bonds. The availability of tax deferral makes tax time a breeze and the possible tax free use of them for a child's education is a bonus. Buying them regularly in your 30's will provide an inflation protected steady stream of income later on, providing you don't cash them in early.

BAGAGT1 · #17 (**permalink**) 05-31-2006, 07:07 PM

Where are you keeping your emergency fund? I keep one third of my EF in a Credit Union account. I keep a 2/3 in a Six month CD, I keep the last third in a one year CD.

Do you have quick access to your funds? Yes to the credit union, no to the others.

Does your institution/account have a withdrawl fee, transaction fee, etc.?
No withdrawal fee for the credit union, I would get hit with an early withdrawal fee for the CD's.

Do you have to keep a minimum balance there? Yes, $5 for the credit union, and 10K a piece for the CD's (to qualify for the best rate).

cbmeeks · #18 (**permalink**) 06-01-2006, 07:48 AM

Quote:

Originally Posted by BAGAGT1

Where are you keeping your emergency fund? I keep one third of my EF in a Credit Union account. I keep a 2/3 in a Six month CD, I keep the last third in a one year CD.

Do you have quick access to your funds? Yes to the credit union, no to the others.

Does your institution/account have a withdrawl fee, transaction fee, etc.?
No withdrawal fee for the credit union, I would get hit with an early withdrawal fee for the CD's.

Do you have to keep a minimum balance there? Yes, $5 for the credit union, and 10K a piece for the CD's (to qualify for the best rate).

I think you are on to something. That is what I am going to do (basically).

I am going to keep $1000 (or more) into a normal savings account that is linked to my checking account. I can get the money instantly, 24/7 and I don't have any fees if I only do it 4 times a year (the fee isn't that much either). Then, I will keep more into a 4.25% savings online and maybe some into a 5.25% CD for a year.

That way, I will have a good EF and still make a little interest without violating DR's rules too much. :-)

Bluezy · #19 (**permalink**) 06-02-2006, 12:33 AM

I keep the Emergency funds in three places - one portion in a high interest savings with RateEdge,com, another portion in a high interest CD (GTE CU) and the rest in a brick-and-mortar checking account (Bank of Tampa) keeping a higher balance. It seems to be working smoothly.

The bank I've chosen has very fast transfers with the credit unions (and vice versa) and all transactions appear instantly online when they occur.

JoyJoy · #20 (**permalink**) 06-02-2006, 08:22 PM

We keep our EF in HSBC as we're fortunate to have a branch within a mile of our home. We can withdraw/deposit only by using our ATM card. I have a small savings with my credit union which is linked to my Emigrant Direct account. Transfers can take up to 2-4 days states ED. I have never withdrawn from the ED account as I am trying to go for a 5 year savings plan @$100.00 a month and see what we end up with. So far so good lol. Just started this in Jan., 2006.