Now I know why EF is in my checking account

[corn18]

I usually fret about all the savings I have in cash/cash equivalents right now. I often thought about getting them in the market to make more than 0.75%. With the market dropping a bit, I have lost 4.7% so far this year in my retirement accounts. I have lost exactly 0% in my short term savings accounts. I know my short term savings also didn't make 8% in 2014, but they did stay flat in 2015, just like my retirement savings did.

This just demonstrates the importance of low risk for an EF (and college savings I need now). I am not fretting about it anymore.

Tom

[dczech09]

Amen! Who knows what the stock market will do on a yearly basis. While that risk may be suitable for long-term savings and retirement investments, that risk is definitely not suitable for an emergency fund. Cash/cash equivalents. You will not make anything, but you will not lose much (except for inflation, which can be made up with additional contributions).

[Nutria]

I usually fret about all the savings I have in cash/cash equivalents right now. I often thought about getting them in the market to make more than 0.75%.

This should be a no-brainer. CapitalOne 360 accounts are easy to open, and transferring money in and out from your external checking is just as easy. Just note that it takes a few days to clear.

Even better is that CO360 has $0 minimum 12 month CDs paying 1.3%. The only downside is that the penalty is 3 months interest; thus, if you need the money soon after you've opened it, you'll lose some principal.

I've started moving some of my CO360 money into those CDs, which I'm doing in bi-monthly stages for a total of 6 CDs.

[bjl584]

+1

there certainly is something to be said for having a simple, no frills, easily accessible account with cash in it.

[Nutria]

This just demonstrates the importance of low risk for an EF (and college savings I need now).

35+ years ago, the same advice was being taught. High risk (heavy on the equities) for distant needs, medium risk (mix of equities and bonds) for 3-10 year needs, and cash for near term needs.

[~bs]

just get an online savings account or ladder cds. still easy to access funds with the same lack of risk to principal.