Where Should You Keep Emergency Funds?

Life is a very unpredictable game. You never know what is going to happen next. During bad phases of life, when life surprises you with little twists, maybe that is the time you need an emergency fund.

But where should you keep it?

Stuff happens every day. It may be good, it may be bad and often it happens when you least expect it. It may be an accident, an unexpected expense, financial breakdown or anything else.

That’s when you need emergency funds the most. You need to start building an emergency fund if you haven’t started yet. It protects you and your family from unexpected financial breakdowns at that time when you are not prepared.

The best place to store your emergency funds for a short period of time or maybe a long is somewhere separate from your regular expenses and savings accounts. You need to store it and then forget it until when you don’t need it in an emergency.

A Place For Your Emergency Funds

With a thousand dollars by your side, you need a place that is safe enough to protect your emergency funds as well as it should give you a return on your cash reserves. It all depends upon you that at what place you want to store your emergency funds so that you make sure whenever you need it you can access it easily.

We are going to recommend you some places where you can store your emergency funds without any trust issues-

Money Market Accounts

A money market account is a deposit account. It pays you interest which is based on current interest rates in the money markets. The interest paid by the money market account is generally more than the interest paid by savings account and transaction account.

Some banks provide you the feature of avoiding monthly fees and help you in earning interest but they may have some guidelines including the condition of maintaining a higher minimum balance in your money market account.

You can keep your emergency funds in a money market account because it is safe as well as it is very similar to a savings account. Moreover, it also offers you higher interest rates than the normal savings account.

It is very easy to open a money market account. You can apply online or you can go to a local bank and after that, you can access your money through an ATM or web-based account management.

Certificate Of Deposit

A certificate of deposit(CD) is a time deposit that is very similar to savings accounts. In the USA, for banks, certificates of deposits are insured by Federal Deposit Insurance Corporation (FDIC) and for credit unions, they are insured by the National Credit Union Administration (NCUA). CD has a fixed interest rate as well as it is specific and it is for a fixed term i.e., a period of one, two or three months or maybe a period of one to five years.

CDs offer a fixed interest rate over a fixed period of time. For example, it provides 1.30% APY for 24 months. You can invest your fund here in the form of your emergency money.

High-Yield Bank Accounts

Here you can keep your money in a deposit account which is held by a retail bank. It also pays you regular interests. The accounts let the customers keep a portion of their assets besides and moreover, it also provides them interest.

A high yield savings account is considered the best place to keep your emergency funds. You can access your funds anytime you want as well as you will also get interested in your deposits.

If you want to find the right high yield bank account to keep your emergency funds, you must look for a better interest rate as well as it shouldn’t ask for monthly fees or balance requirements.

Roth IRA

Roth IRA i.e., Individual Retirement Account is a plan that started under United States law. It is generally not taxed and it provides certain conditions. In a Roth IRA account, the withdrawal from the IRA account is tax-free as well as the growth in the account is also tax-free.

It may be that Roth IRA may not seem to be an ideal spot for investing your emergency funds but it is a good place if you want to keep your money somewhere for some time.

By investing your money here, you may have higher earnings than traditional savings.

Although there is a risk of keeping your money in IRA because your Roth IRA may lose value. But in general, it is a good and secure place to invest.


Whenever you are in need or your family is in trouble, it’s your emergency fund that helps you in the time of need. You may not use it for the regular purpose, though, you need a secure place to keep your fund so that you can use in the case of an emergency.

The above places for keeping your emergency funds are one of the best and secure places. You get a good interest rate, you can take your money whenever you want.

Storing your emergency funds in such places provides you a very good feature that your money continues growing until the day when you need it in an emergency.