Where Are the Best Places to Keep an Emergency Fund?

By Robert Palmer

Having an emergency fund is essential to help you get through difficult times. It can help cover unexpected expenses, such as car repairs, medical bills, and even job loss. But where should you keep your emergency fund?

High Yield Savings Accounts

One of the best places to keep an emergency fund is in a high-yield savings account. High-yield savings accounts typically offer higher interest rates than traditional savings accounts and are FDIC insured, so your money is safe. Additionally, they don’t have minimum balance requirements or fees like other savings accounts, allowing you to access your money when you need it.

Money Market Accounts

Money market accounts are another great option for keeping your emergency fund. Like high-yield savings accounts, they offer higher interest rates and are FDIC insured. Money market accounts may also offer check writing privileges so you can easily access your funds when needed.

The downside is that they often come with minimum balance requirements and fees that can eat away at your returns.

Certificates of Deposit (CDs)

Certificates of deposit (CDs) are another option for keeping your emergency fund safe. CDs usually have higher interest rates than other savings vehicles and are FDIC insured up to $250,000 per depositor. However, CDs have strict terms and conditions regarding withdrawals, which means you may have to pay a penalty if you need to access the money before the CD matures.

Investment Accounts

Investment accounts such as mutual funds or exchange traded funds (ETFs) can also be used for emergency funds if you’re comfortable with the risk involved. These types of investments can provide higher returns than other options but come with more volatility due to the stock market fluctuations. You should only invest in these types of accounts if you understand the risks involved and are comfortable with potentially losing some of your money in a downturn.

No matter where you choose to keep an emergency fund, it’s important that it’s easily accessible so you can get to it when needed. High yield savings accounts, money market accounts, certificates of deposit (CDs), or investment accounts can all be good options depending on your needs and risk tolerance.


High yield savings accounts are one of the best places to keep an emergency fund due to their higher interest rates and lack of minimum balance requirements or fees compared to other types of bank deposits like CDs or money market accounts . Investment accounts such as mutual funds or ETFs could also be considered for those who understand the risks involved and have a longer time horizon for their emergency fund.