Emergency funds

Amazon Buckju
Jun 25, 2018 22 Comments

How much would you keep in emergency funds? And where do you keep them such that they bring a decent yield?

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TOP 22 Comments
  • Axtria MicTesting
    You don't expect yields from emergency funds. They are just the most liquid form of money in your bank account that you can use in case you lose your job/meet with accident/incur other unplanned expenses. Or that's how I understand it.
    Jun 25, 2018 1
    • Google / Eng v0
      If it is in an FDIC-insured bank account earning a non-trivial rate of interest, why would you say no to free money?
      Jun 25, 2018
  • Barclays savings online. 1.50%apy
    Jun 25, 2018 0
  • Zillow Group GilFoyle1
    I keep them in a straight savings account, post tax. I keep 1.5 years with of expenses. In that case, if anything extreme were to ever happen, I would feel secure enough to take care of all bills for a prolonged period of time.

    This is separate from any investment, brokerage, and 401k/IRA account. The yield is zero to none.

    I have multiple savings accounts that meet the max FDIC limit incase our banking system pulls a 2008.
    Jun 25, 2018 3
    • Axtria MicTesting
      Could you provide more details on your last point?
      Jun 25, 2018
    • Checkr HkakM
      The max FDIC limit is what the FDIC insures per bank account if the bank fails. I believe currently it’s 250k per account.
      Jun 25, 2018
    • GitHub costcomilf
      Fractional reserve system is a bitch. FDIC has limits for how much it will cover in a single account. Google it. If you have more than the limits it’s best to spread across multiple accounts or else you may not be able to access your money if there was a run on the bank.
      Jun 25, 2018
  • Microsoft SelR87
    Are bonds, vteb a reliable place to put emergency fund?
    Emergency funds, to me, implies 6 month rent + groceries. What is emergency fund for you, OP?
    Jun 25, 2018 1
    • Bloomberg iaYM02
      Bonds are not good for emergency fund. Bonds can go down in value. Money market is ok.
      Jun 25, 2018
  • WalmartLabs dsavage
    6 months to a year of expenses. Ally Bank can be good. Honestly I just have money in the market plus large cc limits. What's your threat model? Health emergency? Layoff? Market crash? Plan accordingly.
    Jun 25, 2018 0
  • Google / Eng v0
    Enough to cover all expenses (mortgage/rent, other recurring payments, food, gas etc) for 8 months.

    Check out https://www.bankrate.com/banking/savings/rates/ for places to park your emergency fund.
    Jun 25, 2018 0
  • Oscar / Eng
    T4nqepSL3

    Oscar Eng

    PRE
    SpaceX
    T4nqepSL3more
    12 months costs, cash in a safe under my bed.
    Jun 25, 2018 3
    • Bloomberg iaYM02
      Under the mattress! Old school!
      Jun 25, 2018
    • Snapchat / Eng
      Shroomer

      Snapchat Eng

      PRE
      Google
      Shroomermore
      Make sure you bolt down the safe. It's the first thing burglars will take. They worry about opening it later
      Jun 25, 2018
    • Amazon FooBear
      If they can pick it up even without bolts it's not a safe. More likely a residential security container... which is to say a waste of money.

      I'm having a hard time imagining when it would be preferable to have 6mo of cash on hand (vs in the bank). A month or two sure... but 6 months? Better to store food and firearms at that point.
      Jun 25, 2018
  • OpenTable Meliodas
    $1K cash in small bills at home in fire safe. Assume major disaster with grid-down for days or weeks (e.g. Puerto Rico).

    3-6 months living expenses in savings/money market at bank with East and West coast data centers.
    Jun 25, 2018 1
    • Checkr HkakM
      The east/west coast data centers is something I hadn’t thought of. How did you find that out? Which bank do you use?
      Jun 25, 2018
  • Capital One 94xz
    6 months + 30% buffer in Betterment Safety Net fund. Been seriously questioning this approach though. I may go to a money market and CDs.
    Jun 25, 2018 0
  • Amazon FooBear
    6mo of expenses
    75% in a no penalty CD currently at 1.75%
    20% in VCAIX
    5% in VTSMX

    Been thinking about incorporating it in to my normal non-retirement investments instead.
    Jun 25, 2018 0
  • Microsoft / Eng KinZune
    6 month Base
    Jun 25, 2018 0
  • Microsoft PXGr32
    6 months paychecks (net take home) worth (done). Now I add $300 a month and 20% of my annual bonus, without capping.

    Barclays saving acct, 1.65%
    Jun 25, 2018 0
  • Visa dotart
    6 months expenses. Alliant credit union 1.6%
    Jun 25, 2018 0