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4: Make Your Emergency Fund Plan

Where Should I Keep My Savings?

Bag of money

Some folks like to keep all their emergency savings in one large fund. But, dividing some of your long-term emergency fund into interest-bearing accounts gives your money the opportunity to make more money.

Investment accounts may not offer immediate access to your money though, so it’s better to keep at least some emergency cash for immediate needs in a regular checking or savings account.

Money market accounts are a good choice for short-term emergency funds since they offer easy access (ATM card, debit card or check) with reasonable interest. Let the long-term emergency fund grow in a higher-yielding account like a Roth IRA, Certificate of Deposit (CD) or savings bond. Keep in mind, though, that these funds don’t always offer immediate access.

SAM tips

Keep your emergency fund money separate from other money. Otherwise, it is too easy to dip into it.


Nichelle's Story

Money growing

It’s important to set goals for your savings and your future. Nichelle Johnson, a single mother of two with a part-time job, set her goal for a small emergency savings fund. In spite of the small amounts she was able to save each payday, Nichelle achieved her goal of saving $300 and is now growing her long-term savings. She admits that it is not always easy, but she is making progress toward her goals. You can read Nichelle’s full story at America Saves.

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