Toggle sidebar

Emergency Fund

B

bluelifer

New member
Feb 25, 2009
752
414
0
Where is yours? Mine currently sits in a savings acct at my primary bank earning a negligible rate. I know it's supposed to be safe and liquid, but it pains me to see it not even keep up with inflation.

So, I'm thinking about moving it to one of the FDIC insured online banks, as their rates can be around 1%, but I'd like to see it earn even more.

Does anyone have any experience with these online banks, or recommend a different investment option for this type of account?
 
U

UKGrad93

New member
Jun 20, 2007
17,437
12,538
0
I have some in a savings account and some in a checking account that pays interest. Local credit union. Currently 2.25%.
 
P

pikespeak1

New member
Nov 30, 2008
1,402
1,110
0
bluelifer said:
Where is yours? Mine currently sits in a savings acct at my primary bank earning a negligible rate. I know it's supposed to be safe and liquid, but it pains me to see it not even keep up with inflation.

So, I'm thinking about moving it to one of the FDIC insured online banks, as their rates can be around 1%, but I'd like to see it earn even more.

Does anyone have any experience with these online banks, or recommend a different investment option for this type of account?
Click to expand...
How big is your emergency fund that it has you worried about the interest rate?
 
W

wildcatsboston1984_rivals

New member
Mar 23, 2012
23,493
1,384
0
I have a savings account and one CD. I get a 0.8% interest rate on the CD, 0.02% on the savings account. The cost of calculating the interest earned is probably higher than the amount of interest I earned. Frankly I don't know why I have money buried in the CD to begin with, should be putting it into something with a higher rate but despite taking a MBA level finance class I don't screw around with finances any at all.
 
U

ukalumni00

Well-known member
Jun 22, 2005
23,050
3,619
113
Have about 6 months worth of funds (based on current lifestyle) if needed in my savings. Everything else is in other investments (401k, Roth, Traditional, Mutual Funds, etc). I just do what my advisor tells me to do along with what I have learned over the years. Feel I am about as diversified as I can get with my current income level, etc. If or when the world economy totally crashes it won't be worth crap, but for now I can dream about a comfortable retirement.
 
  • Like
Reactions: From-the-stands and Tinker Dan
H

Hank Camacho

Well-known member
May 7, 2002
27,353
2,421
113
I think the best option is what you're doing: an interest-bearing savings account with FDIC protection. It won't keep up with inflation (and that sucks) but the upshot is that the money is liquid in case of an emergency and you have the U.S. government guaranteeing the money in case of calamity, a run on the bank, etc.

You're just going to have to put some more in every once in a while to keep up with inflation and (presumably) increased lifestyle.

I would much prefer knowing that my emergency money is going to be there when I need it rather than try to get cute and earn an extra point or two in something off the beaten path. But that's me. Your mileage may vary.
 
  • Like
Reactions: pikespeak1 and bluelifer
H

Hank Camacho

Well-known member
May 7, 2002
27,353
2,421
113
UKGrad93 said:
I live in Iowa. You either have to live in the area, be a previous member, or graduate of the University of Iowa. It pays interest on balances up to $20k.
Click to expand...

That's a pretty sweet deal. And $20k is probably a solid emergency fund for most, as well.

Good for you.
 
  • Like
Reactions: UKGrad93
J

jwheat

Member
Aug 21, 2005
97,624
11,400
42
I have a nice little jar buried between a couple hills at the end of the hollow
 
warrior-cat

warrior-cat

Well-known member
Oct 22, 2004
190,018
4,372
113
About 10 months worth keeping up with current living conditions. However, could stretch that out to 12 by adjusting living conditions.
 
D

DSmith21

New member
Mar 27, 2012
8,297
2,036
0
Better than bitcoins.

 
Last edited:
B

BankerCat12

Active member
Sep 21, 2012
5,897
463
83
We have $60k in a money market paying .40%. Not an earth shattering rate but I would rather just keep here than deal with someone online. We both max out our 401K's annually, but in the last 5 years I have not saved a penny monthly in our checking/savings account. I am paying down my mortgage aggressively as possible and have bought two investment properties in the last 2 years. I know people go different ways on whether to keep a mortgage payment or not but I would rather have mine paid for and buy more rental properties and have someone else pay it down for you.

We offer the same type of program as the credit union above. 2% on balances up to $20k. Anything over the $20k earns .25%. Still better than most banks in town on the lower rate.
 
  • Like
Reactions: bluelifer, AustinTXCat and TruBluCatFan
T

TruBluCatFan

Well-known member
Dec 21, 2001
19,300
2,481
113
What the hell is an emergency fund? Ours is long gone. It was definitely used for emergencies but I don't see it being built back up for at least 6 years now and that assumes kids finish college in 4 years.
 
P

pikespeak1

New member
Nov 30, 2008
1,402
1,110
0
bluelifer said:
About 6 months of living expenses for me and the wife.
Click to expand...
Obviously it's good to get as much interest as you can, I don't think I would put my emergency fund online. Would focus on ease of access. A percentage point or two is not going to make you much money.
 
R

RonEJones

New member
Apr 8, 2010
12,748
315
0
Have about $20k mixed in between tax free bonds and mutual funds. I know there's some risk there, especially with the mutual funds if the market is down when I need the cash, but it's worth the gamble for me at this point in life. I am in a good situation and have plenty of available credit. So the crap would really have to hit the fan for me to dip into it.
 
E

EWreddevil

New member
Feb 5, 2003
40
4
0
Dupree Municipal Bond Mutual Fund for me - paying around 3% federal and state tax free

Tax Equivalent payout is much higher since it's tax free and can take funds out at any time without any fee. The share price doesn't change much so the risk to principal is limited.
 
  • Like
Reactions: bluelifer and AustinTXCat
AustinTXCat

AustinTXCat

Well-known member
Jan 7, 2003
51,593
29,435
113
edubbs said:
Dupree Municipal Bond Mutual Fund for me - paying around 3% federal and state tax free

Tax Equivalent payout is much higher since it's tax free and can take funds out at any time without any fee. The share price doesn't change much so the risk to principal is limited.
Click to expand...
I began purchasing shares of the Dupree KY Tax Free fund (KYFTX) for my daughter in 1992. She still owns some shares in it.
 
S

starchief

New member
Feb 18, 2005
10,137
4,743
0
BankerCat12 said:
We have $60k in a money market paying .40%. Not an earth shattering rate but I would rather just keep here than deal with someone online. We both max out our 401K's annually, but in the last 5 years I have not saved a penny monthly in our checking/savings account. I am paying down my mortgage aggressively as possible and have bought two investment properties in the last 2 years. I know people go different ways on whether to keep a mortgage payment or not but I would rather have mine paid for and buy more rental properties and have someone else pay it down for you.

We offer the same type of program as the credit union above. 2% on balances up to $20k. Anything over the $20k earns .25%. Still better than most banks in town on the lower rate.
Click to expand...

You'll have to pay that $60K back after the bank audit though.
 
J

JimmyWa11

New member
May 9, 2010
1,108
47
0
Have a CD in Ecuador paying 9% interest. Almost $9K/year...not bad and more steady than the stock market.
 
D

DSmith21

New member
Mar 27, 2012
8,297
2,036
0
AustinTXCat said:
I began purchasing shares of the Dupree KY Tax Free fund (KYFTX) for my daughter in 1992. She still owns some shares in it.
Click to expand...

I used to invest in that fund but stopped once I understood how bad Kentucky's debt problems were. Kentucky is the second worst in the nation in unfunded pension liability. Also most of Kentucky's bonds are not general obligation bonds (backed up by the taxing power of the state). I still invest in Munis but I pick ones from states that are in the top half financially. They are still federal tax free which is more important to me and pay about the same rate. Maybe I am overly cautious but I can't forget the courts screwing bondholders during the financial crisis.
 
  • Like
Reactions: jameslee32 and AustinTXCat
S

Supreme Lord Z

New member
Jan 7, 2016
3,445
2,364
0
Don't burst Austin's bubble like that, you'll cause him to eat 3 extra cucumber slices for lunch then ride his bike to Oklahoma while he posts every half-mile to keep us updated on all the excitement.
 
AustinTXCat

AustinTXCat

Well-known member
Jan 7, 2003
51,593
29,435
113
DSmith21 said:
I used to invest in that fund but stopped once I understood how bad Kentucky's debt problems were. Kentucky is the second worst in the nation in unfunded pension liability. Also most of Kentucky's bonds are not general obligation bonds (backed up by the taxing power of the state). I still invest in Munis but I pick ones from states that are in the top half financially. They are still federal tax free which is more important to me and pay about the same rate. Maybe I am overly cautious but I can't forget the courts screwing bondholders during the financial crisis.
Click to expand...
Great info. Thanks. I may seriously consider switching her into another fund.
 
C

catsfanbgky

New member
Oct 18, 2006
18,910
272
0
I was thinking "emergency" money as not in a bank. I keep around $5k cash stored in a box of Tiger Woods golf balls. Buick did a promo where you got a dozen of Nike golf balls for test driving a new Buick back around 2008. I have like 8 dozen or so, I keep cash in the little bundle things the bank gives you and its stashed in the 5th box down from the top (5th box for $5k) in my game room. It is emergency money as in banking is down for a day or so, or if something "comes up" and I need cash, fast.
 
AustinTXCat

AustinTXCat

Well-known member
Jan 7, 2003
51,593
29,435
113
BBUK said:
Dudes dudes dudes...buy rental property.....nuff said
Click to expand...
Me and the old lady seriously looked at rental property here in Austin last year. If I could put my paranoia aside versus a couple decent REITS, I'd go for it.
 
You must log in or register to reply here.
Top Bottom