Where do you put your $1,000 emergency fund? I personally don’t care where you put it, as long as you have it saved. The question always comes up though, so I better offer some suggestions.
- In your checking account. My bank considers this amount too small for savings and charges me a monthly fee it I keep my $1,000 separate from my checking. (I earned $0.43 the one month I had it separate and paid a $5 fee - thank you, ma’am. May I have another?) Therefore, I keep our $1,000 in our checking account. This is also our built in overdraft coverage. I may change this if and when I get off my tail and fire our bank.
- In your banks savings account. If your bank doesn’t charge you, you can put it in your savings account. Some banks offer this as overdraft coverage for your checking as well (another reason I should fire my current bank). Don’t worry about making a huge return on this money. You need this money to be accessible to cover emergencies.
- In an online savings account. This is where we have our emergency funds. These online saving banks are free to use, easy to use, and secure. You can open an online savings account and earn more interest than your typical bank or even brokerage firm. I am a big fan now of INGdirect.com. At least we can earn a little interest there.
- Store it away as cash. Some people like to hoard cash. I personally don’t like this idea, because it is too easy to borrow from, but to each their own.
