Personal Finance and Investing

Happy Hoosier

(8,608 posts)

10. Having an emergency fund in cash is a good idea...

Sat Oct 19, 2024, 08:39 AM

Oct 19

The point of an emergency fund is to a guaranteed source of cash for that “rainy day.” If it’s in a volatile Investment, the owner needs to be able to wait out a down market… or accept the losses.

However, there are High Yield Savings Accounts which earn interest above inflation with basically no risk. That is where I keep my emergency fund. I keep about $25K there, which would cover household expenses for about 6 months in the event both my wife and I lost our jobs simultaneously. And it is FDIC insured. I use Ally, but there are plenty of options.

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I've got a friend with ten grand sitting in a regular savings account doing nothing [View all] Mr. Scorpio Oct 2024 OP

There are still some CDs with good rates available if they are risk averse. we can do it Oct 2024 #1

That is exactly what we just did. nt Ferrets are Cool Nov 8 #12

Is that the only money he has? If so, it marybourg Oct 2024 #2

Nah.... get it in a HYSA. Happy Hoosier Nov 1 #11

10K is good starting point to starting for multigraincracker Oct 2024 #3

At 75 I'll keep my $ in savings Lebam in LA Oct 2024 #4

Cash is a demand on future consumption bucolic_frolic Oct 2024 #5

I'm very skittish and don't like risk - at all MaryMagdaline Oct 2024 #6

Current CD rates range from 4% to 4.6% for 3 months to one year surfered Oct 2024 #7

Yup. The OP should ask his friend if he likes free money! A HERETIC I AM Oct 2024 #8

Capital One has some high interest savings accounts nearly as good as CDs. nt CoopersDad Oct 2024 #9

Having an emergency fund in cash is a good idea... Happy Hoosier Oct 19 #10