Where Should I Keep My Emergency Savings?

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Having emergency savings is an important part of finances. If you are someone who has accomplished the goal of saving up for emergencies, you may be wondering where you should store your money.

Here is more detail on where you can keep those emergency savings. You can use this information to compare and to figure out what works best for your individual finances.

Keep Your Emergency Savings in a Specialized Bank Account

Unlike traditional bank accounts, specialized bank accounts acquire interest for the customer. Here are a few different types of accounts that can help your money grow:

  • High-Yield Savings Accounts—These are a type of savings account where you earn interest on your deposits. Another great advantage is that the funding is easily accessible in case you need to access them. Keep in mind that there may be some fees for withdrawing.


  • Money Market Accounts—These are similar to high-yield saving accounts, except they generally earn more interest. However, money market accounts usually have more fees than high-yield bank accounts, so it is important to make sure that you are not losing more than you are saving.

You Could Invest Your Emergency Savings in Several Ways

Another great thing you can do with your emergency savings is invest them. Here are different ways you could invest your emergency savings:

  • CD Account with No Penalties—A certificate of deposit (CD), is a type of investment account where you put away your money for a specific period of time. While your money is being held, interest is added to it.


Although many CDs have penalties if a person withdraws from their account early, there are some that don’t have this penalty. CDs can be ideal for storing funding you need to access.

  • Treasury Bills and Savings Bonds—These are investments that take a few years. They are a tool that can be used for long-term saving for things like retirement. One thing to keep in mind is that treasury bills and savings bonds generally carry early withdrawal penalties, so it may not be a good idea to invest all of your emergency savings in them.
  • Roth IRA—A Roth IRA is essentially a very helpful tool for planning your retirement. With these investment accounts, a person could obtain a very large return for their funding. However, there are usually a few early access penalties with these, so it may not be a great idea to hold your entire emergency savings in a Roth IRA account.
  • Mutual Funds—Mutual funds are an investment program that is funded by shareholders, and they tend to carry less risk than stocks. Mutual funds can be a good idea for those who want to take a small risk in order to see a good amount of financial growth.

Like treasury bills, Roth IRAs, or savings bonds, it is NOT generally a good idea to have all of your emergency savings allocated to mutual funds.

You Could Keep It Simple with Your Emergency Savings

Another option is to simply keep your emergency savings in a traditional bank account.

Along with your checking account, you can open up a savings account with your information.  There are all kinds of saving accounts, here are a few that work well for saving emergency funds:

  • A Regular Savings Account—These are one of the most basic savings accounts. It is fairly easy to open a savings account with a bank, especially if you already having a checking account with that bank. This can make accessing your money a lot easier.

One great option that many banks offer nowadays is the ability to “hide” a savings account from a customer, so they are not tempted to access it. When banking online, a person can activate a feature that allows them to keep their savings account hidden, this way it won’t show up when you access your checking account.


  • A Savings Account that Earns Interest—Along with a standard banking account, many banks will offer saving accounts that earn a small amount of interest. These are similar to high-yield accounts but have a lower amount of earnable interest—but they generally have less fees.


It may be helpful to know that most banks do ask for a minimum amount to be deposited. Your money should also be easily accessible with this kind of savings account.

A Few Ways to Build Your Emergency Savings

Whether you are just starting out, or already have a good amount saved up, there are many simple ways to build your savings. When you need emergency cash, here are a few tips:

  • Set up Automatic Payments—Talk to your bank about having automatic payments from each paycheck go directly to your savings account.
  • Give Yourself a Savings Goal—Having a goal set up monthly, or even weekly, can be a helpful tool when trying to save money.
  • Cut Down on Unnecessary Spending—This is one of the simplest approaches to saving money. There are small steps you can take every day to try and save, whether it is something small like cooking at home, to something bigger like biking to work.

Emergency savings is an important part of finances, and everyone should have a savings plan. If you already have an emergency savings account, you could invest, put those savings into a specialized bank account, or you could simply keep your money in a standard savings account. Everyone’s finances are different and what you choose to do with your emergency savings depends on how much risk you are willing to take and how accessible you want your money to be.

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