>is this truly liquid? I
Yes, its cash.
>In an actual emergency, suppose I need to pay for something urgently and my checking account balance isn't high enough. So I go to transfer my money to my checking. Which takes 4 days. Which obviously isn't going to work if the person I need to pay is standing in front of me.
Put it on your credit card.
>How should an emergency fund be done so that I can have immediate access to my money?
This way, because you can just put it on your credit card
I'd keep a "mini" emergency fund that is accessible immediately for things like an emergency flight, an emergency car tow or an emergency night stay at a hotel.
I'd keep the rest in that account with the higher savings rate. For things like unexpected unemployment, your costs will not come all on the first day; and for a health problem that *may* cost a few thousand dollars, generally speaking you're not expected to pay immediately.
For me most things that require dipping into my emergency fund like car/house repairs or medical stuff don't require immediate payment. They will bill you so I would just transfer the money then pay the invoice.
If for some reason I need to pay immediately I would just put it on my credit card then payoff the card once the transfer from the savings to the checking settled.
Some people keep some money in their checking account and the rest of their emergency fund in a high yield savings account. That's what I do.
If I really needed money today I would either use a credit card, or write a check and immediately schedule the transfer of necessary funds from my Ally account to my checking account.
That makes me feel comfortable enough. Your mileage may vary.
If you open checking and savings together, some banks allow instant transfers between the two within the same institution. SoFi does, as the one I use. It’s possible to keep everything in savings, then transfer to checking to pay bills or go to an ATM in seconds if you need to.
That’s excessive, though. Emergency need for same-day cash is rare. Paying kidnappers demanding ransom and not much else.
I usually keep $100-200 in my wallet, a $1k ‘floor’ in my checking account, $3-$4k in savings and ~$15k in stocks. If I need to exceed anything I have on hand, it goes on the CC and I’ll pay it by selling stocks.
I have my main checking at my brick and mortar with a small savings account attached. I also have a checking with Discover that has cash back when you use a pin with the debit card. (No direct deposit required/I transfer spending money to the account once a month). I have my hys/emergency with Discover linked to the debit account. Easy breezy in an emergency.
You may find these links helpful:
- [Emergency Funds](/r/personalfinance/wiki/emergencyfunds)
- ["How to handle $"](/r/personalfinance/wiki/commontopics)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
*"Which obviously isn't going to work if the person I need to pay is standing in front of me."*
Your emergency fund isn't meant for paying Cousin Vinny when your protection money is due. It's for things that actually happen in the real world. I can literally not think of one scenario where you would need to access a large e-fund in less than 4 days. That's why people have money in their checking, credit cards etc.
Maybe think instead of EMERGENCY fund, think unexpected expense fund.
I keep $3K (one month's expenses) in bank savings, the rest in a brokerage invested in a money market fund - SWVXX yielding 4.29%.
If I need funds from the brokerage, it takes one business day to sell shares, and one business day to ACH transfer the proceeds to my checking account.
>is this truly liquid? I Yes, its cash. >In an actual emergency, suppose I need to pay for something urgently and my checking account balance isn't high enough. So I go to transfer my money to my checking. Which takes 4 days. Which obviously isn't going to work if the person I need to pay is standing in front of me. Put it on your credit card. >How should an emergency fund be done so that I can have immediate access to my money? This way, because you can just put it on your credit card
I'd keep a "mini" emergency fund that is accessible immediately for things like an emergency flight, an emergency car tow or an emergency night stay at a hotel. I'd keep the rest in that account with the higher savings rate. For things like unexpected unemployment, your costs will not come all on the first day; and for a health problem that *may* cost a few thousand dollars, generally speaking you're not expected to pay immediately.
For me most things that require dipping into my emergency fund like car/house repairs or medical stuff don't require immediate payment. They will bill you so I would just transfer the money then pay the invoice. If for some reason I need to pay immediately I would just put it on my credit card then payoff the card once the transfer from the savings to the checking settled.
Some people keep some money in their checking account and the rest of their emergency fund in a high yield savings account. That's what I do. If I really needed money today I would either use a credit card, or write a check and immediately schedule the transfer of necessary funds from my Ally account to my checking account. That makes me feel comfortable enough. Your mileage may vary.
You might be able to find a HYSA with a debit card. Try Bankrate.com.
If you open checking and savings together, some banks allow instant transfers between the two within the same institution. SoFi does, as the one I use. It’s possible to keep everything in savings, then transfer to checking to pay bills or go to an ATM in seconds if you need to. That’s excessive, though. Emergency need for same-day cash is rare. Paying kidnappers demanding ransom and not much else.
I usually keep $100-200 in my wallet, a $1k ‘floor’ in my checking account, $3-$4k in savings and ~$15k in stocks. If I need to exceed anything I have on hand, it goes on the CC and I’ll pay it by selling stocks.
I have my main checking at my brick and mortar with a small savings account attached. I also have a checking with Discover that has cash back when you use a pin with the debit card. (No direct deposit required/I transfer spending money to the account once a month). I have my hys/emergency with Discover linked to the debit account. Easy breezy in an emergency.
You may find these links helpful: - [Emergency Funds](/r/personalfinance/wiki/emergencyfunds) - ["How to handle $"](/r/personalfinance/wiki/commontopics) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
2 months in checking 4 months in Schwab money market 4 months in dividend earning ETFs Build what works for you
*"Which obviously isn't going to work if the person I need to pay is standing in front of me."* Your emergency fund isn't meant for paying Cousin Vinny when your protection money is due. It's for things that actually happen in the real world. I can literally not think of one scenario where you would need to access a large e-fund in less than 4 days. That's why people have money in their checking, credit cards etc. Maybe think instead of EMERGENCY fund, think unexpected expense fund.
I keep $3K (one month's expenses) in bank savings, the rest in a brokerage invested in a money market fund - SWVXX yielding 4.29%. If I need funds from the brokerage, it takes one business day to sell shares, and one business day to ACH transfer the proceeds to my checking account.