Great Accounts for an Emergency Fund

Several will help you grow your money and are less stressful than a loan when you need fast cash.

To prepare for a loss of income or a large, unexpected expense, the standard advice is to set aside at least three to six months’ worth of living expenses. But only 41% of U.S. adults have stashed away enough to cover just a $1,000 emergency, according to a recent Bankrate survey. Instead of tapping savings, 16% say they’d use a credit card, 14% would borrow from family or friends, and 7% would take out a personal loan.

An emergency fund in a dedicated account offers more freedom and less stress than a loan when you need money fast. If you keep the funds in a bank money market deposit account, it may come with a debit card or checks, providing easy access to your money. If you prefer a savings account, look for one that allows large, quick transfers of money to your checking account, says Ken Tumin of One way to achieve that is to open both a savings and a checking account with a single bank—transfers within an institution are usually immediate and free, says Tumin.

Whichever type of account you choose, look for one that doesn’t charge a monthly maintenance fee. If your account tacks on a monthly fee when the balance falls below a certain level, you may end up being charged if you make a big withdrawal. Ideally, the account will have a track record of offering a high interest rate and require a low minimum balance to earn interest.

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Saver-friendly accounts. Tumin recommends three online savings accounts that fit the bill. The Ally Bank Online Savings Account yields 1.6%, the Marcus by Goldman Sachs Online Savings Account has a 1.7% interest rate, and the SFGI Direct Savings Account yields 1.86%.

Among money market deposit accounts, check out the Sallie Mae Money Market Account, which comes with check writing and offers a 1.75% rate. Redneck Bank Mega Money Market yields 1.75% on a balance of up to $50,000 and offers a debit card and checks.

Lisa Gerstner
Editor, Kiplinger Personal Finance magazine

Lisa has been the editor of Kiplinger Personal Finance since June 2023. Previously, she spent more than a decade reporting and writing for the magazine on a variety of topics, including credit, banking and retirement. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.