My wife and I have finally socked away the recommended six months of savings to be used in case of an emergency. We deposited the funds in a money-market account, but is there a better investment method to maximize growth and still have the funds readily accessible?
It's a great time to search for a better home for your emergency funds. Yields on money-market mutual funds have climbed from a measly 1% up to 4% over the past four years, so shifting that money out of an ordinary checking account can finally pay off.
The top money-market funds are currently yielding a little more than 4%. Take a look at Vanguard's Prime Money Market and TIAA-CREF's Money Market, which pay 4.1% and have annual expenses of just 0.3%.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
For other good deals in money-market funds, see imoneynet.com. For good money-market account deals, see our checking and savings rate page.
Or for a temporarily big bang for your buck, check out ING Direct's Orange Savings Account. The online bank is paying 4.75% on new deposits until April 15 (after which you'll receive the regular rate, currently 3.8%). The Orange Account has no ATMs but makes it easy to transfer money quickly into your checking account if you do end up needing it for emergencies.
Accessibility is a top priority for this money. The best 12-month certificates of deposit are currently yielding around 5%, but the extra points aren't worth it for your emergency fund. Because you never know when you might need the cash, you can't afford to tie it up for that long.
For help figuring out how much money to set aside in your emergency fund, see my Best Bets for Emergency Funds column. It's best to set aside enough to cover three to six months of essential living expenses in an accessible account. You can keep the balance on the lower side if you have easy access to other money, such as through a home-equity line of credit.
-
Quiz: How Much Do You Really Know About Taxes on Social Security Benefits?Quiz Social Security benefits often come with confusing IRS tax rules that can trip up financially savvy retirees and near-retirees.
-
Are You Ready for 65? The Medicare Initial Enrollment Period QuizQuiz Turning 65 soon? Test your basic knowledge of Medicare's Initial Enrollment Period (IEP) rules in our quick quiz.
-
3 Ways to Stretch the 2026 Social Security COLA For Your BudgetThree steps retirees can take to stretch the Social Security COLA to fit their budgets.
-
Credit Report Error? They All Mattercredit & debt Don't dismiss a minor error. It could be the sign of something more serious.
-
Insurance for a Learning Driverinsurance Adding a teen driver to your plan will raise premiums, but there are things you can do to help reduce them.
-
529 Plans Aren’t Just for Kids529 Plans You don’t have to be college-age to use the money tax-free, but there are stipulations.
-
When to Transfer Ownership of a Custodial Accountsavings Before your child turns 18, you should check with your broker about the account's age of majority and termination.
-
Borrowers Get More Time to Repay 401(k) Loans
retirement If you leave your job while you have an outstanding 401(k) loan, Uncle Sam now gives you extra time to repay it -- thanks to the new tax law.
-
When It Pays to Buy Travel Insurance
Travel Investing in travel insurance can help recover some costs when your vacation gets ruined by a natural disaster, medical emergency or other catastrophe.
-
What Travel Insurance Covers When Planes Are Grounded
Travel Your travel insurance might help with some costs if your trip was delayed because of the recent grounding of Boeing 737 Max planes.
-
Ways to Spend Your Flexible Spending Account Money by March 15 Deadline
spending Many workers will be hitting the drugstore in the next few days to use up leftover flexible spending account money from 2018 so they don’t lose it.
