AggieChemist said:
Mine is stuck in an online savings account. It's only drawing a pitiable 1%, but it's liquid and safe. I don't want to tie it up in a CD, and that's a pretty crappy return, as well.
Is there some better vehicle that I'm not thinking of, or do I just suck it up and earn my couple hundred bucks a year in interest?
I probably have a larger emergency fund than what I need, but I've divided mine up. About 1/2 is in my Capital One savings account (that was earning 2%, but I think it's dropped below that). The other 1/2 is in some Fidelity index funds. These funds are balanced enough that I typically don't see huge swings, and I've had my money in them long enough that they'd have to lose about 1/2 their value in order for me to get to my original contribution. Still makes me nervous to think about a big drop, but that eases my mind a bit. And that money is still easily accessible to me, should I have an emergency that can't be handled by the savings account.
I also have a Roth IRA that I could use the principal from, if I got in a real bind.
And then there is my HSA, which is my emergency medical fund account. I've got about 3x my OOP max in there, and it's good to know that my other emergency fund accounts will only be used for non-medical emergencies.
I've used CDs off an on, and Cap One's 12 month CD rate has been slightly better than their savings rate over the last couple of years. But I pulled it out of the CD for now because I wanted access to the money (most likely to pay off a car early). I just haven't pulled the trigger, yet. Once I do that, I may put some of it back in a CD.