How Should You Invest Your Emergency Fund?

There are many ways that you can invest your emergency fund. It is important that you choose the proper method, based on your personal and financial situations and goals.

Make It Liquid

Above all else, it is essential that some or most of your emergency fund is liquid. In short, this means that you are able to gain quick access to the funds if need be. You do not want your emergency fund tied up in investments such as stock or bonds that make it difficult to access your funds on short notice.

Emergency Fund Options

Some of the most popular methods for investing your emergency fund include online savings accounts, money market accounts, treasury bills and notes, traditional savings accounts, and certificates of deposit. When investing, make sure you find a bank or financial institution that is FDIC-insured. This helps to ensure that the money you invest is safe, regardless of what happens to the institution.

Make Money while You Save

Just because you have an emergency fund does not mean that the money has to sit stagnant. In fact, you should focus on making as much money as you can in interest. This is the reason that online savings accounts and certificates of deposit are so common.

As long as the money in your emergency fund is easy to access, you are on the right investment path. 

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