by Maja Majewski

Where to Keep Your Emergency Fund

Do you have at least $1,000 set aside to cover an unplanned expense? If not—it’s time to talk about where to keep your Emergency Fund! An Emergency Fund is a stash of funds set aside for whatever life throws at you.
Where to Keep Your Emergency Fund

Do you have $1,000 available to cover an unexpected expense? About 60% of Americans don’t. So, if faced with an unexpected expense, they would likely need to ask for help from family or friends or—worse—rely on their credit cards to get them out of a bind while risking getting into more debt.

That’s why it’s important to build up some emergency savings: So you can avoid having one rainy day completely derail your financial goals! Another thing to know: Where you keep your Emergency Fund matters. Although you have a few options, a high-interest bank account - like a Simple Protected Goals Account - is often recommended. Here are some of the reasons we recommend keeping your Emergency Fund in a high-yield checking account, like a Simple Protected Goals Account!

Tips for choosing where to keep your Emergency Fund.

You know you need an Emergency Fund; but do you know where you want to keep it? Most financial experts will agree that keeping your Emergency Fund separate from your checking account is important (so you don’t spend it), but beyond there, opinions vary.

Here are a few things to consider:

  • You’ll want to be able to access your money easily in case you need it.
  • You’ll want to be able to grow your Emergency Fund as quickly as possible.
  • You’ll want to avoid minimum balance requirements and maintenance fees associated with the account.

It’s important to know what to look for so you can find the right type of account for you! Here are some things to look for when choosing where to keep your Emergency Fund.

Earn a competitive interest rate on your balance.

We’d bet money on the fact that you’d probably like to grow your Emergency Fund quickly. The sooner you can fund your Emergency Fund, the sooner you can start putting money toward your other financial Goals!

Earning interest on your Emergency Fund balance is a great way to grow your money faster than just saving alone! There are several types of accounts that allow you to earn interest on your balance, including high-yield checking and savings accounts, Certificates of Deposit, and money market accounts.

For your Emergency Fund, you’ll want to find an account that will earn a good interest rate that also gives you access to your money immediately without penalties or transaction limitations.

A high-interest checking account (like a Simple Protected Goals Account) gives you both: With Simple, you can start earning a competitive interest rate on your Emergency Fund balance, whether you’ve saved $50 or $5,000 to set aside.

That brings us to our next tip!

Make sure you can access your money without penalty.

You have a few options in terms of where to keep your Emergency Fund, but not all are equal: For example, if you decide to stash your Emergency Fund into a CD, you’ll likely have to pay penalties to take your money out if you need it before the end of the term.

You could keep your Emergency Fund in a savings account, but watch out for withdrawal limits: Most banks will only allow you to use your savings funds six times a month.

CDs and savings accounts can be great financial tools, but they might not be the right place to keep your Emergency Fund: Because although you’d probably prefer to not have to use the money in your fund, you should be able to use it (without paying extra) if you do need it!

If you keep your Emergency Fund in Simple, your funds will be safe from accidental spending. But if you need them, they’ll be available for use, without any additional hoops. Whether it’s to cover a flat tire or an ER bill, you can immediately transfer the funds to your Simple Account and just swipe your Simple Visa® Debit card, use a Simple check, or get cash from one of thousands of ATMs to use your funds.

Watch out for minimum balance requirements or maintenance fees.

Many banks will offer accounts with great interest rates–but you have to have a certain minimum balance in your account at all times to quality for that rate. If not, you might only qualify for a lower interest rate (if any at all). There might also be monthly fees just for holding the money in your account.

With Simple, you won’t have minimum balance requirements or maintenance fees!

Look for built-in tools to make saving easier.

The best way to make sure something gets done? Automate it. Look for an account that offers automatic savings tools to make it easier for you to stay on track toward your financial Goals.

This is another place that Simple’s high-interest checking accounts are a great option: When you create your Emergency Fund in your Protected Goals Account, you can set it up to automatically save according to whatever schedule works for you: Like saving $50 every time you get paid. Just follow the setup instructions to create a Funding Schedule for your Emergency Fund, and watch your fund grow!

When you create an Emergency Fund, we’ll automatically transfer money, every day, from your Safe-to-Spend to the Emergency Fund (as long as you have the funds available).

PS–To grow your fund even faster, be sure to turn on Round-up Rules! Whenever you make a purchase, Simple will round up what you spend to the next whole dollar amount. When the “change” from those transactions reaches or exceeds $5, Simple transfers it to your Protected Goals Account — so easy you won’t even feel it.

Turn on Round-up Rules here!

Grow Your Emergency Fund with Simple

Only 40% of Americans have sufficient savings to cover an unplanned expense of $1,000 or more. We’re here to change that narrative! With no minimum balance requirements, a competitive interest rate, and tools to help you grow (and protect!) your Emergency Fund, Simple is a great place to keep your emergency savings! Soon, you’ll have the financial safety net you need to stay afloat - even when emergencies arise.

Start an Emergency Fund

Disclaimer: Hey! Welcome to our disclaimer. Here’s what you need to know to safely consume this blog post: Any outbound links in this post will take you away from, to external sites in the wilds of the internet; neither Simple or our partner bank, BBVA USA, endorse any linked-to websites; and we didn’t pay/barter with/bribe anyone to appear in this post. And as much as we wish we could control the cost of things, any prices in this article are just estimates. Actual prices are up to retailers, manufacturers, and other people who’ve been granted magical powers over digits and dollar signs.

Important! Keep your account safe from fraud

As fraud attempts are on the rise recently — especially related to unemployment funds — help us keep your account safe by following these guidelines.

Use your Simple Account only for your own personal use. Don’t share your account with others or receive funds on behalf of third parties.

Don’t share your username or password with others. Never give out your login information. Simple will never ask you to tell us your password — if any third party makes such a request, it’s an attempt at fraud.

Don’t open an account at someone else’s request. If someone else asks you to open a Simple Account — such as a real estate company, prospective employer, or someone you met online — it is likely an attempt at fraud.

Be alert for unemployment insurance fraud. You may be violating the law and the terms of your Simple Account if you receive deposits of unemployment funds on behalf of someone else. There are state and federal penalties for unemployment insurance fraud (including potential fines and incarceration). If you suspect you are a victim of unemployment fraud, contact the appropriate state fraud hotline listed here.

Don’t receive funds on behalf of a third party. Keep in mind that receiving funds on behalf of a third party violates the terms and conditions of your Simple Account; in such instances, we may restrict and/or close your account and hold the funds while we await direction from enforcement agencies.

I acknowledge that I have read this notice Continue Application