Where can I invest my emergency fund for the liquidity of a savings account, but a better interest rate?
Checking accounts, saving accounts, money market accounts and certificates of deposit are all good places to stash the cash you may need on short notice. However, if your emergency fund is too easy to access, you might be tempted to dip into it for things that are not emergencies. It is also important that the funds are liquid (easily convertible to cash) and kept somewhere that allows fairly quick access. Your emergency fund should: Pay decent interest, Have no fees, Not be too easy to access, and Not be too difficult to access. A money-market account at a bank across town, or at a brokerage, might be the right fit. Perhaps a second savings account (usually not attached to a checking account) at your credit union or bank would work. You could open a high yield savings account with online-accessible banks like Emigrant Direct, ING DIRECT, or similar institution. Savings deposited in these institutions have historically paid much better interest than most other savings accounts, for one
