Where to keep our emergency fund? ($50k)
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Anonymous
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Right now we have $50k sitting in a money market account with my credit union. Annoyingly, I can't verify the interest rate because the page won't load. But jumbo MMSA rates there are .80, so ours would be lower than that.
Should we be looking at putting that money in CDs? I was recently reading about doing a CD Ladder, which seems like a good option. What other options should I research? |
Anonymous
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Isn't the point of an emergency fund to keep it liquid? That rules out CDs.
Either you're investing it or you're not. Take the 1 percent and be happy. |
Anonymous
| I've got ours at ING. Not sure what the rate is but I'm sure it isn't much. Maybe think about whether you would need access to the whole 50k immediately and put some in a CD? Although rates for 1-2 year CDs are probably not much higher than your current account. |
Anonymous
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There's a big hayfield up near Buxton. You know where Buxton is? There's one hayfield in particular.It's got a long rock wall with a big oak tree at the north end. It's like something out of a Robert Frost poem. .. find that spot.
At the base of that wall, you'll find a rock that has no earthly business in a Maine hayfield. Piece of black, volcanic glass. Bury your emergency fund under that. |
Anonymous
| $50k is a lot as emergency fund. who's your financial adviser? |
Anonymous
That's the point of the CD ladder - to give you access to the money (assuming you don't need it all at once). |
Anonymous
Not really that much. That's probably 6-9 months of expenses - well within the guidelines. |
Anonymous
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Actually, $50K is pretty reasonable--many people recommend having 6-8 months expenses in an emergency fund.
Depending on the stability of your jobs I'd be nervous about using CDs unless you are very confident you will not need to access all the money quickly--in that case, you could put some in CDs and some in a savings account. But I agree with pp that that's not really what an emergency fund it--it's means to be easily accessible. Ours is in ING. |
Anonymous
No, that's not really a lot, given the sizes of incomes/mortgages in this area. |
Anonymous
And then, come to Mexico. Break your parole and cross at some rinky dink town in Texas. Join me on the beach, and movie will fade out there. |
Anonymous
| Vanguard short term bond fund. Better interest than money market. All the same benefits of check writing, etc. |
Anonymous
Umm, nope sorry. Who is your financial advisor? (I'm not a fan of financial advisors anyway...... ) $50K is perfectly reasonable in this economy. |
Anonymous
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We keep our $50K in a kind of CD ladder (but not exactly). It's all in ING. Still crappy interest, but super easy to transfer the money to our checking acct if needed, which is most of what matters to me regarding an emergency fund.
We keep $10K in just a regular ING savings. And then, another $10K in 4 different 3 month CDs. I figure this way, I have $10K available immediately, and then we'd only have a 3 month wait for the rest of the money, or I'd just break the CD. |
Anonymous
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Unless you want to place your money at some significant risk, you're not going to get much of a return anywhere.
Personally, I'm a big fan of vanguard,but there's no need to go chasing an extra .01 percent return. |
Anonymous
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GOLD!!!
(kidding) |