Where to keep an emergency fund
Keep it safe, reachable within a day or two, and earning a real rate. Split by how fast you’d need it, a $30,000 fund keeps about $957 a year after 22% federal and 5% state tax at today’s rates. In a typical checking account it keeps $2.
A $30,000 emergency fund, in three tiers
This week: $5,000
Vanguard brokerage, 3.88% (Oct 30). Same day. Money market fund, not FDIC-insured.
Same-day money for a car repair or a deductible. Keep it where a transfer lands the same day. Keeps about $148 a year after tax.
This month: $15,000
Pibank Savings, 4.40% (Nov 5). 1 to 2 business days to move. FDIC: FDIC insured through Intercredit Bank, N.A..
One to two business days away. The bulk of the fund, earning a real rate. Keeps about $482 a year after tax.
Backup: $10,000
3-month Treasury bill, 4.19% (Nov 6). Matures in 3 months; can be sold any day at market price. Backed by the U.S. government.
Money you’d tap only in a long emergency. A 3-month T-bill can be sold any business day at a broker. Keeps about $327 a year after tax.
The split is an example, not a rule: a common guideline is three to six months of expenses, and the right size depends on your job, household and insurance.
Every option you can reach within two days, ranked after tax
| Option | Rate | Kept / yr on $30,000 | Access and protection |
|---|---|---|---|
| Pibank SavingsHigh-yield savings | 4.40%Nov 5 | $964 | 1 to 2 business days to move. FDIC: FDIC insured through Intercredit Bank, N.A. |
| Peak Bank Envision High Yield SavingsHigh-yield savings | 4.27%Nov 5 | $935 | 1 to 2 business days to move. FDIC: FDIC insured |
| EverBank Performance SavingsHigh-yield savings | 4.20%Nov 2 | $920 | 1 to 2 business days to move. FDIC: Standard $250k per depositor |
| Treasury money fund (Vanguard)VUSXX, Vanguard Treasury Money Market Fund | 3.89%Oct 30 | $910 | Next business day. Money market fund, not FDIC-insured |
| Treasury-only money fund (Fidelity, via Merrill)FSIXX, Fidelity Treasury Only Portfolio, on Merrill | 3.84%Oct 30 | $898 | Next business day. Money market fund, not FDIC-insured |
| ZYNLO Tomorrow SavingsHigh-yield savings | 4.10%Nov 5 | $898 | 1 to 2 business days to move. FDIC: Standard $250k per depositor |
| Cash Reserves Federal money fund (Vanguard)VMRXX, Vanguard Cash Reserves Federal Money Market Fund (Admiral) | 3.89%Oct 30 | $893 | Next business day. Money market fund, not FDIC-insured |
| Vanguard brokerageVMFXX, Vanguard Federal Money Market (settlement fund) | 3.88%Oct 30 | $888 | Same day. Money market fund, not FDIC-insured |
Compare with your own balance and taxes
Questions
Where should I keep my emergency fund?
Somewhere safe that you can reach within a day or two, earning a real rate. Today, on a $30,000 fund at a 22% federal bracket and 5% state tax, splitting it by how fast you'd need it keeps about $957 a year, against $2 in a typical checking account: $5,000 in Vanguard brokerage, $15,000 in Pibank Savings, $10,000 in 3-month Treasury bill.
Is a high-yield savings account or a money market fund better for an emergency fund?
Both work. The best savings account we track, Pibank Savings, pays 4.40% and is FDIC-insured. A Treasury money fund such as VUSXX pays 3.89%, isn't FDIC-insured, but its income mostly skips state tax. In a state with income tax the Treasury fund often keeps a little more; savings is simpler if you don't have a brokerage account.
Should an emergency fund be in T-bills?
Part of it can be. A 3-month Treasury bill pays 4.19% today with no state tax, and at a broker you can sell it any business day, with the cash arriving the next day. Keep at least a month of expenses somewhere that moves the same day.
Is my emergency fund safe in a money market fund?
Money market funds aren’t FDIC-insured, but Treasury and government funds hold U.S. government debt and aim for a stable $1 share price; falling below $1 has been very rare. Savings accounts and CDs are FDIC-insured up to $250,000 per depositor, per bank.
Rates are read from each provider’s own page on the date shown. How we check. Money market fund rates · Savings rates · How to buy T-bills.