Where do you 'put' your emergency fund?

Rowbo

We have almost saved 6 months outgoings as an emergency fund but i am not sure where it should go. Its in an old virgin isa at the moment with an interest rate of 0.51%. It will total £12000 once we are done (another few months).

I've seen current accounts where you can get good rates but it would involve splitting it up and drip feeding it in. It would have to be well worth all that hassle to do that. I also dont want to be moving bits around too often - although moving the lump sum once a year would be fine if needed.

Any advice? Where are your emergency funds?

Thank you.

El_Torro

Most of my emergency fund is in current accounts. Yes, this involves maximum balances, standing orders and sometimes direct debits. I think the interest is worth the time it takes to set up though. It doesn't take a lot of management from month to month.


I'm currently saving up for something specific, that extra cash is going in Premium Bonds. I'll spend my Premium Bonds before I spend the cash in my current accounts.

Anonymous101

There's various accounts where you can get between 3-5% on a couple of thousand pounds right away. Nationwide flex direct for example is 5% on £2,500. I would list out these accounts which can easily be found on the main MSE page in order of interest rates until I had distributed the £12k.
Then look to open the regular saver type accounts paying a higher interest rates to better your position.

Getting 0.51% interest on £12k is ridiculously poor, you're losing £350-£500 a year in interest!

Rowbo

Anonymous101 wrote: »

There's various accounts where you can get between 3-5% on a couple of thousand pounds right away. Nationwide flex direct for example is 5% on £2,500. I would list out these accounts which can easily be found on the main MSE page in order of interest rates until I had distributed the £12k.
Then look to open the regular saver type accounts paying a higher interest rates to better your position.

Getting 0.51% interest on £12k is ridiculously poor, you're losing £350-£500 a year in interest!

wow! When you put it in monetary terms it makes a bit of effort seem worth it! Thank you, i will start listing!

Rowbo

El_Torro wrote: »

Most of my emergency fund is in current accounts. Yes, this involves maximum balances, standing orders and sometimes direct debits. I think the interest is worth the time it takes to set up though. It doesn't take a lot of management from month to month.


I'm currently saving up for something specific, that extra cash is going in Premium Bonds. I'll spend my Premium Bonds before I spend the cash in my current accounts.

I had considered premium bonds. That small chance of the big win is sometimes quite appealing. Thank you. I guess im off to research current accounts.

Fatbritabroad

Ive got this dilemma atm. My emergency fund is in tsb, nationwide and santander regular savers and 123 account as ive had nationwide accounts total about 14000.ivr got another 10k in p2p and the rest in stocks and shares. Im saving up to do our kitchen and replace 2 second hand cars so will probably need about another 30k but don't want the opportunity cost of holding that much cash without getting decent interest. Atm I'm just slowly building cash as I'm too tight to spend that much money!

Prism

I keep mine in my company so I don't have to pay tax on it until I absolutely need it. The downside is that my company bank account pays 0% interest and I pay the bank about £40 per year to keep it (and more to use it)

xylophone

The OP says "we" - assuming that they have never had Nationwide Flexdirect accounts, they could open a sole each and a joint and earn 5% on a total of £7500 for a year.

They could open a sole each and joint TSB Plus account and earn 5% on £4500.

Easy to arrange the necessary monthly pay ins TSB/NW and back again with same day SOs.

Once the Flexdirect year ends (provided that they have the necessary DDs), they might see what is then on offer from Tesco Bank?

bostonerimus

Keep the majority of your emergency fund in whatever easy access account gives you the most interest.

I keep a few months cash in my current account and the rest is in an account that gives 2.5% interest, but would take a couple of days to get at the money.

Zorillo

Mine is with NS&I earning 2.2% on a three year deal, with access should I need it at a loss of 90 days interest on the amount withdrawn. This helps to prevent it being frittered away.

Plus

A lot of regular saver accounts allow access - either penalty free or just dropping the interest down to a lower rate. The main ones that don't allow access are the HSBC group ones (HSBC, M&S, First Direct).