Where should I put my rainy day/emergency fund?

maz_hartley

I have some money set a side for rainy day/emergency fund. It’s just sat in a basic savings account.  Ideally it could do with gaining interest as well as easy access. Would I be better saving them both rainy day and emergency fund together or as separate pots. I probably won’t need any rainy day money for about 3years.

csgohan4

Premium bonds sound like a good start, 3 year fixed rate savings yields aren't great atm, but personal preference

d63

just to add that if you do opt for a fixed rate savings a/c choose a cash isa type. yes the rates are hopeless but in an emergency you can always get your money back albeit by incurring a penalty of some kind. shawbrook for example would be 180days on a 3-yr a/c @ 0.82% 

wiseonesomeofthetime

Depends on the size of your rainy day/emergency fund really.

I had £1,500 in Premium Bonds for 10 years in the early 2002-2012 and won only £25 in that time. Would have earned a lot more in savings accounts (then), however, I was lured by the prospect of winning that major prize

It may also depend if you have a credit card to pay for any emergencies with in the first place, as to which account would suit you best as some may take a few days for money to get to your current account.

I have a small sum with Atom, to which I have instant access.

Bulk of my Emergency Fund is among my Premium Bond holdings now as my savings with NS&I are more substantial now than they were a decade ago.

Good hunting.

Albermarle

I probably won’t need any rainy day money for about 3years.

The whole idea of rainy day money is that you do not know when you will need it !

I second the suggestion of Premium Bonds , unless the amount of money is quite small.

I had £1,500 in Premium Bonds for 10 years in the early 2002-2012 and won only £25 in that time

You must be either fantastically unlucky , or forgetful 

The odds of winning do vary in different periods , but with £1,500 for 10 years , you should have had about ten prizes in my estimation 

bostonerimus

As you don't know when an emergency or rainy day will happen easy immediate access to your money is more important than interest. 

jimjames

d63 said:

just to add that if you do opt for a fixed rate savings a/c choose a cash isa type. yes the rates are hopeless but in an emergency you can always get your money back albeit by incurring a penalty of some kind. shawbrook for example would be 180days on a 3-yr a/c @ 0.82% 

Not sure why you'd want to lock money away when you can get essentially the same return on instant access. Keep £5000 in a Halifax current account and get paid £5 per month which equates to just over 1%. Get 2% on £1000 in a Virgin money account or approx 0.75% in a Lloyds current account for £5000.

Lots of options depending how much the emergency pot is.

DireEmblem

As its an emergency fund, you want to make sure you have easy access to it, so I would spread it across a few institutions.

Should anything happen that you need access to the funds and one of the places you used has an 'IT outage', then you should hopefully be able to access the rest.

MaxiRobriguez

Albermarle said:

I probably won’t need any rainy day money for about 3years.

The whole idea of rainy day money is that you do not know when you will need it !

And to extend on this, if you "won't need it for 3 years" it means you've allocated this money already - ie, you don't currently have a rainy day fund.

wiseonesomeofthetime

Albermarle said:

I had £1,500 in Premium Bonds for 10 years in the early 2002-2012 and won only £25 in that time

You must be either fantastically unlucky , or forgetful:) 

The odds of winning do vary in different periods , but with £1,500 for 10 years , you should have had about ten prizes in my estimation 

Sadly not.

Winnings were autoinvested in new bonds.

Deposit £1500. Balance when boiler went £1525. No withdrawals in between. 
Definitely unlucky then.

But that's for another thread 😊

howard3844

In theory you should win on average 1% pa, therefore about 15 pa x 10 = £150. Saying that I think it is schewed to big prizes so I'd say the normal person would be lucky to get £50 over 10 years ??