Emergency fund - real world examples

El_Torro

Every now and then I take a look at my emergency fund and change the accounts that make it up. Some people like to have it all in one place, others don't mind having more accounts to maximise the interest they earn. Personally I don't mind having various accounts if it means getting more interest. I have also added new current accounts to my portfolio, partly to be able to use my debit card fee free abroad, but also because the trend of people having their current accounts temporarily suspended seems to be on the rise. If this happens to me it will be nice to have a backup. 

What I'd like to see in this thread is examples of people's emergency funds. I'll go first, all interest rates are quoted in AER:

Club Lloyds Current Account - £2,000. Interest rate 1.5%
Barclays Current Account - £100. Interest rate 0%
Barclays Rainy Day Saver - £3,000. Interest rate 5.12%
First Direct Current Account - £100. Interest rate 0%
Kroo Current Account - £500. Interest rate 4.35%

The rest of my emergency fund is in Premium Bonds.

I have two monthly savers, 1 with Club Lloyds and the other with First Direct. I don't count this money as part of my emergency fund, I have them because I am currently saving money to make a big overpayment into my mortgages when the fixed rates come to an end in 18 months time. When the monthly savers mature I'll just put the money into Premium Bonds until the time comes to make the overpayment.

This tax year I should earn about £494 in taxable interest. Since I am a higher rate tax payer I don't want to earn more interest, which is why the rest of my emergency fund is in Premium Bonds. So far this year I have made a return of over 4% on my Premium Bonds (tax free). 


Would be good to see what other setups are out there, and why you decided this setup to achieve your goals. 

Oh, and if I anyone just wants to go on about how emergency funds aren't necessary then feel free. Not really the purpose of this thread though. 

la531983

Why are you keeping two grand in an account paying a paltry 1.5%, is that a condition of said account? 

mebu60

I just keep a back-up £500 in the Santander EA Saver (4.05%) as my main current accounts are Santander. 

If going abroad I will temporarily pop £500 in my Virgin Money M Plus current account (2.0%) as an additional back-up.

The above are primarily for a cash emergency. Generally I would expect to use a credit card for emergencies. Which would be paid off when the account was due using funds from my lowest rate EA savings account if unable to cover from income at that time. 

El_Torro

la531983 said:

Why are you keeping two grand in an account paying a paltry 1.5%, is that a condition of said account? 

I've had a current account with Lloyds since I was a teenager. Almost all of my direct debits come out of that account, which is why I keep the balance relatively high. I do make use of the credit card (comes with cashback) and the Club Lloyds Monthly Saver, so I do benefit from some perks. Financially speaking it would probably make sense to move most of my direct debits to Kroo and have a bigger balance there. I could then keep the Club Lloyds current account with a smaller balance.

I am also trying to strike a balance between maximising interest and keeping it simple. If I was trying to eek out every penny I could move money between my Barclays Rainy Day Saver, Club Lloyds account and Kroo account regularly. 

Aminatidi

Usually anything from £3-8K in my current account and £20K in the "savings" account at the bank as "sleep at night" money.

I really want to move most of that £20K somewhere else.

subjecttocontract

la531983 said:

Why are you keeping two grand in an account paying a paltry 1.5%, is that a condition of said account? 

You have to understand that everyone here is different. I like to keep a lot more than that in my main current account but then I have expensive tastes.

elsien

I don’t have a specific emergency fund as  such. I have some easy access saving accounts which are for  specific parts of the budget to such as my car fund and  my holiday fund.
 I keep some sloshing around in my current account as my emergency cash fund – it doesn’t get any interest, but I don’t care, I’d rather have it there just in case.
The rest gets moved over into another account but that’s a combination of emergency fund and longer term savings that I don’t want to stash in a stocks/shares or fixed rate bonds just at the moment.
Yes I could probably get more interest sending it back and fore between different accounts but it’s too much faff for me keeping an eye on it at the moment. I have other priorities.

parchedpeas

Halifax and Club Lloyds Regular Savers are instant access if required, so I fill them up too. The rest is in Santander Edge Saver and Barclays Rainy Day, and Tandem with the top-up bonus.

Pretty much all of these give near instant access, and all are 5% aer or more.

Bostonerimus1

I consider an emergency fund to be instant access and essentially cash. Until recently my emergency fund was all in cash in my bank accounts as interest rates were so low. I have recently moved some cash to a Money Market Fund in my general investment account as it's getting 5% interest now and I can get it transferred to my bank account in two days.

Money Market Fund $100k
Bank accounts $40k

I use the bank account for general spending and like to keep about a year's worth of spending in there and enough for large purchases and of course emergencies, ease of access is important.

masonic

For me, the front line is a couple of credit cards. Beyond that, enough in an easy access account (currently Tandem @ 5%) for a few months spending, plus a ladder of regular savers and fixed term accounts maturing at regular intervals.

fluffpig

I split my emergency funds as follows

£1500 in Nationwide instant access saver 3.25% (general emergencies)
£5000 in Nationwide triple access 4.25% (this is a rolling pot for home/garden improvements) 
£10'000 in a money market fund ( only for if the SHTF )

I only keep enough in the current account to cover the Direct Debits plus about £200 as a buffer

The rest goes into global all cap ISA or SIPP