Where to keep my emergency fund

eskbanker

Baldytyke88 said:

I put £2k into premium bonds.

The effective interest rate on UK Premium Bonds is a variable, tax-free prize fund rate, currently 3.6% (as of August 2025)

'Effective' is doing a lot of heavy lifting there!  The nominal rate is 3.6% but this is skewed by the small number of large prizes, so the effective 'average luck' rate (based on median rather than mean) is lower, and for a holding of only £2K is a mere 2.5%.

LHW99

I would second putting a small amount into a savings account linked to your current account, and at the same insitution.

I have that with First Direct, and the money can move from one to the other almost instantaneously.

Putting a couple of hundred in an account like that, with the rest in an easy access feeder to help fill the regular saver may maximise both access and interest.

Ocelot

I had mine in a Lloyds Saver (as main a/c is same bank). However, since the rate went down to 1% I opened a Cahoot easy access saver, paying 4.4% currently. When you pay in it goes in straight away, rather than relying on someone to manually move it into your a/c the other end, as does Charter and Hodge.

masonic

Ocelot said:

I had mine in a Lloyds Saver (as main a/c is same bank). However, since the rate went down to 1% I opened a Cahoot easy access saver, paying 4.4% currently. When you pay in it goes in straight away, rather than relying on someone to manually move it into your a/c the other end, as does Charter and Hodge.

Yes, Cahoot uses Santander's systems, so payments in and out are direct Faster Payments, a close second to an internal transfer within the same bank.