Updated: Oct 11, 2022
Hey, it’s Jon for today’s Didactic Minute. Today, I want to tell you where to find the best interest rates on savings accounts for that emergency fund. Now we’ve taught you before, a good emergency fund has three to six months of your fixed expenses, okay. So if you don’t know what that number is, do your budget, figure that out what’s three to six months of your fixed expenses.
Now we’ve always told you that a savings account is the best place to put it. It still is. You don’t want to put it in an investment account where it’s going to fluctuate and go up and down when potentially you may need it and the market’s down and you got less money than you need.
A savings account is still good. The money is still guaranteed by the federal government, but interest rates are not nearly what they were even a couple of years ago. We used to be able to find 2, 2-1/2, maybe 3 percent in a high-yield savings account typically at online banks. But if today, you go to a place like Nerdwallet or Bankrate, these are going to be websites that you can go to to find the best interest rates on a savings account. But today, you’re not going to find much higher than half a percent, maybe 1 percent. So it’s still decent. That’s still going to be the best place for your emergency fund so go there, get the three to six months in there.
This is Jon with today’s Didactic Minute. We’ll see you next time.