I presently receive roughly 5.25% income on my emergency fund, which I maintain in money market products. As long as interest rates are higher than 4.0%, I believe money markets to be intriguing. However, if rates decline, I feel that there may be alternative chances that I am unaware of.
Do you have any other plans for where you might put your emergency fund now that interest rates are starting to decrease in the upcoming days, weeks, and months?
I am not concerned about chasing rates because I’m holding mine in 1.3% fixed rate I bonds.
There is also the advantage of not realizing the gains on the I-bonds until you sell them, unlike with a money market or high-yield savings account. I agree that keeping it in I-bonds is a good choice.
It will hover around 4% and then 3% for some time. You maintain the money where it is right now, regardless of how low it drops. Where can you park your money and get better rate and be able to use it right away?
I have a line of credit secured by my portfolio for my emergency funds, in addition to the cash currently in my bank account. That’s more than enough to meet my needs.
I can use margin when I have enough available on my credit cards, which I don’t use much and keep open, but I can also always take some profits if I need more money.
We keep all our cash accounts in money market funds and have no plans to change those positions, even if rates drop to 0.
Put it out of your mind and switch to a CD ladder. Oh-sh!t funds are a guaranteed asset, not an investment, they are there for emergencies and to avoid losing too much value along the way.
I invested my money in snsxx since it has no state taxes and an ATM fee just above 5%. It would be problematic if the government went into default on its debt, but in such case, our issues would be far more serious.
My emergency fund needs to be liquid and readily accessible for emergencies. Therefore, I will keep it in money market funds or short-term Treasuries, even if rates decrease.
I have about $300,000 that I will move to T-bills, to be honest. I have been investing large sums in CDs for various promotions, typically for 6 to 9 months.