How to keep your emergency fund liquid
Having an emergency fund to fall back on could keep you in good financial standing when sudden and unexpected costs occur. Ideally you would also like this money to grow; however, you need to ensure that this fund is quickly and easily accessible when you need it.
What does liquid / liquidity mean in financial terms?
Keeping your savings liquid means you can access your funds immediately without facing penalties such as early withdrawal fees.
Let’s look at where to keep your emergency fund liquid while earning interest
You want to ensure that you build your emergency fund to become a substantial amount. This could take time and consistent saving. For example, accumulating 3 months’ salary in savings doesn’t happen overnight.
For that reason, you not only want to consistently contribute to your savings, but you want to have your money work harder and passively grow by earning interest.
However, higher-yield savings and investment accounts often only provide limited access or withdrawal limits/penalties. Investments such as assets or bonds may take time to sell, and investing in stocks could be too volatile.
Therefore, it’s important to choose an account that’s balanced in terms of liquidity, security and growth and allows you to make deposits at any time.
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TOP TIP Keep your emergency fund separate to your regular savings and investments. You want to be able to access this money at any time, but not all the time. |
How to invest your emergency savings
A PureSave Account lets you save money and earn competitive interest rates while enjoying the flexibility of drawing/transacting from it whenever the need arises, giving you the financial security that your money is safe and will grow (based on your account balance), as well as the comfort that you can access and use your money whenever you want.
If you’ve already got some savings, you can boost it by putting it in a MoneyMarket Call investment account that lets you earn competitive interest but also lets you add to and withdraw your money whenever you need to.
Disclaimer: This article is solely intended for information. It does not constitute financial, tax or investment advice or recommendation. Please speak to a financial advisor or registered financial professional before making any financial decision(s).
Standard Bank, its subsidiaries or holding company, or any subsidiary of the holding company and all of its subsidiaries make no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information provided in this article or that it is free from errors or omissions.
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