There are many great options available to store your emergency fund, but there is only one hard and fast rule that you must stick by, if you are going to succeed in saving (and keeping) your emergency fund…

NEVER, I repeat NEVER, keep your emergency fund in your checking account.

The best place you could store your emergency fund, is any place that will prevent you from spending your emergency fund. This is the simplest of rules, but one of the most crucial–especially if you are like me, and have a tendency to spend what is available to you.

Bottom Line Up Front

The place you store your emergency fund should meet two criteria:

1. It is separate from your checking account
2. It is liquid, meaning you can easily access the money in the event of an emergency

If your emergency fund is stored in your checking account and easily accessed by using your debit card, it can be difficult to track how much progress you are making, and can be *accidentally* spent on “emergency” purchases like on Amazon or Target…

So where are the best options to store an emergency fund? The key to an emergency fund is to keep the funds liquid. This means that you can easily access these funds to either pull out cash or write a check for an immediate need, such as replacing a tire or getting a new part for the washing machine.

The three best options:

1. Keep the Fund in Cash

**This is for starter emergency funds of $1,000 or less only**

While doing this may make you feel like a doomsday-prepper, or a criminal on some television show hiding their money from the police, this really can be a great option if you can be sure that you will not spend the money on anything other than an emergency.

Keeping an emergency fund in cash can help you see exactly how much money you have, and you can easily access this in the event of an emergency.

2. General Savings Account

A more 21st century option for storing your emergency fund would be in a general savings account. If you have an account with USAA or Navy Federal, it is very easy to open a savings account online and place your desired emergency savings amount in this account.

If you go through another bank or credit union, you may need to go in-person to set up the account, but this is a very simple process, and many banks allow online access to these accounts once they are opened.

With a savings account, you can also directly deposit a certain amount of money from your paycheck each month while you are building up your emergency fund, and can easily transfer this to your checking account to either write a check or even use your debit card if an emergency arises.

3. Money Market Account (MMA)

The Money Market Account is my personal favorite because it meets all the criteria that I look for in storing money for my emergency fund.

The MMA can be set up through USAA and Navy Federal as well, and many banks allow you to open a MMA with them as well. While it does not earn a lot of interest (like you would through other investments), it does typically earn about 1% interest, which is more than you would earn by simply keeping the fund in cash.

The MMA is also a liquid fund (meaning you can take the money out at any time) that generally allows you to write checks directly from the account in the event of an emergency. It is separate from the checking account, so you will not inadvertently spend your emergency fund.

Bottom Line

All of these are great options that I personally recommend because they meet the criteria of storing an emergency fund:

1. It is separate from your checking account
2. It is liquid, meaning you can easily access the money in the event of an emergency