Best Savings Accounts for Your Emergency Fund

You understand the vital role that an emergency fund plays in your finances.

It can turn an unexpected expense into a small financial setback, as opposed to an overwhelming debt burden.

Now, as you aim to establish an emergency fund properly, you’ll want to use the right savings account that offers a great interest rate (to grow your money faster) without any outrageous fees.

Find out:

  • The best savings accounts for an emergency fund
  • What factors to consider in your decision
  • How much to keep in an emergency fund
  • What is a “financial emergency”

The Best Savings Accounts for Your Emergency Fund

Synchrony Bank – High Yield Savings

The Synchrony Bank High Yield Savings account is a great all-around savings account for an emergency fund because it has no monthly fee and a highly competitive savings rate (with no minimum balance required to earn this APY).

The best part:

It comes with an optional ATM card that you can use at any ATM. Synchrony Bank does not charge an ATM fee, but the ATM owner may charge a fee.

Every month, the online bank will refund up to $5 in such fees charged by domestic ATMs.

Ally Bank – Online Savings

Ally Bank is a trusted online bank that offers an online savings account with no monthly fee and a great savings rate.

Most notable is the bank’s user-friendly mobile banking app, which allows customers to access their accounts with great ease.

You can view balance, initiate transfers, and deposit checks.

Interestingly, Ally Bank even allows you to request a check as a method to withdraw your funds.

How to Choose an Emergency Fund Savings Account

The truth is:

Any savings account can be used for an emergency fund.

After all, you just need a place to hold your money — a place that is relatively easy to access when you need to do so.

However, there are small features that could mean greater convenience in the event that you’re faced with a major financial emergency.

ATM card access

In the instances when you need cash immediately, it’s nice to be able to use an ATM.

But, not all savings accounts come with a linked ATM card — meaning you have no way to withdraw cash.

To be fair, you might not want such card access because it increases the likelihood that you’ll use the money on non-essential spending.

If you do prefer the ability to access an ATM for a financial emergency, you should look for a savings account that offers this feature.

The downsides:

Usually, there are ATM withdrawal limits.

For example, the maximum that you could take out at an ATM is $1,000 per day.

So, if a pressing financial emergency requires more than the limit, you’ll have to find other ways to come up with the additional cash on your own.

Additionally, watch out for ATM fees.

ATM transactions fees are charged when you use an ATM that is out of the bank’s network.

To make matters worse:

The operator/owner of the ATM will also impose a surcharge. So, you’re paying a fee to your bank and a fee to the owner of the ATM. Such a transaction could cost more than $5.

Luckily, in a true emergency, this cost won’t seem like a big deal. What matters most is that you get the cash that you need at that very moment.

Mobile banking apps

While not a necessity, mobile banking apps provide a bit of added convenience when you’re in a financial crunch.

They’ll be most useful when you’re on the go and want easy access to your savings account.

This way, you can initiate a transfer at a moment’s notice — when you cannot get to your computer.

Moreover, it is very likely that the bank will offer mobile check deposit, which makes it easier for you to fund your account.

No monthly fee

You cannot be paying a monthly fee on a savings account, regardless of whether it is used for an emergency fund or not.


It doesn’t make sense for you to lose money in an account that’s designed to build savings.

Savings accounts from traditional banks, especially those that operate large branch and ATM networks, will likely come with a monthly fee. Usually, this fee is waived by meeting certain requirements, such as maintain a minimum balance, post monthly deposits, set up recurring transfers, etc.

Fortunately, many online banks offer savings accounts that don’t have any monthly fee.


Simply, online banks don’t pay the operating expenses of running physical locations. So, customers tend to have fewer fees to worry about.

That leads us to the next factor to consider…

Interest rates

Your emergency fund can do more than just sit there waiting for its time to be useful.

By choosing a savings account with a strong savings rate, your emergency fund can actually grow very quickly.

Essentially, you’re passing up free money if you stick your money in a savings account with a terrible savings rate.

How Much Should You Keep for a Rainy Day?


There is no correct answer to this question.

The right size for any emergency fund varies based on each person and his or her unique circumstances.

The general rule is:

Keep 3 to 6 months of living expenses.

Living expenses include the costs of securing shelter (i.e., rent or mortgage payment), essential utilities (not cable TV), food, and work-related transportation.

So, let’s say these are your bare essentials:

  • Rent: $1,000
  • Utilities: $200
  • Food: $200
  • Transportation: $100

Your monthly expenses are $1,500. So, your emergency fund should range from $4,500 to $9,000.


To those who have trouble accumulating savings, 3 to 6 months worth of living expenses is a lot.

But, you don’t need to come up with that right away.

A good goal to start with:

A $1,000 emergency fund.

Then, slowly build it up when you can.

What is Considered a Financial Emergency?

Once you’ve created an emergency fund, you may wonder when it would be most appropriate to use it.

Far too often do people make the mistake of tapping these savings for spending that is not a true emergency.

For example, you should not dip into your emergency savings because you’ve come across the biggest retail-shopping deal of a lifetime. The fear of missing out on a huge discount is not an emergency.

It all comes down to four (4) questions to ask yourself:

  • Are you in danger of losing shelter?
  • Are you unable to get to work and earn income?
  • Is your immediate health in jeopardy?
  • Did you lose your job?


You need to be able to have a roof over your head and utilities running to survive on a daily basis.

If your home needs a costly repair now (i.e., a tree fell on your roof), use your emergency fund.


If you can’t get to work, you can’t earn income.

When your car breaks down unexpectedly and it is needed for your commute to and from work, you need to get it fixed as soon as possible.

On the other hand, if you don’t use the car for work and there’s an issue, build separate savings for that repair.


If you think about it, it also affects your ability to bring in money. When you’re sick, you can’t work.

But, generally:

Your health is of utmost importance.

Any medical emergency is also an immediate financial emergency.

Job loss

This is the more common purpose of an emergency. It is also the reason why the general suggestion recommends 3 to 6 months of living expenses.

An emergency fund can allow you to survive when you’re unemployed. Additionally, you have time to find a new job that is a good fit, as opposed to jumping onto the first opportunity (which may not be the best one for you).

You don’t always choose to be unemployed. Job loss means an instant loss of income that could put your entire life in danger.

So, this is a good reason for using your emergency fund.



The best savings account for an emergency fund is that one that actually allows you to establish an emergency fund successfully.

Many savings accounts will do the trick.

Some are just slightly better than others. Cut out the monthly fees and choose a higher interest rate for an account that you don’t have to worry about — while also see your money grow.

Hopefully, you never have to use your emergency fund.

But, you can’t argue against the peace of mind from having one.

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