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You already know that growing an emergency fund is a necessary evil.

It’s something that takes sacrifice, commitment, and time. Yet you’ll be thankful for it when the unexpected happens.

You’ve probably already started building one.

But do you have it stashed in the right place?

I didn’t. I built my emergency savings in a medium-risk mutual fund account. Then emergency struck: our cat swallowed a sewing needle. And then I had to wait on pins and needles for money from the account to transfer for his medical bills.

Not a great feeling.

What pushed me to build savings in a mutual fund?

The desire to see returns on my money and for it to be relatively hard to access. If it was readily available to me I figured I could easily spend it. But the attributes of a mutually fund worked against the purpose of my emergency savings – being there when I needed it.

It took almost a week to have access to the money I saved which is less than desirable in a pinch. Secondly, the value of a mutual fund is variable. Since I chose a medium-risk portfolio I had the potential to see return, but on the flip side the potential to lose some of my emergency money.

So where should we put an emergency fund? Here are 3 better options.

Places to Stash Your Cash

1. Traditional Savings Accounts

Traditional savings accounts are typically offered by banks in conjunction with your checking account. It’s not the right place to build long term savings because of its low interest rate.

However, for your emergency savings it’s easily accessible when you’re in a bind. And that will be of great benefit to you during emergencies.

2. High-Yield Savings

If you prefer an account that will bring you some notable interest a high-yield savings account is one you should consider. High-yield saving is offered by both brick-and-mortar banks and online banking services.

Choosing online savings will likely bring you more interest. Plus, there are plenty of accounts to choose from depending on your needs. There are few important variables to consider when choosing a high-yield fund like the initial deposit requirements, minimum balance, compounding interest method, and insurance coverage.

Most high-yield savings accounts carry insurance, but you should double check to be on the safe side. Insurance means you keep your money in case the financial institution goes out of business.

3. Money Market Accounts (MMA)

Money market accounts are another higher interest bearing account. But MMA accounts usually have a higher initial deposit requirement – between $1000-$3000. They may also limit the amount of withdrawals or checks you can write from the account each month.

That’s likely a good thing if you want to dissuade yourself from dipping into the fund. When considering a money market account check for maintenance fees as they can add up pretty quickly. Additionally, make sure your account includes insurance coverage to ensure your money stays safe.

Ready to stash your emergency savings?

You should reach out to your current financial institution to find out what deals they offer for traditional savings, high-yield savings, and money market accounts.

Bankrate.com is also a great tool to compare bank rates. It’s essentially a one stop shop for weighing your options when it comes to banking fees, interest rates, deposit restrictions, and much more.

Do you have any more advice on choosing an emergency savings vehicle? Share with us below!