Why Have an Emergency Fund in the First Place?
An emergency fund is like a financial cushion—it softens the blow when life throws you something unexpected. Here’s what it can help with:
-
- Job loss or reduced hours
- Medical emergencies
- Car repairs or home fixes
- Family emergencies
- Sudden travel needs
Having one means you won’t need to rely on credit cards or personal loans when something urgent comes up. Instead, you can handle the expense and move on—with less stress and more peace of mind.
How Much Should You Save?
A good rule of thumb is to aim for 3–6 months’ worth of essential expenses. That includes your mortgage or rent, groceries, utilities, insurance, and any must-pay monthly bills. Start small if that feels overwhelming—even $500 to $1,000 can make a big difference in a pinch.
How to Start Saving for an Emergency Fund
You don’t need to save it all at once. Here are a few easy ways to start building your fund:
-
- Set up automatic transfers from your checking to your savings account each payday
-
- Use windfalls like tax refunds or work bonuses to give your emergency fund a boost
- Cut back temporarily on non-essentials (like subscriptions or takeout) and redirect that money into savings
- Track your spending to see where you can free up cash
At AbbyBank, we make it easy to transfer money between accounts and track your progress with online and mobile banking tools that help you stay on target.
Where Should You Keep Your Emergency Fund?
Your emergency fund should be safe, easy to access, and separate from your everyday-spending money. Let’s look at a few smart options:
1. Savings Account
This is one of the most popular choices. Savings accounts are safe, easy to access, and separate from your everyday spending—making them an ideal spot to set aside funds for the unexpected.
Pro tip: At AbbyBank, our Savings Account earns competitive interest on balances starting at just $100, helping your money grow while staying secure. For those with larger balances, our Savings Plus account provides an opportunity to earn even more interest, giving your savings an extra boost. Both options offer peace of mind and quick access when you need it most.
2. Money Market Account
Want the best of both worlds—higher interest and flexibility? A Money Market Account could be the way to go. You’ll earn tiered interest on higher balances and still have access to your money with checks or a debit card if needed.
AbbyBank’s Money Market Accounts start earning interest with just a $1,000 balance, and you can manage everything with eBanking and Mobile Banking.
3. Certificate of Deposit (CD)
If you already have a decent emergency fund and want to put a portion somewhere it can earn more, consider a CD. Just remember—CDs require you to lock your money in for a set term, so they’re better for secondary emergency savings, not your main go-to cash.
We offer a variety of CD terms and competitive rates to meet your savings goals.
4. Separate Savings Account
Already have a savings account with AbbyBank? Open a second one just for emergencies. Keeping your emergency fund separate from your regular savings can help you avoid spending it on non-essentials.
You can name the account something like “Rainy Day Fund” to keep your goal front and center.
Take this personalized quiz on our website to find the right account.
5. Holiday Savings Account
Looking for a built-in way to keep your hands off your emergency savings until you really need it? Our Holiday Savings Account might help. It earns interest and has no minimum balance, but funds aren’t available until October—perfect for those who want to save with less temptation to spend.
Ready to Build Your Emergency Fund?
Don’t wait for a “what if” moment to start saving. Whether you’re just getting started or want to make the most of your emergency savings, AbbyBank has the right account options to fit your needs.
Visit your local branch or open an account online to take the first step toward financial peace of mind.
Final Thoughts
An emergency fund is one of the smartest ways to protect your future. It’s not about if you’ll need it—it’s about when. So don’t wait until life throws you a curveball. Start small, stay consistent, and know that AbbyBank is here to support you every step of the way.
