Emergency Fund: What It Is and How to Build One

Having an emergency savings account is a must for everyone; regardless of living situation or income. Putting some money aside for emergencies can offer peace of mind in times of financial crisis, and help cover things when regular income is sparse. As to where to put your emergency fund, that’s up to you, but there are better options than just stuffing it under your mattress.

What is an emergency fund?

An emergency fund is there to help cover unexpected events that would majorly disrupt your finances. Having an emergency fund can help you avoid having to borrow money in times of financial struggles and keep your living expenses covered until you’re back on your feet financially.

Things that you can use your emergency fund for include job loss, unexpected medical bills, home repairs that can’t wait or even urgent pet care.

Emergency funds are different from sinking funds in that a sinking fund is money you put away for expected upcoming expenses like vacations or Christmas gifts.

How much should my emergency fund be?

It’s recommended to have at least three to six months of monthly expenses saved for an emergency fund.

Since everyone’s expenses are different, your ideal emergency fund size will be unique. Factor in your housing, utilities, loans, groceries, transportation and other essentials you pay every month. The average emergency fund is $17,544, according to Finder’s Consumer Confidence Index.

If you don’t have an emergency fund — and 55% of Americans say they don’t — then start small. Aim to tuck away at least $1,000 somewhere safe and keep it growing from there. While $1,000 may not cover three months of living expenses for most people, it could help with a rent or mortgage payment, car troubles or a week of temporarily reduced income.

Where should I keep my emergency fund?

We won’t tell you to remove your hidden cash from the rafters, but we will say that one of the better places to keep your emergency fund is in an insured deposit account, such as a high-yield savings account. We asked over 8,000 Americans where they put their emergency fund, and 56% reported a savings account, and 20% said it’s in cash.

Unlike a piggy bank, keeping your emergency fund in an interest-bearing deposit account puts your money to work thanks to compound interest and high-yield rates. It also gives you more access to your money when you’re not home, grows your balance over time, and cash in deposit accounts are protected under FDIC insurance.

Some great places to put your emergency fund include:

• High-yield savings account. These top-earning savings accounts can help your funds grow passively. Savings accounts with high rates can also help your money battle inflation, help you meet your savings goals faster and keep your funds safe. However, most savings accounts won’t come with an ATM card, so you may need to visit a branch or transfer funds to your checking account to access your cash in an emergency.
• Money market account (MMA). An MMA is a deposit account that works like a savings account but with more access to your funds through checkwriting privileges or a debit card. Compared to a checking account, MMAs tend to offer much higher yields and might limit you to six monthly withdrawals.
• High-yield checking accounts. For the most access to your funds, high-yield checking accounts (HYCAs) come with a debit card and unlimited transactions. With a high rate, the funds in a HYCA can passively grow, and you’ll have easy access to your cash in an emergency. However, checking accounts aren’t the best option for your savings, since you may be tempted to spend it. Plus, they often come with stringent requirements to start earning interest.

Top high-yield accounts for emergency funds

Consider stashing away emergency funds in a high-yield savings or money market account like these to maximize your savings.

Up to 4.30% APY for 6 months

SoFi Checking and Savings

Go to site

on SoFi®'s secure site

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• Up to 4.00% APY on savings for 6 months and up to 3.30% APY after, with eligible requirements.
• Earn $50 or $300 when you sign up and set up eligible direct deposit
• $0 monthly or overdraft fees
• Member FDIC

Earn 3.95% APY

Centier bank HYSA through Raisin

Go to site

on Raisin's secure site

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• 3.95% APY exclusive through Raisin
• $0 monthly fees
• US-based customer service
• Up to $1,500 bonus for new customers with qualifying deposits using promo code FRESHSTART. T&C apply.

3.3% APY Cash Account

Public High-Yield Cash Account

Go to site

on Public Invest's secure site

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• Earn 3.3% APY on all balances
• $0 monthly fees
• Unlimited transfers and withdrawals
• Up to $5M FDIC insurance coverage

• SoFi terms and conditions

  New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $300 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 12/31/2026. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Eligible Direct Deposit can earn 3.30% annual percentage yield (APY) on savings balances (including Vaults)and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.30% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
  
  Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet
  
  We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
  
  SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.
  
  We’ve partnered with Allpoint to provide you with ATM access at any of the 55,000+ ATMs within the Allpoint network. You will not be charged a fee when using an in-network ATM, however, third-party fees may be incurred when using out-of-network ATMs. SoFi’s ATM policies are subject to change at our discretion at any time.
  
  Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.
  
  Overdraft Coverage is a feature automatically offered to SoFi Checking and Savings account holders who receive at least $1,000 or more in Eligible Direct Deposits within a rolling 31 calendar day period on a recurring basis. Eligible Direct Deposit is defined on the SoFi Bank Rate Sheet, available at https://www.sofi.com/legal/banking-rate-sheet. Members enrolled in Overdraft Coverage may be covered for up to $50 in negative balances on SoFi Bank debit card purchases only. Overdraft Coverage does not apply to P2P transfers, bill payments, checks, or other non-debit card transactions. Members with a prior history of unpaid negative balances are not eligible for Overdraft Coverage. Eligibility for Overdraft Coverage is determined by SoFi Bank in its sole discretion. Members can check their enrollment status, if eligible, at any time by logging into their account through the SoFi app or on the SoFi website.
  
  Earn up to 4.00% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.70% APY Boost (added to the 3.30% APY as of 3/31/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at sofi.com/banking#2. SoFi Bank, N.A. Member FDIC.

Our expert says: Expert tip: Choose an accessible savings account

"While more restrictive accounts, like CDs and Roth IRAs, may offer higher interest rates to grow your money, they charge a penalty if you need to access your money in an emergency. Weigh the pros and cons before locking your money away. Choosing a more accessible account like a high-yield savings account or money market savings account gives you faster access to your money during an emergency — especially if it comes with a debit or ATM card."

Alexa Serrano Cruz

Lead Editor, Personal Finance

3 steps to build an emergency fund

Growing a full emergency fund will take time; don’t expect it to meet your ultimate goal fast.

1. Pick a goal.
   If you’re just starting your emergency fund, set a smaller goal of $500 or $1,000. Once you get there, you can set a higher goal of three to six months of expenses, depending on your needs.
2. Calculate your expenses.
   You won’t know how much you’ll need to save each month for your emergency fund until you create a budget to get a picture of your spending habits. Add up all your regular, essential monthly expenses to give you a baseline goal.
3. Decide where to keep your money.
   Factor accessibility, fees and interest when comparing your options. For example, savings accounts can offer ATM cards and ACH transfers for easy access to funds when you need them, but they may not earn the most compared to other options. CDs can offer stronger APYs than savings accounts, but you can’t withdraw funds early without facing early penalty fees.

How to choose an emergency fund account

Consider these five factors when comparing accounts:

• Cost. Not all accounts are free to open and maintain. Consider free accounts so your emergency fund doesn’t get chipped away by monthly fees.
• Access. Choose an account that gives you easy access to your funds through a debit card, ATM card, transfers or checks.
• APY. The higher the APY, the more you can earn over time. Compare an account’s interest rate against the FDIC’s current national average, which is currently 0.38% for savings accounts, 0.57% for MMAs and 0.07% for interest checking⁽¹⁾.
• Deposits and withdrawals. Check that the account makes withdrawals easy. For example, some savings accounts may limit you to six monthly transactions.
• Safety. Make sure the account you open is at an NCUA- or FDIC-insured bank.

Bottom line

An emergency fund helps you prepare for the unexpected and tackle surprise expenses head-on without jeopardizing your financial health. There are many different accounts to choose from, and whether you choose to keep your money in one or spread across multiple accounts is completely up to you.

The key is to keep your emergency savings someplace secure and accessible, and ideally, a savings account that can keep your funds growing.

To make sure you get accurate and helpful information, this guide has been edited by Holly Jennings as part of our fact-checking process.

Written by

Bethany Hickey

Banking editor

Bethany Hickey is the banking editor and personal finance expert at Finder, specializing in banking, lending, insurance, and crypto. Bethany’s expertise in personal finance has garnered recognition from esteemed media outlets, such as Nasdaq, MSN, Yahoo Finance, GOBankingRates, SuperMoney, AOL and Newsweek. Her articles offer practical financial strategies to Americans, empowering them to make decisions that meet their financial goals. Her past work includes articles on generational spending and saving habits, lending, budgeting and managing debt. Before joining Finder, she was a content manager where she wrote hundreds of articles and news pieces on auto financing and credit repair for CarsDirect, Auto Credit Express and The Car Connection, among others. Bethany holds a BA in English from the University of Michigan-Flint, and was poetry editor for the university’s Qua Literary and Fine Arts Magazine. See full bio

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Bethany has written 448 Finder guides across topics including:

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