Best place for an emergency fund

[Elfreako]

Hi everyone,

I have 3 months salary that I like to keep around, just in case I run into trouble. Currently it is in a Standard Bank account that earns 5% interest. With the latest news on rising inflation I would like to move this somewhere that earns a bit more. I have found a Money Market account that earns 6.33%.

Does anyone have any other suggestions?

The two big requirements are: 1. The money needs to be accessible immediately, 2. There needs to be very low risk as I might need this in an emergency.

 

[Dan C]

Money Market Call account is not bad as you can access your money at any time. So I will stick with that as you said, you do not want to take any risks.

 

[BlindMelonChitlin]

Tax free savings account?

 

[Swa]

Tax free savings account?

Bad idea as you can't redeposit money you take out and it's limited to R30k per annum.

 

[supersunbird]

Myself also not a fan of TFSA for cash savings, you have to have a lumpsum of over R400 000 just to earn enough interest to even go over the interest exemption of R23800 (or somesuch) that's not even TFSA related, so you already in a tax free space with regular cash savings.

Anyway, back to the topic, what I'd do it with my 3 months salary emergency fund, keep all in the best (aka most interest) money market account I can find.

 

[Hamster]

Tax free savings account?

Worst idea ever


Money market call (what I do at the moment). But since I have a credit card with fairly high limits and 50 odd days interest free a 7 day or even 32 day call account is what I'm looking at the moment. Higher interest rate.

 

[Chevron]

Hi everyone,

I have 3 months salary that I like to keep around, just in case I run into trouble. Currently it is in a Standard Bank account that earns 5% interest. With the latest news on rising inflation I would like to move this somewhere that earns a bit more. I have found a Money Market account that earns 6.33%.

Does anyone have any other suggestions?

The two big requirements are: 1. The money needs to be accessible immediately, 2. There needs to be very low risk as I might need this in an emergency.

I'd rather suggest you split the money up.

Leave 1 month's salary at 6.33% and get something else like a ETF or Unit trust for the rest. Money is usually accessible in a few days. So not completely immediate, but still quick.

 

[Hamster]

I'd rather suggest you split the money up.

Leave 1 month's salary at 6.33% and get something else like a ETF or Unit trust for the rest. Money is usually accessible in a few days. So not completely immediate, but still quick.

The problem with an ETF is that it is volatile by nature and that you may be forced to sell it at a crappy price when the scht hits the fan.

Good practice is to have 3-5 months worth of your living costs available and guaranteed. You should have this in place before investing in equities.

 

[mountainboy]

Park it in your bond if you have one, interest saved will beat interest earned.

Just ensure its a flexi type bond or similiar

 

[supersunbird]

Now I have even more of a dilemma, where to keep 6 months salary of emergency savings...

Worst idea ever

Money market call (what I do at the moment). But since I have a credit card with fairly high limits and 50 odd days interest free a 7 day or even 32 day call account is what I'm looking at the moment. Higher interest rate.

I have enough Credit Card limits to cover 4 months too.

So have you researched 7 day or 32 day call accounts yet? Who can I look at?

Otherwise I am thinking 2 months in a money market, 2 in Coronation Strategic Income and 2 in Coronation Global Strategic USD Income

 

[Chevron]

The problem with an ETF is that it is volatile by nature and that you may be forced to sell it at a crappy price when the scht hits the fan.

Good practice is to have 3-5 months worth of your living costs available and guaranteed. You should have this in place before investing in equities.

Yeah I prefer Unit Trusts as well, but know people prefer options so just included it. Up to him to decide which way to go.

 

[Hamster]

Now I have even more of a dilemma, where to keep 6 months salary of emergency savings...



I have enough Credit Card limits to cover 4 months too.

So have you researched 7 day or 32 day call accounts yet? Who can I look at?

Otherwise I am thinking 2 months in a money market, 2 in Coronation Strategic Income and 2 in Coronation Strategic Income Global Strategic USD Income

Well my main bank is FNB and I can quickly transfer between accounts without any hassle. If it wasn't for that I'd consider Capitec as they seem to have slightly higher interest rates.

The flexi bond idea mentioned above might be even better.

 

[Hamster]

Yeah I prefer Unit Trusts as well, but know people prefer options so just included it. Up to him to decide which way to go.

Well another option is Krugerrands I suppose

 

[InTheWild]

hi guys,

I'd be interested to know where everyone is stashing their emergency funds at the moment? I need to re-look at the options on where I save mine (currently in Capitec savings account with 5.40% interest). Looking for something a bit higher (>6.5%). Looks like a money market unit trust is the best route to go.

 

[Hamster]

hi guys,

I'd be interested to know where everyone is stashing their emergency funds at the moment? I need to re-look at the options on where I save mine (currently in Capitec savings account with 5.40% interest). Looking for something a bit higher (>6.5%). Looks like a money market unit trust is the best route to go.

https://www.fnb.co.za/invest/32-day-flexi-notice.html

It's "tiered interest" though so to reach the max amount of interest you are going to need more money saved in the account. Don't know what those tiers are right now but that's what I use.

EDIT:

R40 000 - R49 999 6.35%
R50 000 - R74 999 6.65%
R75 000 - R99 999 6.70%
R100 000 - R499 999 6.75%

You need R5,000,000+ to get 6.95% and I doubt anybody on this forum's emergency stash is that high

 

[Ecco]

Park it in your bond if you have one, interest saved will beat interest earned.

Just ensure its a flexi type bond or similiar

This sounds like the best plan

 

[InTheWild]

https://www.fnb.co.za/invest/32-day-flexi-notice.html

It's "tiered interest" though so to reach the max amount of interest you are going to need more money saved in the account. Don't know what those tiers are right now but that's what I use.

EDIT:

R40 000 - R49 999 6.35%
R50 000 - R74 999 6.65%
R75 000 - R99 999 6.70%
R100 000 - R499 999 6.75%

You need R5,000,000+ to get 6.95% and I doubt anybody on this forum's emergency stash is that high

thanks, yeah - that could work. I would get more than 6.5% if I look at the rates posted. And I guess 32 days is not bad with a CC on standby.

 

[backstreetboy]

hi guys,

I'd be interested to know where everyone is stashing their emergency funds at the moment? I need to re-look at the options on where I save mine (currently in Capitec savings account with 5.40% interest). Looking for something a bit higher (>6.5%). Looks like a money market unit trust is the best route to go.

Sygnia Skeleton Balanced 40 fund.

 

[f2wohf]

I put mine in a Nedbank 32Day Notice + a credit card on standby.

R250 - R999
Nominal p.a4.15%

R1 000 - R19 999
Nominal p.a6.10%

R20 000 - R49 999
Nominal p.a6.60%

R50 000 +
Nominal p.a7.10%

 

[Hamster]

Geez some of you guys...

Sygnia Skeleton Balanced 40 fund.

emergency funds