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Laddered CDs work, as MrRational as noted, as do some online savings. In the past I kept money at Vanguard's money market as it sounds like you have, but at .01 to .02%, I might as well stuff the money under my mattress. For example, right now Discover Savings is paying 0.80% (I don't know if links are allowed, but I'll include them and we'll see)
Minimum is $500, you can transfer directly to your checking account and have the money there within a few days. As noted at the link, they allow 6 transfers per statement cycle (I believe that means "monthly"), so unless you get a LOT of emergencies all at once, you should be fine.
CapitalOne 360 (the new home of what used to be INGDirect) is paying 0.75% currently. Again, you can transfer funds online directly between there and a checking account, with transfers normally taking 2 business days. As with Discover, you are limited to 6 withdrawals a month, but again this should not be a problem given the goal of "emergency fund". https://home.capitalone360.com/online-savings-account
There are others out there (another I know of is Dollar Savings Direct, currently paying 0.55%). Given that 3 year Treasuries are only paying about 66 basis points annually (as I check the numbers for today, September 25), any online savings that pays more than that is an attractive option. Basically, you want easy access and no risk of loss (the online savings accounts are federally guaranteed to $250K IIRC), with as much interest as you can get. None of those options will make you rich, but getting an extra $75 annually on $10K of savings doesn't hurt.
I would go with Ally. Last time I checked, the interest rate was 0.85%. I use it separately from my other accounts. No complaints, quick transfers, and good customer service.
What is the purpose of laddered CDs considering the small interest rates?
I must not understand this.
1) CD's so the money is not immediately available to the poorly disciplined.
Too many will call a brake job an emergency vs laid off and the mortgage is due.
2) Laddered because even in the genuine "emergency" you shouldn't need it all at once.
Deal with your problems one fiscal quarter (or month) at a time.
3) Interest? Ha! Any return on anything like this today is gravy.
Keep saving and investing other money for growth/return; not the EF.
1) CD's so the money is not immediately available to the poorly disciplined.
Too many will call a brake job an emergency vs laid off and the mortgage is due.
2) Laddered because even in the genuine "emergency" you shouldn't need it all at once.
Deal with your problems one fiscal quarter (or month) at a time.
3) Interest? Ha! Any return on anything like this today is gravy.
Keep saving and investing other money for growth/return; not the EF.
Point number two-
Since the interest is so minimal why ladder it? Is it self discipline? You need money so don't dip into one big pot and be tempted to take more than you need, just take it from one of the smaller pots?
For the avg. person, worrying about interest rates with emergency funds is a waste of time. As long as it is available, safe and fully funded... that's more important than the interest rate.
Where should I put my emergency fund? Right now it is sitting in a near zero interest money market at Vanguard.
What do some of you do? CDs?
I have some in a credit union, and the remainder in an online bank.
You might try Ally Bank or FNBO Direct.
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