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Best location for emergency 3 month expenses

9 replies

Beesneeze82 · 15/03/2021 17:41

I've been saving each month into a regular savings account with the purpose of accumulating a 3 month expenses emergency fund. The money is locked away until the 12 month anniversary which is approaching soon. I can't decide where I should move this money when the regular saver automatically closes. I have another savings account but I do dip into this occasionally so I'd really like to keep this cash ( approx 3.5K) separately. I want to ringfence it so I'm not tempted by it but also it needs to be easy to access should an emergency occur and I need it!
Can anyone recommend a financial wrapper that is both easy, but not too easy, to get into to.

OP posts:
MrsAudreyShapiro · 15/03/2021 17:45

I keep mine in Premium Bonds. Easy to access and separate from my other accounts.

Beesneeze82 · 15/03/2021 17:52

Ahh see I was wondering about premium bonds but I haven't investigated yet.

OP posts:
imyournextdoorneighbour · 15/03/2021 17:55

Premium bonds for md too.

nannynick · 15/03/2021 17:56

Personally I keep a couple of thousand instantly accessible via a debit card, so the money sits in my bank account.
I use NS&I premium bonds for the remainder.
Nothing gives a good return on cash, so you want safety and with premium bonds if you get a winning then that's a bonus.

BarbaraofSeville · 16/03/2021 05:45

I'd probably go with premium bonds too. It needs to be cash or PBs, and the return on both will mostly likely be very little, but that's not the point, you need some ready cash available for broken boiler, car repairs, etc etc.

Plus with PBs, it's a bit more faffy getting your money back, you have to request it and it takes a few days. If you have a credit card with a decent limit, you could always pay for your emergency on a credit card and then use the PB money to pay the credit card off when the bill comes.

The most you can get with a savings account is 0.5% or less than £20 per year.

Statistically you'll win maybe once a year with PBs. There's a good chance you'll win nothing or maybe one or two prizes in a few years. Of course you could win more.

So if you're comfortable gambling a guaranteed £17.50 in interest each year, with the added bonus of putting a small hurdle in front of 'accidentally' spending your savings on an 'emergency' holiday chance would be a fine thing then there's your answer.

As it happens, I've given up with regular savings accounts, after running a couple a year for the last five years, because I worked out that, even by putting the maximum amount allowed in the best paying account, you get about £15 a year in interest and I couldn't be arsed setting it up, tying the money up and then dealing with the uncertainty about what happens at the end - one bank I use automatically lets it run for years and years, the other you have to reapply and I could never remember what was going to happen.

Beesneeze82 · 16/03/2021 16:20

Thanks for all the responses. It does sound like PB is the one!

OP posts:
murbblurb · 16/03/2021 17:00

that's helpful that someone has done the maths which really brings home how bad savings rates are. They've been below inflation for a decade but it is clear that the government wants us to piss our money away. All savings are now losing value by real inflation which is over 3% per annum.

of course if you do spend all your money, good luck in getting any help...

premium bonds are totally safe and could win you a bit. Perhaps a month's money somewhere else where it is easy to access. Online banking is always a bit of a faff (as it should be) so won't fall straight out of your wallet.

DawnAnn · 16/03/2021 21:02

Premium bonds here too. I just started moving my savings over to them recently though, so no wins yet.

StephenBelafonte · 16/03/2021 21:11

Premium bonds.

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