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Want easy access to your money? Suze Orman says it’s your only option

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This is advice to take.

Key points

  • Keeping money in a savings account could mean limiting its growth.
  • Despite this, the bank remains the best place for your short-term savings.

There’s a reason why people are often encouraged to open a brokerage account and invest their money. If you keep all your money hidden in a savings account, you will earn the interest paid by your bank. Sometimes this interest can be more generous than others. But at the end of the day, you can make your money work a lot more by investing it in assets like stocks and even bonds.

But while it’s okay to invest some of your money, it’s also important to give yourself easy access to some of your money. And so, when it comes to your emergency savings — money you might need without warning — financial guru Suze Orman insists banking is the only option you should consider.

Make sure your money is available

Investing silver carries a risk – that the value of your portfolio may fall during a market downturn. Or, you may choose to invest in a business that is not performing well, so that a $5,000 investment is only worth $3,500 a year later.

Investment values ​​may fluctuate frequently. And it’s not necessarily something to worry about on a day-to-day basis, especially if you’re investing for a distant milestone, like retirement.

At the same time, the money you have earmarked for emergencies needs to be more secure. You don’t want a situation where you need $4,000 to fix your car, but your $5,000 investment is now only worth $3,500, so you’re missing the amount you need.

That’s why your emergency fund must remain safe, solid and liquid. And that means sticking to a savings account, where deposits are FDIC-insured up to $250,000 per account holder.

As Orman recently said in a podcast, “You just want to know that [your money is] there for you and that you can do with it what you want when you want to do something with it. And so your only option is a savings account.”

How to choose the right savings account

By keeping your emergency fund in savings, you may be limiting its growth. But that’s okay, because the money you’ve earmarked for unexpected expenses isn’t money you should rely on to accumulate long-term wealth.

That said, there is no need to accept a lower interest rate on your money if there is a bank that pays more interest than your current one. So rather than settling, look around and see what different banks are paying.

You’ll often find that when it comes to getting the highest interest rate on your savings, online banking is the way to go. Online banks do not have the same operating costs as physical banks. As such, they are often able to pass savings on to consumers in the form of higher interest rates.

Investing money that you haven’t allocated for emergencies is definitely a good idea. But when it comes to your emergency reserve, play it safe and stick to a savings account, even if it means earning minimal interest for what could be years.

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