I don't think the recommendation of "3-6 months of income in a quickly accessible emergency fund" scales well. If you don't make much and could need to buy another beater car after your current one inevitably dies, sure. But if you make significantly more, to the point where you max out your retirement accounts, what's wrong with using a brokerage account for savings? I can have that money ready to spend in 7 business days and can use my credit card and checking account in the meantime. Yeah, risk, blah-blah-blah, but going with a guaranteed almost-zero is a suckers' game while the line is still generally going up.
brokerage go up and down. meanwhile, HYSAs are around 5% and if the deposit is big enough, there are CDs even with near zero penalty for early withdrawal. it's not recommended to keep an emergency fund in any vehicle which can go down, because usually line go down comes with widespread job loss,.like in '07
the point of the fund at that level isn't replacing an unreliable car. those people drive nice cars with warranties and insurance. for someone pulling down $150k, needing a new car is barely a problem. the fund is for actual cataatrophe. generally, it's for losing a job and being able to float for 90+ days, stay current on all loans, and keep the family on COBRA and the same network while they decide how to shift benefits around and be somewhat selective about the next job, instead of having to take whatever comes.
Sorry, I wasn't aware of HYSAs until now; I was speaking based on the bad rates I was seeing when I decided not to mess with savings accounts anymore. Thanks for the info.
I don't think the recommendation of "3-6 months of income in a quickly accessible emergency fund" scales well. If you don't make much and could need to buy another beater car after your current one inevitably dies, sure. But if you make significantly more, to the point where you max out your retirement accounts, what's wrong with using a brokerage account for savings? I can have that money ready to spend in 7 business days and can use my credit card and checking account in the meantime. Yeah, risk, blah-blah-blah, but going with a guaranteed almost-zero is a suckers' game while the line is still generally going up.
brokerage go up and down. meanwhile, HYSAs are around 5% and if the deposit is big enough, there are CDs even with near zero penalty for early withdrawal. it's not recommended to keep an emergency fund in any vehicle which can go down, because usually line go down comes with widespread job loss,.like in '07
the point of the fund at that level isn't replacing an unreliable car. those people drive nice cars with warranties and insurance. for someone pulling down $150k, needing a new car is barely a problem. the fund is for actual cataatrophe. generally, it's for losing a job and being able to float for 90+ days, stay current on all loans, and keep the family on COBRA and the same network while they decide how to shift benefits around and be somewhat selective about the next job, instead of having to take whatever comes.
Sorry, I wasn't aware of HYSAs until now; I was speaking based on the bad rates I was seeing when I decided not to mess with savings accounts anymore. Thanks for the info.