Should I keep my emergency fund in one place or keep them in multiple places?

Should I keep all my emergency funds in one place or in different places to earn higher interests?
Ideally, I am planning to park my emergency funds in three different places:

1) High savings account

2) SSB

3) Insurance savings account OR Cash management account (like Syfe Cash+)

Is it wise to keep the funds in different places? Because to keep in different places means I have to divide my emergency funds and earn lesser interests with the smaller amount as compared to when I keep all my funds in one place to earn high interests from the lump sum.

I know I have to keep emergency funds in places with high liquidity, hence I did a lot of research and chose (2) and (3) because of the higher liquidity, albeit still lower than (1).

What should I do?

Syfe

Discussion (10)

What are your thoughts?

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Niger's Tidebringer

19 Jul 2021

A single place would be easier for you to manage and withdraw. Imagine the trouble you have to go thru to withdraw when you need it within ~1-2 day

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Caleb Tan

18 Jul 2021

Hi V

Emergency fund, as the name implied is to serve the purpose of emergency. Earning interest will be out of the equation.

Allow me to share my recent two experiences that utilised emergency.

Case 1, a friend of mine suddenly needed $10k in the middle of the night but can return me when bank open the next day. Good thing I have my emergency fund to lend him and I guess his emergency fund did not meet his objective.

Case 2, I recently went for an operation which required about $50k. Although I had already prepared with insurance coverage, the hospital only willing to take risk for the first $30k and the rest I need to pay upfront first. The hospital will wait for insurance payment then reimburse me. That will be almost 2 months later. So, either you have cash or credit cards to tie over this situation.

You can still make your cash work hard though not much. I placed it with my DBS Multiplier account and you can instantly transfer to current account when in need. If done correctly, you can still achieve about 1% interest now. Not bad since we are prepared to have zero return.

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Bryan Chua

17 Jul 2021

I feel you! I currently split them into OCBC 360 and Singlife. Am also thinking if I should transfer the funds in Singlife into Syfe Cash+. But like what others have mentioned, emergency funds shouldn't be invested. Though Syfe Cash+ has a very low chance of losing your capital, there's still a risk. Unless you can have a long horizon to ride out the risks for Syfe Cash+, if your other emergency funds parked in safe places like banks are sufficient.

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Chris

17 Jul 2021

Not sure what exactly is this high savings account.. but e-fund should have ease of withdrawal without penalties. SSB if I understand, has a 2 to 3-week waiting period before money goes back to your bank account. Is that considered high liquidity? At end of the day, it also depends on the quantum of your e-fund. Not worth the effort to have separate pools should it be less than $60k.

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