New to the forum, but interested in some advice on what to do with out emergency savings fund. I'm 30 years old and been married 1 year. We've built up a $20k emergency fund that I'd like to keep safe for a rainy day (layoff, medical expenses, etc.).

We currently just have the money in our M&T savings account that is linked to our free checking. I don't know the interest rate, but it might as well be 0%.

I'm wondering what other people have done with emergency funds? I feel that keeping it in our normal savings account is wasting potential investment money. Should I just find the highest yield online savings account and throw it all in there? Rotating CD deposits? Safe stocks ?

Obviously it should be something that we can access the money should we need it, but want to put that money to work for us as well. Thanks for any suggestions.

Welcome. You'll get a variety of answers. Some people do just what you do...leave it in a savings account while others invest it in a Roth IRA since you can withdraw the contributions tax & penalty free. I even know some folks who keep a wad of cash stashed in a coffee can. I guess it ultimately depends on if you think you'll need to use it in a reasonable amount of time. I wouldn't bother trying to put it to work if you plan to replace the roof next week.

If you have no plans for it in the forseeable future, I'd go the Roth IRA route. Or do a hybrid plan by keeping like $5K in the savings & $15K in the Roth.

The Roth IRA route is OK if you invest it in the appropriate areas. In theory, you are using the e-fund money to keep from loosing the opportunity to invest in a roth. Therefore, you should only invest in cash equivalent investments if the Roth is your e-fund. Ideally, you'd eventually put the Roth monies into full swing by moving into equities (or whatever your AA deems) and build the e-fund outside of the Roth.

my e-fund is squirreled away in a super secret place on my property, some in a "high" yield savings but most is in 5 year CD's and i-bonds. I buy 5 yr CD's with a low penalty for redeeming early. I Also break into smaller amounts for the 5 yr CD's so if I do need some money, I don't have a penalty on the full amount. If rates ever go up, I will do the analysis on the penalty vs getting in at a higher rate. I-bonds must be held at least a year (actually, a little more than 11 months if you play your cards right) before they can be redeemed. The current rate on i-bonds is 2.2% (or something very similar).

I have an emergency fund also. I have mine in an online saving account earning interest.

By the way, the interest rate is an important aspect. I know the interest rates of my accounts off the top of my head. Basically, due to inflation, if you are not earning any interest on your account, it's the equivalent to actually losing money slowly.

My strategy is to place most of my emergency fund in I-Bonds. They match inflation so you are not losing money. I then keep a smaller amount in cash for situations which require immediate needs such as my car breaking down. I used to keep a credit card in my glove box but cash seems to be a better alternative since I don't want to ever use credit cards again.