Time has taught us that we should be prepared to face emergencies as they are unpredictable. It can physically and mentally disturb you if you are not ready for it. The influence of Covid-19 has been felt in our lives. Among the many affected by the virus, few people could stay immune to the virus, while others have been hospitalized to incur huge expenses. 

Medical emergency funds serve the purpose. What if you do not have the finances to meet the emergency? Your life would be at risk. 


Majorly income decides the amount to be saved for the emergency fund. People with a standard job should put aside 3 to 6 months’ salary as an emergency fund. At the same time, people with less job security should save at least 6 to 12 months.

The more people earn money, the greater the accumulated emergency funds. A more extensive emergency fund results in a stable income. Also, it depends on the no of people earning in a family.


Though saving money for a medical emergency is primarily essential, It is even vital to pay the current debts. People with more outstanding debts, insurance premiums, and EMIs must be mindful of saving the minimum required for emergency funds. However, this often becomes difficult for a few people. 

What if you have a medical emergency, have high debts, and did not save anything for the emergency fund? No worries! The best means would be to avail oneself of a personal loan from a reliable bank. 

Where should the emergency fund be placed? 

Emergency funds should be set apart from regular bank accounts. You might be tempted to access the amount for your everyday needs. However, please do not do it. Just save the amount and forget it. If you wish to know how to keep your emergency funds, here are the best options:

1. High-return savings account 

High return saving account is the best way to store your emergency funding. Traditionally, you will require transferring money in and out of a high-return saving account, which would require more time during an emergency. All online banks serve high-yield accounts. 

A high-yield savings account is accessible reasonably and enables you to receive a more significant interest rate than a traditional savings account. High-yield accounts earn greater than 2.00% annual percentage yield(APY) depending on the account size. While opening an online saving account, it is imperative to look at the rates, fees, and other vital withdrawal rules. 

2. Certificate of Deposit 

A certificate of deposit (CD) is another means of emergency funds. This requires you to keep money in the account for a specific time in exchange for a guaranteed rate of return. CD can be as a minimum of a month or longer as five years and even more. After the period ends, you can access your initial amount and interest. 

CDs earn a higher interest rate compared to other bank accounts. Some banks charge a certain fee, while others may charge the percentage of interest gained on your CD. What if you come across an emergency before the CD matures? You will not be able to draw money at this time. In some instances, you can do it with a withdrawal penalty. 

Individuals can open a CD account in any bank. Certain online banks offer CDs with better options and favorable rates. However, few do.

3. Money Market Account 

A money market and high-yield savings account earn greater annual percentage yield(APY) than traditional bank accounts. However, they are distinct in their ways. Money market accounts require a minimum deposit for account opening. 

You can also open money market accounts at online and local banks. Online banks offer better rates as they don’t have the overhead costs compared to traditional banks. Online you may find higher rates. Understanding that you can access funds in an emergency is essential. Concerning the saving account, federal law has limited transfers and withdrawals that can be obtained from a money market account.

Conclusion :

An emergency fund helps control your finances, giving you financial independence and helping you stay stable. The best time to build your account is when you are going through an emergency, and you can develop your goals accordingly.