Once you've saved your first emergency money, the next question is where it should sit. Copper has three good homes for it, and each is right for a different job. Here's a way to decide in a few minutes.
High-Yield Savings: the default
High-Yield Savings earns 4.10% APY with no minimum and no monthly fee, and you can move money to checking the same day. For most people that's the whole answer. It's liquid enough for a surprise bill and earns enough that inflation isn't eating it.
- $6,000 at 4.10% APY earns about $246 in a year, compounding daily.
- No lock-up and no penalty for withdrawing.
- Name it "Emergency" in the app so it doesn't get spent on something else.
Money Market: for a bigger cushion
A Money Market account pays 3.20% APY and comes with checks and a debit card, so you can pay a large bill straight from it. It makes sense once your fund is past a few months of expenses and you want one account that both earns and pays.
Certificates: for money you won't need soon
Certificates lock a rate in for a set term: 4.00% APY for six months, or 4.35% APY for twelve. Withdrawing early costs some of the dividends, so certificates suit the part of your savings you're confident you won't touch.
Copper tip: Keep one month of expenses in High-Yield Savings, then put what's left over in a 6- or 12-month certificate. You get the higher rate on most of it and same-day access to the part you might need.
An emergency fund's first job is to be there. Earning more comes second.
The short version
- Under three months of expenses: High-Yield Savings.
- Three months or more, and you write checks: add a Money Market.
- Money you're sure you won't touch for a year: a certificate.
Put your emergency fund to work.
Open High-Yield Savings in about six minutes, with no minimum and no monthly fee.