Emergency Cash

If you have read my book “The Money Plan“, you will know I talk about emergency cash being the first step on your savings ladder. This is the amount of money you hold on deposit in cash to cover emergencies. This should typically cover between 3 to 12 months of living expenses. If you have unsecured debts, hold £1000 of cash as an emergency reserve and focus on repaying your debts.

I get asked a lot by clients and listeners where they should put this emergency cash, and below are a few pointers at the type of account you should be looking to set up for this.

Remember, this account is for your emergency cash, and I often believe convenience is more important than getting the best 0.1%APR, it’s not for your WAM (Walk About Money) spending or your Bills account.

NS&I Premium Bonds | Instant Access No Bonus | Instant Access With Bonus

National Savings & Investment Premium Bonds

My first preference is to hold your emergency cash with National Savings & Investments Premiums Bonds

Premium Bonds are my first choice because whilst interest rates are so low, you are not ‘giving up’ much guaranteed interest from a traditional account, and it’s 100% backed by the British Govenermane, so it’s in addition to your FSCS protection. Furthermore, it’s quite exciting to be in for a chance of a jackpot win!

However, if you would prefer a traditional bank, check out the other options below.

Instant Access No Bonus

Access your savings with no notice. These variable accounts give you instant access to your savings.

AERNotice/TermMin. Investment
Birming Midshires
BM Internet Saver
1.35%None£1
Paragon Bank
Limited Edition Easy Access
1.31%None£1
Virgin Money
Double Take E-Saver
1.30%None£1

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Instant Access with Bonus

Unlike instant access accounts without a bonus, which are completely variable, these accounts come with a fixed rate bonus that cannot change.

AERNotice/TermMin. Investment
Coventry Building Society
Limited Access Saver
1.40% Inc 0.25% bonus for 12 monthsNone£1
Bank of Cyprus UK
Online Easy Access Account
1.34% Inc 0.49% bonus for 12 monthsNone£1
Tesco Bank
Internet Saver
1.34% Inc 0.79% bonus for 12 monthsNone£1

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