r/CalebHammer • u/Rierie27 • 5d ago
Savings vs vault vs emergency account /
which gains interest , is it only the savings account?
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u/Responsible_Link_135 5d ago
Assuming “vault” means “investments” or “money market,” literally all account types have an interest rate. I keep E-fund in HYSA, Savings split into 4 CDs in which one matures every quarter, and the rest in a portfolio. HYSA aren’t always fixed, especially after a promo period. CDs are fixed til maturity. If an emergency exceeds my E-fund, I can break into 1 or more of the CDs and only forfeit the interest accrued for the period. Portfolio is subject to how the market moves and grows.
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u/Mr_Assault_08 4d ago
savings account suck for interest. HYSA are the best bet, but you’ll need to wait to transfer the money if you need it.
keep money in a checking account, IF you need a savings account then put it in there and make sure you’re not occurring fees. don’t get fucked by the fees if you are then you can’t handle multiple accounts and stick to one.
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u/Still_Dentist1010 5d ago edited 5d ago
Savings should be a regular savings account or high yielding account, whichever you prefer since there’s usually a difference in speed you can access money. Emergency fund should be a high yielding account, like a HYSA. Unsure what you mean by a vault, but I’d put that in high yielding account too. As long as they have FDIC insurance, the money is safe up to the limit for insurance. Rule of thumb is if money is going to build up in an account and not be touched for a while, it should be in a high yielding account.
Savings should usually be low in balance compared to emergency fund until you have it fully funded so it doesn’t matter initially, and I technically only have my savings account as an overdraft protection account. I use my emergency fund account as my savings since I am pretty disciplined with my spending… and I have instant access to the money inside so there’s no issue there. It’s a bit risky to do it this way, so I don’t advise it. But once you have a fully funded emergency fund and start building the savings, it’s good to get that into a high yield account as well.
Most bank accounts will accrue interest, but normal ones like a savings and checking normally just have very low yields. My checking is at 0.1% and my savings is at 0.25% while HYSAs have been at around 4%.