I keep my emergency money at ING Direct, for now. Their multiple savings accounts and no minimum balances make it easy to save for different goals in separate accounts with perks such as unlimited free transfers between your main bank and theirs, or free transfers within your ING accounts. Lately, I have been disappointed with the dropping rates at ING. I have been shopping other online savings account rates, but not many are much better than ING.
Should I move my emergency account to a CD?
Not that CD rates are much better, but I am sure that I could find at least 1/2% jump, the question begs, is that small difference worth the penalties that I may incur for withdrawing the funds if I need them? After all, I do need this money to be completely available if I were to have to dip into it.
For now, I will leave my emergency funds where they are. Most CD rates are between 2-2.5%, but for my small emergency account will stay put. If rates do not rise soon, the money I have marked for my other savings may end up elsewhere.
Have you debated this yourself? If so, on what side of the fence did you end up? If it ended up in a CD, did you have to take a hit on a withdrawal, or did you not have to dip into those funds?