Not sure where to go from here

[Anonymous]

40 years old (in 3 weeks)

Debt paid down (a lttle on 0% cards, but not too much).
Mortgage obtained.

Quick access small emergency fund intact ($1000 or about 2 weeks take home pay).

Funding employer SIMPLE IRA to matched amount (3%)

Now.. I want to build our real emergency fund; 3 - 6 months living expenses, but I don't want to just stick it in a savings account earning 1% if I get a high yield account. At the same time, it would need to be somewhat accesible... emergency fund, after all... so CDs are out (and frankly, not much better than a savings account).

Am I smarter to go with that HYS account or is there a better place to put our extra funds? Saving for the house, we were putting away around $100-$150 a month (with large lumps at tax time) and I'm hoping to do the same now that the initial move in costs are done. *knocks on wood*

[Anonymous]

An online HYS account is going to give yout he best return for liquid funds. That being said I would still keep some at a local brick and mortar bank that you can access right away if need be. A lot of smaller banks or CUs offer high yield checking and/or savings accounts if you meet certain requirements during the month. You could also open a checking with one of the online bankings, receive a debit card, and then if you ever need to transfer from the savings to the checking and use the debit card to access the funds.....otherwise you have to do an ACH which will take a few days. 

Personaly I keep a few thousand in my savings at my bank (PNC) and then invest the rest and I consider this my emergency money. There are two big downsides to this besides having to wait a few days:

-You could lose principal since it is invested

-If you do well and you need to access the funds there is a tax consequence

So this is defnitely not for everyone, depends on your risk tolerance. 

I've also known folks that use a Roth IRA for emergency funds. You can access your contributions if needed (post tax contributions) but if you don't need to use the funds (fingers crossed) then you have built up your retirment that much more. 

[Anonymous]

If I were you, right now I'd take all "investable" income/money and do a 50/50 split between emergency fund savings and investments (IRA/index funds). For me, I prefer a brick-and-mortar savings account because I value the liquidity in an emergency over the 0.5%-1% return, but that is totally your call.

After your emergency fund is at the point you want it to be, I'd probably do something like this with any investable money:

70% to invesment account

25% to short term savings (summer vacation, christmas presents, etc.)

5% to continue to pad your emergency fund

Just my two cents .