The usual rule for saving money is you need to save enough to pay today's bills plus living expenses for three to six months. What's right for you depends on whether you're single or raising a family, how much you earn, and the other choices you have if you need money fast.
Where should I keep my emergency savings?
You may want to consider investments called "cash equivalents." These products are a lot like cash. You can usually get your money out within 90 days or less. Cash equivalents include:
- Chequing accounts
- Savings accounts
- Money market funds
With cash equivalent products, there is little risk of losing money and you often know how much you will make. Just be sure you understand when you can get your money out ? and if there are any special fees or penalties for early withdrawals.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.