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    • Home • Advice • Common questions

    Where should I put my rainy-day fund?

    08 July 2021

    Question by Lydia

    Where should you store your 'rainy day' buffer funds?

    With interest lower than inflation is it better to invest it in an easy access account?

    Thanks

    Answered by

    Hi Lydia

    Notwithstanding really low interest rates, the best place to keep ‘rainy day’ money is still in a savings account, either instant or perhaps a 30 day notice account. It is also to quantify how much should be ‘rainy day’. Most advisers would recommend between 3 to 6 months expenditure and I would add up to 2yrs potential capital expenditure (for holidays and home improvements, for example).

    Historically, even when interest rates have been higher than today, inflation has been higher still, so holding too much cash always comes with the wealth warning that its real value is going backwards every day.

    Important stuffHolly and the team have worked in the finance industry for many years but we are not regulated to give you personal financial advice. For every story on this website about a good investment, or something which went up by 10% or made someone £200, we could also share a story about a bad investment, something which fell in value or lost someone £200. We aim to provide general information and pointers – and btw we are totally agnostic about which providers you might pick – but if you have complex affairs, want personalised advice or need specific recommendations, please look at advice pages and see if regulated digital or traditional financial advice would be the best solution for your needs. Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
    Risk warningAs is always the case with investing, your capital is at risk. The value of your portfolio can go down as well as up and you may get back less than you invest. Tax treatment depends on your individual circumstances and may change in the future.
    Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
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