Where should I put my rainy-day fund?

08 July 2021

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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?


Answered by Martin Ruskin

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.

Answered by

Martin Ruskin

Client Director

Was a church pastor for a number of years! Love how a good Financial Planner can make sense of money and take the worry and stress away from people so they can concentrate on what is truly important for them.