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The rule of thumb on savings accounts is three months’ expenses. Does anyone else know of any other rules? This seems to be the only one touted, but there is more that you can do with that money than you currently are. Just because it is a savings, meaning you need to keep it liquid and at low risk, does not mean that you can’t treat it like an investment. For most of us, three months worth of expenses adds up to several thousand dollars. That seems like a lot of capital to ignore. By doing a couple of simple things you can put that cash to work—without putting it at risk.

The first thing to consider is the type of account your money is sitting in. Leaving your emergency fund in your checkbook is a good way to end up dipping into it without meaning to. Even if your checking account does have a decent interest rate compared to checking accounts at other banks, compare that to an average savings account. You’ll usually find the interest rate is slightly higher on a savings account than a checking account. The banks make it easier than ever to open a savings account, many times giving you bonuses for having multiple accounts with them. Just make sure that any overdraft protection you chose to set up does not draft from your emergency savings fund. $30 here and there can put quite a dent in that cushion without you even realizing it.

Another advantage of having multiple accounts is that it looks better on your credit report. One thing companies take into consideration when determining credit worthiness is your debt-to-assets ratio. Having multiple accounts with money in them looks better than one account with the total balance in it. Setting up a regular savings account for overdrafts and upgrades (cars, home repairs, vacations, etc.), a separate account for your retirement funds, and an additional account for emergency $$ is an easy way to keep the money separate and make sure it ends up where you intended it to. If the kids are saving for college, put that money in its own safe spot as well. Keeping things separate may sound like a mess of paperwork, but it really is quite easy to name accounts these days, taking away the confusion.

Lastly, have a look into a Money Market account. Over the course of their existence, the face of the MM account has changed drastically. Once a tool that only the wealthy were able to access, any average Joe can stash away his savings and reap the benefit of a significantly higher interest rate than that of any bank savings. Beginning balances on these accounts have dropped from the old 10k standard to 2k on average, and there are even some that will allow you to open an account for free initially and let you build the balance over time. You can tie it to your checking account to make funding it easy, but I still wouldn’t recommend signing it up for overdraft protection. Many of these accounts allow you to keep your cash as fluid as it would be at your local bank with online access, checks and even debit cards.

Your emergency fund is something that is important and shouldn’t be trifled with. By taking a little time you can still keep it accessible and fluid without ignoring the earning potential of several thousand dollars. Thanks to the miracle of compound interest, switching to an account with even a few more points in interest can mean a few hundred more dollars a year. This money can be left to compound with the principle balance or shuffled over into another area that needs a little fiscal padding. The point is that while the choice is yours, you have more choices than you may have thought. With a little bit of research, you can find a savings account that works with you or even a Money Market account that works for you.

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