Bank and Emergency funds.

[Strongkored]

Emergency funds are important for me to keep in cash form so that I do not suffer a loss when I need to use them, because we cannot predict when they will be needed.

Because keeping my emergency funds in a bank that will be deducting my money or in the name of bank charges is something that does not make sense to me.
Some people will ask what if an emergency happens immediately I borrow out my emergency funds how will I solve it, well I will simply borrow and solve it then when I get my money back I balance things up.

I once kept my emergency funds in a term deposit, which can be withdrawn at any time, and the only loss if not yet matured is that I will not earn interest.
I am more comfortable this way because it can be withdrawn anytime without incurring any losses.
Meanwhile, investing emergency funds is very risky due to unexpected events, whereas borrowing is not easy unless you have a friend to lend to you, and taking an online loan comes with very high interest rates.

[boyptc]

There is a reason why it's called emergency funds. You shouldn't spend it on any other things like lending it to other people or even the banks.

It should be ready whenever you're going to use. Depositing it on them should be fine because it earns you some interest and even with the little gain, you can liquidate that whenever you need them.

I wouldn't touch any emergency fund and will only use it whenever I have to and hopefully it earns more with compounding interest because I don't even have to use it.

[IjawMan]

Because keeping my emergency funds in a bank that will be deducting my money or in the name of bank charges is something that does not make sense to me.

It depends on the account you had your money in. Could be current account cause with your emphasis it is big amount of cash. Savings account you should be receiving an added interest monthly not deduction of the cash.

But this is not the finest ideas for an emergency funds. You can be stuck in an unpleasant position and needs the money asap, your bank may disappoint you. Your emergency funds should be where you can access it in no seconds without having to go through a third party validation.

Some people will ask what if an emergency happens immediately I borrow out my emergency funds how will I solve it, well I will simply borrow and solve it then when I get my money back I balance things up.

This you moving in circles and with risk of making losses from your emergency funds.  What when the interest to you where you borrow is higher than the interest you giving for your loans, is that a profit to you.

[free-bit.co.in]

But this is not the finest ideas for an emergency funds. You can be stuck in an unpleasant position and needs the money asap, your bank may disappoint you. Your emergency funds should be where you can access it in no seconds without having to go through a third party validation.

I don't know what problems you guys have had with bank when transferring or withdrawing large amounts of money. Have you actually experienced this, just heard about it, or are you making this up? Because in over 20 years of using bank, I have never encountered any problem like you described, no matter how big or small the amount.

The bank will not freeze or trouble us if we are not involved in illegal matters, dirty money. The downside of putting money in the bank is that it cannot save us from inflation, the devaluation of money.

Putting money in the bank is safe, we should not distort this fact.

[YOSHIE]

Bank and Emergency funds.

This is the first time I have seen someone asking to use an emergency fund to do business and invest and if at any time needed to deal with the bank, for me it is a bad idea.

For me emergency funds must be frozen, at any time needed as soon as possible taken as soon as possible, we never know the disaster that will occur, using emergency funds for business when needed not according to our expectations, it often happens.

Luckily business not all our businesses can run smoothly, the business is full of challenges and requires a process as easy as turning the palm of the hand, so don't disturb your emergency funds.

[beveryu778]

Keeping money in the bank as an emergency fund is very safe. Because money can be used from here immediately at any time and money can be withdrawn through ATM card at any time within 24 hours, and money can be transferred through online transactions. But when someone invests somewhere, he has to keep that investment for a long time. Because investment is never for a short time. If you invest for a short time, you cannot make a profit from it. Therefore, no investment can ever be moved in an emergency. Because of this, the use of a bank or any centralized platform is very necessary for emergency funds

[SOKO-DEKE]

Because of what someone said in a thread concerning holding your emergency funds for long term without using it, that why not invest it on something that will bring profit for you in a short period,

An emergency fund should always be an emergency fund, and it should not be used to invest, because it is meant to protect your investments. It is very risky to invest your emergency fund or to not have one at all because that can cause you to lose your investment.Take Bitcoin, for example. It is volatile in nature. If someone invests in it without having a backup plan, and a problem arises, and they don't have any other means to solve the problem, they will likely be forced to sell their Bitcoin. It’s possible that, at the time they need the funds to address the issue, the price of Bitcoin may be down.Since we don’t know when emergencies will arise or what kind of problems we may face, we should never play with our emergency funds.

[Smartvirus]

How much does bank charge compared to the risk of being hit by an emergency when you have nothing at hand and have to go source for means of borrowing?

emergency fund protects you and your asset from uncertainties that can either get you frustrated or push you to selling your coin in loss. there are chances that when you go sourcing for money to borrow, you might not see it and then might be left with the option of selling your coin to offset the emergency. this is what having an emergency fund can save you from.

I don’t think there is anything wrong in having your emergency funds in Bitcoin. Certainly you could do that, emergency funds doesn’t necessarily mean they must always be in fiat, it could be in Bitcoins and which ever prevailing market condition gets to affect it.
Should there be need of it in cases of emergency and it’s your only option to source the needed money, then you go ahead and sell the coin to solve that problem. It doesn’t get any difficult than that.

Emergency funds is a necessity and you can decide in what form you wish to have it, either in fiat or cryptos.

[sunsilk]

Emergency funds is a necessity and you can decide in what form you wish to have it, either in fiat or cryptos.

I've got some of it in the form of crypto so the value could also go up. I think this is the point of OP that instead of having the emergency funds kept in fiat that doesn't move its value at all.

It's better to put it somewhere that the value of it grows over time without doing anything. And it means that our money works for us even if that's the purpose of it, to be spent.

While we have to convert it when it's in the form of crypto, that is okay when many exchanges today can easily do that and liquidated those assets in the form of crypto.

[Japinat]

It’s good to invest using your hard-earned money but I don’t think emergency funds are the right form of funds that one should use to invest. This is the reason why we should separate our investment funds from our emergency funds so that we can use them accordingly. Investment funds are solely used for investments as they are our spare money that somehow we are comfortable to lose. But emergency funds should remain untouchable, as they are exclusive only for future emergency events that we don’t have any control.

It’s good to invest at the moment and benefit in the future, but we should only stick using our investment funds that we can afford to lose, therefore it shouldn’t be our emergency funds.

[Royal Cap]

Well, I think the bank is really the safest place for an emergency fund. Because money is always readily available there, available at any time through ATMs or online transfers. However, one thing that many people overlook here is that keeping money in the bank means that it is financially secure, but its value is not. Inflation gradually reduces the purchasing power of that money. The $1,000 you spend today might cost $1,200 or $1,300 for the same thing two years later. Bank interest usually cannot compensate for that loss. So, in my opinion, the most balanced way is to divide your money into two parts. The first part, which will cover three to six months of living expenses, should be kept in the bank as an emergency fund. And the second part can be used for investments.

[Cheema02]

An emergency fund is like insurance; it's a price you pay to protect yourself from risk. You seem to think you've come up with a great idea, but you're not the first person to have a similar idea and get burned. For starters, you don't have to keep your emergency funds in the bank; you can keep them in cash.

Relying on a loan when times are tough is high risk because when the time comes, they may not give it to you or they may charge you high interest. I had an emergency fund that I didn't use for years until I had to use it.

It gives you much more financial peace of mind to have an emergency fund, even if you don't use it for a long time, rather than playing around with loans.

Yes, I agree with your that emergency fun acts as a financial safety net and it might feel like wasted money when we just sit there. During the trouble time, emergency funds give us invaluable peace. An emergency fund catch us when unpredictable crisis in our life throws some unexpected in your way. It gives us peace in mind knowing that it's there even we aren't using it for years. During an emergency we should avoid crediting our loans in banks because we have to pay high interests in order to get our money back. Some people keep it in a safe place in cash form where it's easy to access. Having a loan should mean that we have it available at any time so that we could use it.

[coolcoinz]

You can in fact lower the amount of emergency funds that you have. Evaluate how much money you really need to hold at hand with immediate access. For most people it's going to be maybe 3x their monthly wage because in 3 months you can do a lot of things. The crisis can end by itself, for instance you get sick - you come out of it. You lose your job - you get a new one. Also it's enough to sell stuff like a car, gold and other valuables. You don't need enough to make you survive a year without lifting a finger. Most of it can be invested.

[Scarlett_23]

  Snip~

You should keep your emergency funds with you at all time and there's no need to use it for loan giving because it's for an unforeseen circumstances and not for doing business. Life is full of uncertainty, therefore, it is not wise to be hit with an emergency, you should start running here and there looking for who will borrow you money when you had yours but used it for business. What if you did not see anyone to lend you the money. You can keep your emergency funds in usdt, and keep it in a self custody wallet.

Emergency fund is a fund that is kept for sudden or unexpected expenses. Emergency fund is needed to survive for three to six months due to some sudden reason. Emergency fund acts as a protection for investment. Therefore, you can never do business with emergency fund because business will not always be profitable. Again, if you lend emergency funds to someone, you will not get them immediately for your needs. Emergency fund can be kept in the bank, but only if it can be withdrawn easily. In that case, there is a risk of getting into complications many times. Therefore, you should keep the emergency fund with you. If you keep it in cash, if there is a fear of spending it or theft, then you should control it on your mobile.

[uchegod-21]

.
When you have an emergency and you have already used your emergency funds for your business you can simply borrow and since it is a business that profit you in a very short period you can balance up without it affecting you financially or your Bitcoin investment, remember I said look for 90 percent less risky business.
Think about this.

This seems like a perfect plan until a real emergency strikes and you can't find who to borrow from immediately to resolve the situation.  An emergency fund should be easily accessible at all times, nothing stops you from keeping your emergency fund in cash and in the bank. The goal is to make it easily accessible. You can split it into different forms; some percentage in cash reserves and another in deposits that will yield interest. Even if you must invest that emergency fund, make it in such a way that you can easily go for it in times of emergency.

[moneystery]

An emergency fund is money that should be available whenever you need it. It's a fund specifically set aside to deal with unexpected situations. Since you don't know when an unexpected situation will occur, you should have it ready whenever you need it. If you borrow funds intended for an emergency fund, it can no longer be considered an emergency fund, as it has lost its function as a ready-to-use liquid reserve. Regardless of whether the loan is quickly disbursed or not, it should not be diverted for other purposes.

You don't need to keep your emergency fund in a bank, you can convert it into cash and store it in your safe or other secure, easily accessible storage location. With that you can avoid paying monthly fees.

[Smack That Ace]

How much does bank charge compared to the risk of being hit by an emergency when you have nothing at hand and have to go source for means of borrowing?

emergency fund protects you and your asset from uncertainties that can either get you frustrated or push you to selling your coin in loss. there are chances that when you go sourcing for money to borrow, you might not see it and then might be left with the option of selling your coin to offset the emergency. this is what having an emergency fund can save you from.

I don’t think there is anything wrong in having your emergency funds in Bitcoin. Certainly you could do that, emergency funds doesn’t necessarily mean they must always be in fiat, it could be in Bitcoins and which ever prevailing market condition gets to affect it.
Should there be need of it in cases of emergency and it’s your only option to source the needed money, then you go ahead and sell the coin to solve that problem. It doesn’t get any difficult than that.

Emergency funds is a necessity and you can decide in what form you wish to have it, either in fiat or cryptos.

No offense, but I think those who believe an emergency fund can be held in volatile assets or used for speculation. They still don't understand the true meaning and role of an emergency fund, and maybe they've never experienced it.

It is no coincidence that emergency funds need to be held in stable and highly liquid assets. It is the result of human experiences and mistakes over many generations.

I want to ask, what happens and what do you do then if you need to use emergency fund but unfortunately Bitcoin suddenly gets dumped heavily by Fud?

[Smartvirus]

None offense taken my friend, it’s an open discussion and it’s even more pleasing when there are contrary opinions to it. It creates an opportunity for expansion and better understanding.

It is no coincidence that emergency funds need to be held in stable and highly liquid assets. It is the result of human experiences and mistakes over many generations.

Times like these did exist because we had no option, these were times when we had no Bitcoin and Bitcoin had no much value in itself as we have it in today.

Let’s take Bitcoin reserves for an example, same concept that backs emergency funds is what backs the idea behind reserves isn’t it? As a fund countries that owns reserves need to use for purposes ranging from conservation to emergency rescue of the economy.

Then again, emergencies doesn’t happen often, you might not have need in a year, 2years or even decades and even then, you might have it in a day, week or month. We never can tell and that’s why it’s an emergency.

I want to ask, what happens and what do you do then if you need to use emergency fund but unfortunately Bitcoin suddenly gets dumped heavily by Fud?

Of course you would sell it at the current price and be at a loss, you can’t do any better than that. You only have to hope that it’s well above or about the funds needed to solve your emergency situation. If it pumps, you do the same and stay in profit.

Mind you, even fiat is not stable, we all know inflation has affected everything and those being paid their pension that could have been worth more finds it to be worth nothing in today’s economy. Same thing applies to emergency funds saved through years, it also affected by inflation.

You only get to choose which one you can go with easily.

[aylabadia05]

So if your emergency funds have been with you for a very long time and you don't even use them, look for a 90 percent less risk business that brings profit in a very short time and invest it there.
When you have an emergency and you have already used your emergency funds for your business you can simply borrow and since it is a business that profit you in a very short period you can balance up without it affecting you financially or your Bitcoin investment, remember I said look for 90 percent less risky business.
Think about this.

There's nothing wrong with keeping emergency funds untouched, even for a limited time. This makes it easier when you need them without having to ask those you've borrowed from, even the bank.

Diverting untouched emergency funds to other areas, such as investments that have the potential to generate profits over a long period of time, like the length of time an emergency fund remains untouched, is better for me than finding alternatives rather than touching these funds that could save me someday.
Every financial plan has its own agenda. If you think what you're suggesting is good for you, do it.

[XOOMBOX]

There is a reason why it's called emergency funds. You shouldn't spend it on any other things like lending it to other people or even the banks.

It should be ready whenever you're going to use. Depositing it on them should be fine because it earns you some interest and even with the little gain, you can liquidate that whenever you need them.

I wouldn't touch any emergency fund and will only use it whenever I have to and hopefully it earns more with compounding interest because I don't even have to use it.

You raise a very good point. And I agree that an emergency fund should always be easily accessible. But I think it is a completely personal matter. For example, someone keeps money in the bank for their own safety, but I am comfortable keeping money with myself. I keep money with myself so that I do not have to go to the bank in an emergency. Actually, I think the main thing is that if you can balance your liquidity and money safety, you can use it whenever you need.