Liquidity
Liquidity is how quickly you can turn an asset into cash without losing value. Cash and a savings account are highly liquid; a home or a retirement account is not. Matching liquidity to when you'll need money is the core of deciding where to keep it.
Liquidity is best judged by what it costs to convert something to cash quickly, not by whether it is possible. A savings account converts at no cost; a CD costs several months of interest; a stock portfolio converts in days but at whatever price the market offers that morning; a house takes months and several percent in fees. The reason this matters more than it sounds: illiquidity and bad timing tend to arrive together. Job losses cluster in recessions, which is exactly when a portfolio is down and a house is hard to sell. That correlation, rather than inconvenience, is why an emergency fund is held in cash despite the return given up.
Put it to work
Emergency Fund Calculator
Size your emergency fund from your real monthly expenses, see the gap, and get the date you'll be fully funded at your current saving rate.
Savings Calculator
Watch your savings account grow: enter your balance, monthly deposit, and APY to see the future value and every dollar of interest along the way.