I recommend that you save automatically BEFORE you pay bills. Have the money taken from your check and deposit directly into a high-yield savings account. For emergency funds, I don’t recommend investing in long-term investment funds or stocks. This is because should you need the money and you have to get to it quickly, you have an extra hurdle, and mutual funds and stocks carry far more risk than a secure high-yield savings account. But more importantly, if you withdraw the funds from an investment that has been held for less than a year, you’ll have to pay short-term capital gains tax on the earnings. In a high-yield savings vehicle, you are free of a higher tax rate on the earnings. Of course, the earnings will be taxed as interest at your normal income rate.
American Express has the best high-yield savings account that I could find right now. It’s a great 4.35% APY!!! This is a safer bet. Here’s the link: https://www.americanexpress.com/en-us/banking/online-savings/high-yield-savings/
