Rocky Mountain Bank
How to Setup an Emergency Savings Fund

Today is a perfect example that you can't plan everything. Be prepared with an emergency savings fund.

Setup an Emergency Savings Account Online

The coronavirus has impacted all of us and we are working closely with our customers to adjust during these uncertain times. One best practice customers may want to consider is setting up an emergency savings account. This emergency savings account can be created online without having to visit a branch.

What is an emergency fund?

An emergency fund is a separate account that can be used to help cover unforeseen expenses like a broken air conditioner or heater, auto repairs, medical treatment, or some other type of emergency. Each month, you can contribute money to your emergency fund to build up savings over time. Then, if you do have an emergency you are prepared to cover the costs.

How do I setup an emergency fund?

  1. Open a savings account online. You can typically complete this step in about 5 minutes with a variety of account types to choose from.
  2. Transfer funds from your checking account or make a mobile deposit on your phone to put some money into the new account.
  3. Use online banking or mobile banking and give your account a nickname like “Emergency Fund”.
  4. Setup a recurring transfer within online banking or mobile banking. You can pick a fixed amount (such as $50 or $100) to transfer into the new account each month.

When do I use my emergency funds?

You should only access these funds for a true emergency. Try not to use the funds for impulsive spending on discretionary purchases. Instead, let your savings build up so that when an emergency does happen you are in a position to cover it.

What other options are there?

You may find yourself needing access to emergency funds sooner. Another method is to leverage the equity that you’ve built in your home. Home Equity Lines of Credit (HELOC) are great resources for an emergency expense due to their low interest rates and flexibility. When you need cash quick, accessibility is important. By simply writing a check or making a transfer, you can draw off your line of credit when you need to use it. Paying it back will be much more manageable than credit cards because the low interest means smaller payments.

 

 

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