In addition to saving for the days you’re dreaming about — taking a vacation or making a down payment on a house, for example — you need to save for the days you hope never arrive. By working toward setting aside six months’ worth of expenses in an emergency fund, you’ll be prepared when a worst-case scenario becomes a reality. It’s especially important to have a buffer of financial support given that experts are saying there’s a 64 percent chance the U.S. economy will enter a recession in 2023.

Having an emergency fund is just one part of a successful personal finance strategy; you need to find the right home for it, too. Where you keep your emergency fund should factor in liquidity, protection and interest rates.

The best places to put your emergency savings

You need to be able to sleep at night with the assurance that your emergency fund has no chance of disappearing, so safety is a key ingredient. Two ways you can protect your emergency fund are by looking for an account with Federal Deposit Insurance Corp. coverage and by avoiding high-risk investments.

Accessibility is essential, too. Because you may need the money in your emergency stash at a moment’s notice, you’ll want to be able to withdraw funds without any potential for delay or penalties. Here are a few ideal options.

Online savings account or money market deposit account

These accounts may have different names, but they’re both well-suited for your emergency fund. In addition to insurance coverage from the FDIC or National Credit Union Association, these accounts offer the most competitive interest rates on savings products. Usually, these accounts also come with a guardrail to limit your spending from them: a maximum of six withdrawals per month.

Online savings and money market accounts also tend to earn higher yields than traditional accounts. That means your emergency fund can grow faster while it’s stored away.

One thing to note: Transfers from a savings account may take one to two days. Look out for transfer times, or keep a portion of your money in an account with more immediate access.

Bank or credit union savings account

You can also consider opening another savings account at your primary banking institution, which simplifies your financial life by keeping everything under one roof, while distinguishing your emergency fund from the one you use for your day-to-day finances.

However, you may sacrifice the potential for earning interest. Institutions with large networks of brick-and-mortar branches may offer a pittance of yield compared with low-overhead, online-only banks.

Money market mutual fund

These funds present another relatively safe place for emergency funds. Although they don’t come with the guarantee of insurance protection, they are low-risk and easily accessible parking spots for cash. Any interest earnings, though, aren’t much to write home about — a key difference between these and money market accounts.

The worst places to put your emergency savings

Knowing where not to keep your money is an equally important lesson. These places can serve a valuable purpose for your other financial needs, but they aren’t designed for emergency safekeeping.

Checking account

Lumping your emergency savings in with the checking account you use on a regular basis presents the challenge of making it too accessible. It’s better to completely separate savings and everyday finances. Otherwise, you will run the risk of dipping into your emergency stash with the promise that you’ll replenish it when your next paycheck arrives (and the potential to break that promise). The other major downside is the lack of earning potential. Standard checking accounts offer nominal yields, and frequently, they don’t offer any interest earnings at all.

Certificate of deposit

A traditional CD comes with a penalty for any early withdrawal of the funds. So, if you park your emergency savings in a one-year CD and wind up needing the money in four months, you’ll forfeit interest and, potentially, even have to hand over extra cash to access it. There are alternative no-penalty CDs, but some of these still carry access limitations and often pay less interest.

The stock market

With an average of a 10 percent annual return, the stock market is great for a long-term investment strategy. However, when you have the potential for playing a very short game — needing your money next week, for example — avoid the market at all costs. If you want evidence of the high-risk gamble that stocks present for your savings, take a look back at the four-day period in March 2020 when the Dow Jones Industrial Average dropped by 26 percent.

Savings bonds

Savings bonds might work for a portion of your emergency fund. However, there are some significant drawbacks to using them for your safety cushion. After purchasing a savings bond, you cannot cash it in for a full year. And while these do pay interest, you would have to forfeit three months of those earnings if you cash in the bond within five years of purchase.

At home

If you’re considering keeping your emergency fund under a mattress or in a safe at home, it’s time to rethink your strategy. In the event of an at-home emergency such as a fire or theft, it creates another dire emergency: Your cash will be gone — without any way of getting it back.

Plus, you lose out on several of the benefits offered by regulated accounts, such as insurance and the potential to earn a yield.

Bottom line

If you’re struggling to build an emergency fund, it can actually help to find an appropriate place to store the fund. If you keep your fund in a savings account, for example, there’s an incentive to avoid breaking into your savings, since there are often limits on withdrawals you can make from these accounts. It also makes it easier to track savings progress when savings are kept separate from funds for everyday spending.

Plus, when you shop around for the right account, there’s a potential to earn a top-tier interest rate and make your savings grow. Compare some of the best savings accounts and money market accounts as a starting point to find a home for your emergency fund.

— Bankrate’s René Bennett contributed to an update of this story.