Build an emergency fund with automated savings

We all want to save money. New house, family trip, retirement—whatever our goals may be, saving helps us reach them. But if that’s true, then why does it feel so hard to accomplish? Why, according to Bankrate, do 24% of U.S. adults have no emergency savings at all?

For many, it’s because we haven’t made a habit of it—at least not yet. Once it becomes a regular part of your monthly finances, you’ll find this foundational step can make a long-term difference.

First things first: We need to dispel the notion of “extra” money. When we wait for leftover cash to suddenly appear, we put all of our eggs in a basket that may or may not exist. Combine that with normal behaviors (impulse spending, lifestyle creep, unexpected costs) and our ability to save grows weaker by the minute.

The solution? Make savings automatic by following these four steps.

The idea of saving can seem daunting, especially when you have a large amount you want to reach. The key is to break it down into reasonable increments. Let’s say you save $50 per paycheck. Assuming you’re paid every two weeks, you’ll have saved $1,300 over the course of a year. If you set aside $100 per paycheck, you’ll have $2,600. Choose the amount that works best for you, but make a point of paying yourself first. Remember: By automating the process, you remove the temptation to not set money aside.

Setting money aside is a start, but leaving it alone is key. By opening a dedicated account—one without debit card or ATM access—you can physically separate your savings from your everyday expenses. Labeling the account helps create a psychological barrier, something like “Emergency Fund” or “Only For Emergencies” that makes it clear what that money is for.

Different accounts serve different purposes. Although you want access to your emergency account when it matters most, other offerings may be better suited to your needs. Consider the following accounts as you start building your fund: 

• Free Savings: Our no-fee savings account keeps your cash in reach while offering a competitive interest rate.
• Money market account: Once you’ve reached the $1,000 mark in your emergency fund, consider turning it into a money market account. You’ll earn higher interest without sacrificing accessibility.
• Certificate of deposit (CD) account: Offering higher interest rates than regular savings and money market accounts, CDs are a great way to grow the money you save. There is a penalty for withdrawing funds before maturity, so consider putting extra savings toward it once your emergency fund is established. (Pro-tip: Consider CD laddering as your savings grow.)

Still not sure if a money market or CD is right for you? Take a closer look with our side-by-side comparison. 

This might be the toughest rule of them all, but it’s the most important one to follow: Don’t touch the fund unless there is an emergency. It’s easy to see how much you’ve saved and think “Well, I could spend a little bit.” A little here, a little there, and soon enough your emergency fund isn’t properly protecting you. 

Building an emergency fund is a smart financial decision, and automating your savings makes it an easy one, as well. Ready to start building your fund? Open an account today.