RetireJapan

Hello,

Today I have a question about emergency funds. We all keep certain safe amount in our savings account that can be withdrawn at any given point in case of need. However as you know in Japan, bank have super low interest rate for saving account.

Is there any way we can invest it in deposits with good interest rates (using any bank or any securities account)? Now I understand that defy the purpose of emergency funds, however what i am looking for is some kind of a deposit scheme, in which, i can just break the deposit and withdraw my amount quickly (ofcourse without any gains but keeping my original amount same in case of premature break of deposit).

Basically this gives advantage of gaining some good interest in case emergency funds are never required, and at the same time keeps the funds liquid enough to be ready to use anytime.

Thank you

This question comes up a lot on the forum.

So far the answer is, no, probably not

Stable accessible accounts pay almost nothing, and trying to get more growth exposes you to volatility, etc.

I think most people here just stick it in the bank and forget about it. Invest with your non-emergency fund money.

When an emergency funds approach 1 year+ in living expenses you could consider the following:

Holding a part of your emergency fund in USD or your "home currency" with Shinsei, or Sony etc. MMF also offer more yield, for slightly higher risk.

There is also a case for creating two buckets.

A. Liquid cash
B. Semi-liquid -> Japanese government bonds, treasuries bought with USD deposits.

Consider the loss from inflation as the insurance premium for security when everything else is on fire.