I recently attempted to access my emergency fund due to an auto fiasco I’ll cover separately. I say attempted because I found out that I couldn’t transfer funds out of my emergency fund! Not exactly the most useful of emergency funds, but luckily I found it out before a serious emergency hit and know how to resolve the issue. Here’s what happened:
I opened my emergency fund in August of 2006 with ingdirect.com because of the great interest rate they have on savings accounts. It takes a couple days to transfer money in and out, but I normally keep a buffer in my regular checking account and I thought receiving the money in my regular checking account within a couple days would be fine.
Unfortunately, because of the holidays, my normal checking account buffer had run low and, to put it mildly, my savings account at ingdirect was not as responsive as I needed. Due to a technicality, while they have been happily accepting my deposits for almost a year and a half, they won’t let me withdraw any funds until I confirm the secondary accountholder on my account. Nice that I find that out in the midst of a minor emergency. Even more ludicrous is that I was the one that added the other accountholder (the wife), and the confirmation process, because we share checking accounts, is simply logging in under her name and entering the same amounts with which I confirmed the primary account.
Apparently, I must have missed this step when I added her account because they refused to release my funds until she calls them and gets them to deposit a new amount for verification or until I can figure out from my bank what was deposited by them a year and a half ago. Unfortunately again, the wife was out of town when I needed this, and our regular bank does not go back that far online, so I had to accept that I was not going to be getting my money for this emergency.
Fortunately, the “emergency” was my car imploding and my need to buy another one. Good thing it wasn’t something really serious. On the other hand, this inability to access my funds really added to the stress of the situation.
So: Make sure your emergency fund is accessible in whatever manner, including timeframe, that you might need to use it. I suggest doing a test run, simulating an emergency (on the weekend for the worst case scenario) and see how long it takes you to get cash in hand. I don’t expect you’ll run into a problem like mine, but when an emergency arises, you’ll want to know exactly how long it will take you to have your emergency cash in your pocket.
BTW, I still recommend ingdirect, and I still use them, so if you want a free $25 for opening an account, send me an email through the contact tab up top and I’ll email you a referral link (and I get $10).
