Until it's right there when you need it. It's not called an emergency fund for nothing

Any way you slice it 6 months living expenses earning no interest is a huge expense. For the average person putting that away at 30 means delaying retirement by around 2 years. Worse you need to keep adding money in to keep up with inflation.

It’s reasonable to keep 6 weeks of living expenses on hand, but the rest doesn’t need to be in cash as long as you can quickly liquidate it.

Agree, the only requirement is sufficiently liquid, feel free to earn as much as possible given that constraint

If you can't withdraw money from your mutual fund, or put a charge on your credit card, paying rent for 6months is the least of your worries.

You could put it in a savings account where it earns .01% interest (which is what my bank is paying right now).

So that 250K would earn you a cool $25 in a year.

Ally still offers 0.5% fwiw, which would be $1250. Doesn’t keep up with inflation, but better than $25.

Business savings accounts generally give crappier rates than individual ones. I’m not aware of any major bank that gives anything greater than .05%.

Geez people - “checking account” should have been a relatively obvious figure of speech meaning “bank account”, or “cash and cash equivalents”.

https://en.wikipedia.org/wiki/Cash_and_cash_equivalents

When you pull a balance report for proving personal or business funds, your bank includes checking, money market, savings, etc., the literal type doesn’t matter as much.

(Also, for replies saying the 6 months worth should only be in a higher return higher risk account — things that can lose significant value — well, ideally, no, that’s what you do with everything beyond your six months cash and cash equivalents reserve, or carefully understand your risk exposure and ensure black swan deviations would still leave you above your reserve.)