With savings accounts paying gnat-like interest and the stock market swooping like a moth-crazed bat, where is a cautious ant to keep emergency savings? If you're just starting out to build a rainy day fund, the answer is simple: Any bank savings account or even an old-fashioned piggy bank may do.

But as you build closer to the recommended three- to 12-months' essential expenses, you should structure your emergency fund to yield as much return as possible consistent with near-total absence of risk. This last concern is critical, says Leslie Thompson, a CPA and financial advisor at Indianapolis wealth management firm Spectrum Management Group. "Their emergency money needs to be safe and ready to access when needed," she stresses.

Cash, of course, is the ultimate in readiness. Most transactions today can be done with a credit or debit card. But you may keep a few hundred or even a few thousand dollars in folding money where you can get it in a real crunch. After all cards can be lost and ATM machines, and card readers may not work after earthquakes, hurricanes, or wildfires.

Old-fashioned cash has a role in many emergency funds, confirms Stephen Davis, president of Concord, New Hampshire, financial planning firm S.G. Davis. "A lot of our clients feel they need to have cash," he says. "I have one client who felt she needed $5,000 stashed at home, and I don't have an issue with that."

Davis does have an issue with keeping cash in an unsafe manner. Theft is a concern, but so is fire. He recommends keeping cash emergency funds in a fireproof safe or at least in a metal container. One option: "Dig a hole in the ground, and put it in a coffee can."

After you've taken care of post-apocalyptic possibilities, experts advise putting the bulk of your emergency funds in an ordinary bank savings account. Bank accounts are insured against loss, so this is a nearly perfectly safe solution.

Ideally, your rainy day savings account will be linked to your checking account so you can access it more or less instantly. But never just leave the money in your checking account, Thompson emphasizes. That makes it too easy. "People are more apt to spend it when they can see it," she says.

Bank savings accounts today pay only token interest, of course, typically a fraction of a percentage point a year. To get a little more earning power from rainy day funds, Thompson sometimes recommends a short-term bond fund.

Short-term bond funds yield more interest than savings accounts, in excess of 1% annually. And Thompson says funds offered by large providers such as Fidelity will often be accessible within 24 hours, making them suitable for all but the most pressing emergencies.

Bond funds are not insured, however. And, especially if interest rates rise, there is a risk of loss of principal. "Not much," Thompson says, "but it's possible that the value may be less than what you put in."

Bank certificates of deposit are insured, making them as safe as bank accounts. CDs earn interest rates that vary depending on the term, but are generally between savings accounts and short-term bond funds. The downside is accessibility. Funds placed in a CD are locked up for the term of the CD, typically six months to two years.

Davis suggests managing availability by laddering CDs, purchasing several in different terms so that one will always be coming due in the not-too-distant future. Whether you ladder or not, make sure you have enough in a savings account to tide you over an emergency until the CD matures and you can withdraw from it without penalty.

Ultimately, the size and structure of your emergency fund is determined by your own needs and tolerance for risk. If you own a home and car, for instance, unexpected repair bills may be more likely for you than for someone who rents and rides public transportation. Some careers may also be more likely to involve spells of unemployment.

What is important is to have a plan. Davis says one client kept impulsively stashing cash around her home and forgetting about it. When she finally did a comprehensive search and inventory, she'd squirreled away $30,000.

Such cash hoarders risk loss by theft or disaster and also can make settling an estate needlessly challenging for heirs. So Davis says it's vital to make accurate records of your emergency stash, and to treat the records as if they were as valuable as the money itself. "If you're going to keep cash, have a detailed letter somewhere other than in the house as to where in the house it is," he says.

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