- President Donald Trump's tariff actions could raise inflation, which would impact U.S. consumers.
- Consider boosting your emergency fund if you can't pay for unexpected costs or want more financial security.
- High-yield savings accounts and money market accounts are good places to keep an emergency fund.
President Donald Trump has remained committed to imposing tariffs.
Tariffs on Canada and Mexico are currently on hold, but it is uncertain if he will follow through with additional taxes on these important trade partners. Meanwhile, China has already been hit with a 10% across-the-board tariff, prompting retaliatory actions from Beijing. He's also announced tariffs on steel and aluminum imports.
Most recently, Trump has called for "reciprocal tariffs" on other countries.
Economists have warned that tariffs could raise inflation, which would impact consumers. Now more than ever, it is clear that Americans must prioritize emergency savings in the face of economic uncertainty.
Here are two signs that you might want to boost your emergency fund for the year ahead, and where to find the best banks to keep your savings.
1. You don't have money for unexpected costs.
If you don't yet have an emergency fund, your first priority should be to start one. This fund is a separate savings account dedicated to covering unexpected costs, such as home repairs or medical bills.
The idea of saving for unprepared expenses can feel overwhelming, but even small contributions make a difference. Instead of focusing on a large target upfront, begin with a manageable amount to establish a financial cushion.
"Is there a number on a monthly basis, that's meaningful yet doable, that you can put aside for the rainy day?" says David Johnston, CFP® professional and managing partner of Amwell Ridge Wealth Management. "Maybe it's even $100 a month. It's probably not going to get anywhere near my six month minimum I spoke to but at least it's better than that might be zero today."
Building an emergency fund isn't about saving aggressively at all times. It's about creating a strategy that fits your financial situation. Setting realistic goals and consistently setting aside a set amount can make all the difference in establishing emergency savings.
One helpful tip would be to pay yourself first by allocating any disposable income to your savings before necessary expenses like bills.
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2. You want more financial security.
Some industries could face layoffs or declining revenue this year. While these losses may be temporary for companies, job security could remain uncertain. Businesses also take time to recover from tariff-related costs.
"People who work for corporations that are heavily involved in international trade and or buy/sell from international partners should be the most concerned about job security," says Johnston. "While inflation has tamed a bit, key costs like energy, food, and housing are still higher than what they were just a few years ago. Tariffs could drive prices up further, worsening inflation in the short run."
A dedicated emergency fund is more essential than ever to help weather these challenges.
Certified financial planners (CFPs) typically recommend keeping an emergency fund of three to six months' worth of expenses. However, if you want more financial security some experts suggest extending that range to six to 12 months to account for job insecurity and inflation risks.
With tariffs potentially worsening price increases and inflation rates, reassessing budgets and investing long-term savings for a high return can also provide additional stability during economic uncertainty.
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Where to keep your emergency savings
Whether you're looking into high-yield savings accounts or even a money market account, it's essential to explore options that protect against inflation and financial instability.
Financial advisors recommend keeping your emergency savings in a liquid and easily accessible account with no penalties or restrictions on withdrawals. It's also essential to choose an option with FDIC protection to safeguard your funds from market volatility and unforeseen events like bank failures.
With a standard savings account, your money may lose significant value as interest rates rise. The average savings account only pays 0.41% APY, and many big banks pay even less than the average, around 0.01% APY. To counter this, consider a high-yield savings account or a money market account, both of which offer higher interest rates to help your savings grow. The best rates currently pay at least 3.75% Annual Percentage Yield (APY), and securing a rate above the inflation rate ensures your emergency fund retains its purchasing power.
Some popular high-yield savings accounts include SoFi® Checking and Savings (Member FDIC), American Express® High Yield Savings Account, and Discover® Online Savings Account.
A money market account is particularly interesting because it combines the benefits of a savings account with some features of a checking account. These accounts typically offer higher interest rates than standard savings accounts while allowing limited check-writing or debit card access, making them both flexible and secure for emergency funds. Plus, money market accounts are FDIC-insured (up to $250,000 per depositor, per bank), providing protection against bank failures.
If you're considering a money market account, some options to explore include Quontic Money Market Account(4.25% APY) , Brilliant Bank Surge Money Market Account,(4.40% APY) and Vio Bank Cornerstone Money Market Savings Account(4.41% APY). All three of these money market accounts offer competitive rates, making them great options for resilient emergency funds.APYs (Annual Percentage Yields) are accurate as of 04/11/2025.
By choosing the right account, you can keep your emergency fund both accessible and resilient against inflation.
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