Should I keep emergency savings in cash or high-yield savings?

For most people, the best place for emergency savings is a high-yield savings account (HYSA) rather than cash. It keeps the money liquid, earns interest, and deposits are generally insured by the FDIC or NCUA up to the applicable limits.

A small amount of physical cash at home can be useful as a backup for short disruptions like power outages, natural disasters, or temporary banking/ATM outages, but I wouldn’t keep a large share there because cash can be lost, stolen, or damaged and it doesn’t earn interest.

A practical approach is to keep the bulk of your emergency fund in a HYSA and only keep a modest cash buffer at home if you want one. There isn’t one universally “best” split, and the right amount of cash depends on your household, risks, and comfort level. If you do keep cash, small bills are usually more useful than large ones.

If you choose to store cash at home, use a secure place that you’re comfortable with, but I wouldn’t assume any particular storage method is the best in all cases—home security needs vary.