Use a separate account
Money that sits in your everyday account tends to get spent without you noticing. A separate savings account draws a clear line: this money has a job, and it isn't for groceries or weekends away.
Give the account a name in your banking app, such as "Emergency fund", so you see its purpose every time you log in.
Easy to reach, but not too easy
An emergency fund has to be available within a day or two, so avoid anything that locks the money away for years or charges a penalty to take it out early.
At the same time, a little friction helps. An account without a card, where you need to make a transfer first, makes it harder to dip into the fund for things that aren't emergencies.
Check the deposit guarantee
In the EU, deposits at a bank are protected by a national deposit guarantee scheme. Under EU law, the coverage level is €100,000 for the total deposits of each depositor at the same bank. The directive also sets a deadline of seven working days for paying covered deposits back, with some exceptions.
Before you open an account, check that the bank is authorised in an EU country and covered by a deposit guarantee scheme. If your savings ever grow above €100,000, the amount over the limit at one bank is not covered.
Why not invest money you need soon
Shares and funds can grow more over many years, but their value can also fall, sometimes for years. Money you may need within the next few years – your emergency fund or a goal such as a deposit for a home – should not depend on the market at that moment.
A worked example: you invest a €7,200 emergency fund and the value falls by 20% just as you lose your job. You now have €5,760 (7,200 × 0.8), €1,440 less than you planned for, at the worst possible time. In a covered savings account, the €7,200 is still €7,200.
What about inflation?
Interest on savings may not keep up with rising prices, so cash slowly loses buying power. That is an acceptable cost for money whose job is to be there when you need it. Money for goals many years away is a different story, covered in what inflation does to your money and investing basics.