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Emergency Fund — How Much and Where to Keep It
Question 1 of 7
Multiple choice
Why is an emergency fund kept in a savings account rather than invested in index funds?
Savings accounts earn more interest than index funds over long periods
Emergency funds need to be immediately accessible and stable in value — market investments can drop 30–40% when you might need the money most
Index funds charge fees that make them unsuitable for emergency savings
The IRS requires emergency funds to be in bank accounts
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