The first part of this answer is very easy – whatever makes you comfortable. Keep in mind that checking accounts typically pay almost nothing, so you might also want to utilize a savings or money market account that pays more.

How much cash should you keep on hand? Three to six months’ worth of expenses is generally appropriate for an emergency fund. The amount could be higher if you are single, have lumpy cash flows, or an uncertain job. That way, you always have a cushion in case something unexpected comes up. It can be higher or lower depending on your situation.

You always have access to funds from your investment portfolios, but that can several days to free up and send to you. This option should be viewed more as a backup plan.