The purpose of an emergency fund is to make sure you have cash you can quickly get your hands on when something very big and very bad happens to you or your family. Your emergency fund is not a piggy bank to tap for ordinary living expenses or to give yourself a “special treat.” So, it is a bad idea to keep your emergency fund in cash in your house or in your checking account because this makes it too easy for you to spend it.
On the other hand, it is also a bad idea to put your emergency fund into a certificate of deposit (CD) or similar long-term savings product because you have to leave your money in the CD for at least six months. If you take the money out earlier, you will pay a big penalty. Since an emergency could happen while your money is locked up in a CD, you should not put your emergency fund in a CD.
So, the best place to put your emergency fund is in a savings account. For my advice on savings accounts, put the words “savings account” in the search engine on the right side of this website.