(SMARTASSET.COM) February 1, 2017 — We all know it’s important to save, but there are different kinds of saving. One is saving for retirement. This is generally an ongoing form of saving, in a 401(k), IRA or other retirement account that comprises a mix of stocks and bonds. Another is saving a smaller amount in a more liquid form, to keep on hand as an emergency fund. That’s where savings accounts come in.

Savings accounts are safe places to stash your emergency fund, which experts say should equal at least 3-6 months of living expenses (more if your job is less stable or you are the sole breadwinner of your family). Why do you need this money in a liquid account like a savings account?

For one thing, it’s a good idea to keep some savings separate from your retirement accounts because if you tap into retirement accounts before age 59 1/2 you’ll pay a 10% early withdrawal penalty, plus taxes.

For another, you may need to access your emergency fund in a hurry to cover a medical bill, keep you afloat while you look for a new job or pay for immediate car or home repairs. In that case, you don’t want to be scrambling to sell stocks to raise the funds you need.

With a savings account, you get a high amount of liquidity, which means accessing your savings in an emergency is quick and easy. Plus, you can rest easy knowing that a stock market crash isn’t going to wipe out your rainy day fund. Your deposits are insured by the federal government, too.

Source: smartasset.com/checking-account/savings-account-comparison?