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Are Online Banks a Good Place for Emergency Funds?

By Matt Koppenheffer and David Hanson - Feb 10, 2014 at 1:58PM

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Is it safe to keep your emergency cash stockpile in a bank with no physical branches?

In this segment of The Motley Fool's all-financials show Where the Money Is, Fool financial analysts Matt Koppenheffer and David Hanson take a question from a Fool reader on Facebook who writes, "Are online banks a good place for keeping emergency funds? Or is keeping it in a bank savings account or checking account better?"

The guys discuss why entirely online branchless banks like Bank of Internet (AX 0.82%) or Capital One 360 (COF 1.40%) make perfectly safe and sound alternatives to traditional banks and the importance of liquidity when planning an emergency fund.

David Hanson and Matt Koppenheffer have no position in any stocks mentioned. The Motley Fool recommends and owns shares of BofI Holding. It also owns shares of Capital One Financial. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Capital One Financial Corporation Stock Quote
Capital One Financial Corporation
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Axos Financial, Inc. Stock Quote
Axos Financial, Inc.
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