SHOULD WE KEEP OUR EMERGENCY FUNDS IN TOUCH & GO e-WALLET?

Touch & Go e-Wallet currently pays an interest of approximately 3.49% (at the time of writing) paid daily if you deposit your money through the GO+. The underlying fund for GO+ is Principal e-Cash, a Shariah-compliant Money Market Fund.

Conceptually, it sounds great depositing our emergency funds in Touch & Go e-Wallet. It seems better than depositing our money into Fixed Deposit because it would provide better liquidity at a rate which is better than the 1-month Fixed Deposit. The 12-month Fixed Deposit may be on par with regards to the interest rate but loss hands down in terms of liquidity. Any withdrawal before the tenure ends, could be forfeited.

However, since Touch & Go e-Wallet is an on-the-go wallet, administratively or operationally, does it make sense to stash our emergency funds there? How discipline are we not to accidentally spend the emergency fund? This has nothing to do with the quantitative side of finance but the behaviorial side of finance (the one which is most difficult to conquer despite many best practice available). Not many can guarantee that it would not happened (truthfully)! Even though it makes quantitative sense, but may not put us at ease. We have to be always on our toes, to remind, ourselves, not to accidentally spend the emergency fund. Is it worth it walking down the road without a peace of mind?

Would we have better peace if the emergency funds are stashed into another account that have equal liquidity and generating almost the same return as Touch & Go e-Wallet such as Versa or Stashaway or even Money Market Funds? As for money market, they withdrawal time has a lag time between 2-5 days but still acceptable (need some pre-planning).

Finance is never just quantitative intelligence but workable systems which could give and make us peaceful rather than adding stress to our already stressful career and daily lives! Finance does not need to be hard!