Here's where you should store your emergency savings

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According to troubling research from the Federal Reserve, nearly half of Americans wouldn't have enough money on hand to cover a $400 emergency.

"No matter how well you plan or how positively you think, there are always things out of your control that can go wrong," David Bach writes in his bestseller "The Automatic Millionaire," which is being re-released this December.

"People lose their jobs, their health, their spouses. The economy can go sour, the stock market can drop, businesses can go bankrupt. Circumstances change. If there's anything you can count on, it's that life is filled with unexpected changes," wrote Bach, who has spent 25 years in the wealth management industry and became a millionaire by age 30 by increasing his automated savings over several years.

Bach recommends building up an emergency fund with at least three months' worth of expenses. Now, don't stash it under your mattress, or even in a traditional checking or savings account, he says.

Bach says the best place to keep your emergency fund is in a money market account. It will keep your money safe and liquid, he says, and you could earn an interest rate of 1%, compared with the much lower 0.01% on a traditional savings account. These accounts can offer a higher interest rate because they usually require a minimum balance, which can vary widely depending on the bank (and if you dip under the minimum, you may incur a monthly fee). Check out NerdWallet's list of the best online money market accounts for options.

Most importantly, he told Business Insider in a recent Facebook Live interview, "the key to the emergency account [is] don't have an ATM card and don't have a checking account." This way, "there's a better chance you won't touch" the money before a true emergency, he said.

Additional reporting by Kathleen Elkins.

Watch more from Business Insider's FB Live interview with David Bach:

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