Rainy day fund

What It Means

A rainy day fund is money set aside for costs you didn't plan for. (1) Some banks' guides, Chase's among them, use the name for a smaller cushion that covers minor or midsize surprises, such as a new dishwasher, and keep "emergency fundEmergency fundMoney set aside only for unplanned costs, like a car repair, a medical bill or a lost paycheck, kept where you can reach it quickly. See more" for large shocks like months without work. (2) Other sources treat the two as the same savings: the Federal Reserve's survey of household finances asks about emergency savings and rainy day funds in a single question.

How It Sounds at Home

• "Put it in the rainy day fund."
• "We've got a little saved for a rainy day."
• "The new tires came out of the rainy day money."

The Breakdown

Worked example. A household looks back at last year's smaller surprises (example numbers):

They have $300 put aside already and can add $100 a month, so the $1,250 still to go takes 13 months. At $150 a month it takes 9.

What the result means. Sizing a rainy day fund to last year's small surprises gives you a number grounded in your own life. The Consumer Financial Protection Bureau suggests looking at past surprise costs when you set a savings goalSavings goalA specific amount you plan to save by a set date for one purpose, which turns into a monthly or per-paycheck amount to set aside. See more. Once the fund is full, the next flat tire comes out of it instead of the grocery budgetBudgetA plan for a set period, usually a month, that lists the money you expect to receive and how you'll spend or save it. See more, and you refill it afterward. A job loss or a major repair is a different scale, and that's the job of an emergency fund measured in months of essential expenses.

One fund or two. Chase's guide treats the rainy day fund and the emergency fund as separate pots. Keeping one larger fund works too, as long as you know what share of it is meant for the big shocks.

Good to Know

In the Federal Reserve's report on household finances in 2025, published in May 2026, 55% of adults said they had emergency savings or a rainy day fund that would cover three months of expenses, the same share as in 2024 and down from 59% in 2021. Its survey treats the two names as one fund. The CFPB suggests keeping emergency savings in a dedicated account at a bank or credit unionCredit unionA not-for-profit financial cooperative owned by its members, offering accounts and loans to people within the field of membership its charter sets. See more, apart from everyday spending, and the same works for a separate rainy day fund.

Related Terms and Categories

• Emergency fund

  Money set aside only for unplanned costs, like a car repair, a medical bill or a lost paycheck, kept where you can reach it quickly.

• Sinking fund

  Money set aside in small, regular amounts for a known future cost, so the bill doesn't land on a single paycheck.

• Sinking fund vs emergency fund

  A sinking fund saves for costs you can put on a calendar; an emergency fund covers costs you can't predict, like a job loss or an urgent repair.

• High-yield savings account

  A savings account paying a variable interest rate that's generally higher than a traditional savings account's, often offered by online banks.

• Savings goal

  A specific amount you plan to save by a set date for one purpose, which turns into a monthly or per-paycheck amount to set aside.

Household money and budgeting