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2/26/2019

Emergency Savings Fund for Medical Care

You may be asking yourself, “Why do I even need an emergency fund?” Our answer: medical expenses.

Healthcare premiums, co-pays and maximum out-of-pocket costs are increasing every year. If you think your insurance provides a safety net, take a closer look. There may be a few holes. Insurance doesn’t always cover some necessary medical treatments, medications and expenses. When a car accident, heart attack, cancer diagnosis or chronic illness strikes, how will you pay for your care?

Costs of a medical emergency are increasing

  • $10,739. That’s the average Americans spent per year on medical care in 2017, according to CNBC.1
  • The increasing price of treatment and medication seems to be one of the factors pushing healthcare costs up. For example, The Atlantic reported that the price of one month of oral cancer medication increased by more than 450 percent - from $1,869 in 2000 to $11,323 in 2014. 2

It’s true, you could manage to cover some or all emergency medical expenses with credit cards, borrowing from friends and family or taking out loans. But those options can put you into debt and add further strain to your finances.

And while some people have set up crowdfunding initiatives to pay for unexpected and financially debilitating medical expenses, a 2015 Nerdwallet study found that only about 11 percent of healthcare fundraisers met their financial targets.3

Creating an emergency fund

Ease your worries about expected and unexpected medical expenses with a smart solution: create emergency savings.

Start by opening a separate emergency savings account for medical expenses or simply adding to an existing emergency savings account. Larger balances earn interest more quickly, so adding to an existing emergency savings account could grow your savings faster. Set up automatic deposits - even if it's only a few dollars a week to start, you’ll be set up for future success.

If growing your money faster sounds like a good idea, consider a savings account at an online-only bank. We’ll let you in on a quick tip: They offer higher interest rates than traditional brick and mortar banks. Plus, if you choose a bank with daily compounding interest, your money will earn interest every day. 

Remember, even healthy people have accidents or get sick. Promise yourself you’ll start your medical emergency fund today.

Make good on that promise by checking out the competitive rates and benefits of a Savings Builder account at CIT Bank.

From job loss to medical expenses, visit your one-stop shop for emergency savings information to get financially prepared for the unexpected.

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