The second part of the traditional advice on emergency funds is to keep the money liquid. Many investments, including mutual funds and the stocks traded on major exchanges, are liquid in the sense that you're able to sell (or "liquidate") them and get your hands on the proceeds within a few days. However, you have no assurance that those proceeds will be enough at that point. "The stock market tends to go up two years out of three," says Boone, "but that still leaves you with a one-third chance that you'll have to pull money out when it's down. There's a reason that almost every professional money manager carries at least a bit of cash."

By cash, most financial planners mean a bank account from which you can withdraw without penalty, such as a checking account, or else a money-market fund at a mutual-fund company. Even very-short-term CDs or short-term bond funds stretch the definition a little, since CDs come with early-withdrawal penalties and bond funds can fluctuate in value.

Rose, the Philadelphia financial planner, currently recommends the ING Direct Orange Savings Account (www.ingdirect.com), which is FDIC insured and was recently paying an annual interest rate of 3.5 percent. The ING account is accessible online or by phone and links to your existing checking account for withdrawals. Rose's other favorite is the Vanguard Prime Money Market fund, part of the fee-frugal Vanguard Group (www.vanguard.com). It was recently paying an annualized yield of 3.72 percent.

Both the ING Direct and Vanguard accounts have an added advantage. While they're easy enough to get money out of in a real emergency, neither makes it so effortless that you'll be tempted to drain them for everyday expenses. ING has that added step of requiring you to move money into a checking account before you can write checks. The Vanguard money-market fund lets you write checks, but only for $250 or more.

Finally, if you ever do need to tap into your emergency fund, be sure to replenish it as soon as you can after the crisis passes.