Emergency Fund

My wife and I keep $10,000 in a money market account for an emergency. If an unexpected car repair comes up or someone is held for ransome, that money is always there and ready. However, since it is a large sum of cash just sitting there, I would like to maximize the income I get from it. Right now it is only making about 3%.

I read the other day about laddering CDs. The idea was to take 1/6 of your fund and buy a 6 month CD. Wait a month and buy another. Keep buying them until you have 6 6 month CDs expiring about a month apart. That way you will always have some money available and be making a little better interest rate. The only drawback is, if you needed it all at once, you would lose any money it had made.

I'm open to other ideas. Anyone else have any strategies?

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"Crush your enemies, see them driven before you, and hear the lamentation of the women!"
Conan

"Without change there can be no improvment."
Zeek: The Art of Shen Ku