Employer-sponsored emergency-savings accounts are becoming a hot perk. Here's how they work.

By Venessa Wong

Americans, squeezed by high prices and a weak job market, struggle to save for emergencies on their own. In response, many companies are offering emergency savings as a workplace benefit.

In one survey, 79% of employers said emergency savings had become an "extremely important" or "very important" focus within their financial well-being programs.

As an employer, Noreen King said, one of her goals is "to make sure everyone's OK" - including when emergencies come up for her workers.

While her medical-device company, Evolve Manufacturing, had given workers financial assistance on an ad hoc basis over the past 25 years, it didn't offer such aid to employees across the board. So when the CEO heard about SecureSave - a fintech platform that allows employers to open and contribute to worker-owned emergency-savings accounts - she saw it as a more systemic way to help employees prepare for the unexpected.

Since Evolve introduced this savings benefit in October 2021, about 75% of employees have opted in, she said. Those who enroll receive a $25 contribution from Evolve per paycheck, and can also choose to automatically contribute a dollar amount from their after-tax pay.

"It really cost me very, very little, but it's a great benefit," King told MarketWatch.

One Evolve employee, who asked not to be named, said when her mother got sick in 2024, she was able to pay for a plane ticket home using her workplace emergency-savings account rather than having to borrow the money from a relative. In total, she has withdrawn $8,000. Another worker said he used $200 from his account to replace a tire that blew out on his way to work.

As savings have become the leading financial priority for Americans amid stubbornly high prices and a weaker labor market - and as employers look to boost productivity by improving workers' financial well-being - a growing number of employers are introducing emergency-savings accounts, or ESAs, as a dedicated benefit alongside established workplace savings programs such as 401(k)s and health savings accounts.

Related: Americans are 'revenge saving' after years of splurging: 'Savings are a great way to have some certainty'

Meanwhile, a Joe Biden-era law called the Secure 2.0 Act has the potential to further proliferate mini savings funds in the next few years, experts told MarketWatch. Starting in 2024, this law allowed employers to auto-enroll workers in so-called in-plan ESAs, meaning those linked to existing retirement accounts, up to a maximum balance of $2,500. It made emergency savings a policy priority.

When "you've got income insufficiency challenges and rising costs - particularly healthcare, transportation, housing, the things you just need to live - and you put all of these things together, I think it's why emergency-savings accounts are having a moment," Matt Bahl, vice president of workplace at the nonprofit Financial Health Network, told MarketWatch.

Already, 37% of employers say they offer some form of emergency savings, according to a 2024 survey by the Employee Benefit Research Institute - although the most common form was still a 401(k) loan, which financial experts say should be a last resort, as it threatens future retirement funds.

Dedicated ESAs, a relatively new benefit category, are drawing plenty of attention: 79% of employers in the EBRI survey said emergency savings had become an "extremely important" or "very important" focus within their financial-wellbeing programs.

Fidelity, which started offering an "out-of-plan" ESA called Goal Booster in 2019, told MarketWatch the company "has seen demand for emergency-savings benefits from employers nearly double each year over the past two years - a clear sign of momentum." Out-of-plan ESAs are those not linked to a retirement plan.

Vanguard, which launched its Cash Plus Account as an out-of-plan emergency-savings option for employers in 2024, told MarketWatch it has "seen strong adoption and growth."

Meanwhile, SecureSave enrollment is up about 20% over the last year. Another out-of-plan ESA platform, Sunny Day Fund, told MarketWatch its number of enrolled employers doubled this year.

How workplace emergency-savings accounts work

While financial-wellness experts recommend automating emergency savings from the paycheck, as is standard for retirement, only 25% of Americans do so, according to a 2025 NerdWallet poll. Instead, people tend to save at random times when they have extra money. The result: 32% of people say they have no emergency savings, and the median amount saved for emergencies is $500, according to an Empower survey in June.

The next stop, for many, is high-interest credit-card debt. One in four people surveyed by Bankrate in May said they would pay for an unexpected emergency by financing it with a credit card and paying it off over time.

Related: 5 mental tricks to reset your relationship with credit cards as Americans pile on debt

About six years ago, employers started testing different kinds of emergency-savings benefits to help address the issue.

"When you have access to an [account] connected to your paycheck that's essentially vetted by your employer, and a continued message that this is something you can do, it really can help people to get closer to" their savings goals, said Timothy Flacke, cofounder and CEO of Commonwealth, a nonprofit focused on improving financial stability for low- and moderate-income workers.

Employers have several options: Outside of retirement plans, they can partner with platforms such as SecureSave and Sunny Day Fund to enable workers to set aside part of their paycheck into regular FDIC-insured savings accounts at partner banks - similar to a split direct deposit - and can offer a contribution or match. Both of these services charge employers a fee based on the size of their workforce. For example, SecureSave charges small businesses $99 per month and large enterprises $999 per month.

Companies can also add out-of-plan ESAs through their existing benefits providers; for instance, Fidelity, Vanguard and T. Rowe Price offer workplace clients an out-of-plan emergency-savings product at no charge.

Starting last year, changes under the Secure 2.0 Act created two additional options through workplace retirement plans. First, they allowed employers to automatically enroll employees who are not highly compensated - in 2025, the limit is $151,164 - in dedicated in-plan emergency-savings accounts and contribute up to 3% of their paychecks, up to a balance of $2,500.

The hope is that the automatic-enrollment feature within retirement plans, which is not permitted in out-of-plan accounts, "could supercharge [the ESAs'] effect on savers' overall financial security," according to a report from the Bipartisan Policy Center.

Second, Secure 2.0 gave employers the option to allow penalty-free withdrawals from retirement accounts of up to $1,000 in a year for emergencies, with no further withdrawals for the next three years unless the distribution was repaid.

Although workers with out-of-plan accounts have full access to their dollars at any time, SecureSave embeds behavioral-finance psychology in the product design "to make sure people aren't endlessly raiding the accounts," Devin Miller, SecureSave co-founder and CEO, told MarketWatch.

For instance, the banks don't issue debit cards for these accounts. Also, while SecureSave doesn't define what an emergency is or limit what the money can be used for, the app prompts users to specify the emergency for which they need the funds. The buttons also use labels like "Get Emergency Money" instead of "Withdraw" or "Transfer."

These features "create a little bit of a speed bump," Miller said. "If you just call this a generic 'savings account,' people start to disassociate it from emergency savings" and end up using it for routine consumption.

So far, the top five reasons SecureSave users said they needed emergency funds were inflation (16%), car/transportation (7%), home (6%), healthcare (5%) and travel (4%).

How emergency savings became a workplace issue

The effort to build emergency savings as a workplace-benefit category kicked off in earnest in 2019, when the investment firm BlackRock launched a $50 million program called the Emergency Savings Initiative with Commonwealth, the Financial Health Network and Duke University's Common Cents Lab to develop employer-based savings solutions for low- to moderate-income workers.

Sunny Day Fund founder Sid Pailla launched his platform that year as well. "The default [in the U.S.] is getting a paycheck and saving for retirement - that's it," Pailla told MarketWatch. "You're not getting automated into saving up for everything in life that happens between now and retirement. You're supposed to figure that out on your own."

Soon after, SecureSave, co-founded by Suze Orman, launched in 2020 as high unemployment rates during the pandemic exposed the financial precarity of the average American worker.

"It was a watershed moment; building emergency savings into the fabric of an organization was no longer a question of if, but how," a BlackRock report said.

Research later showed increased productivity and improved worker safety resulted from employees feeling less financially stressed, solidifying a business case for workplace emergency savings.

Is America on the verge of a workplace-savings revolution?

Heightened economic volatility this year has spurred some personal-finance experts to suggest keeping six to 12 months' worth of expenses in emergency savings. And with Americans naming saving as their top financial goal, interest in workplace savings programs is high, surveys show.

Read more: Your cash emergency fund probably isn't going to cut it in this economy

In addition to the 37% of employers that told EBRI in 2024 they already offered an emergency-savings fund, another 40% said they planned to offer such a benefit in the next year or two.

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09-24-25 1444ET