What is a good way to invest money, something with high liquidity?

I have a tax deferred annuity...which I get taxed the heck out of if I try to take money out before I'm 59 1/2 years old (i'm 25 right now). I want to continue saving long term but do need an emergency money fund. What is the best way to grow my money but be able to take it out whenever I want without penalites.

What is a good way to invest money, something with high liquidity?
A money market account would be one way, and another good way would be a CD the only thing with CD's are they usually require a minimum amount of money and they usually require you to put it in for a minimum amount of time 3 months is usually the shortest term. The interest rates are usually better than a savings account. However there is always INGDirect.com which is a online bank that offers really good interest rates on savings accounts.
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Reply:Geez, who convinced you to buy an annuity at your age?





You would most likely have needed access to that money to buy a home, kids college , etc.





And tax deferral isnt great because the rate is higher than capital gains rates... and with our deficit, it is unlikely that your tax rate will be lower when you retire. To the extent you can, I would avoid paying additional premiums into your annuity.





Also not, your broker probably gets a commission rate of up to 8% of premiums for your purchasing the annuity. So, dont take their word for it.