Saving money and having an emergency fund is vital, especially during unprecedented times. You never know when you'll need to dip into those accounts to get yourself back on your feet.

However, while having a dedicated savings account is healthy for your financial future, it is possible to have too much money just sitting in an account. The biggest downfall of keeping a large amount of money in the bank involves missed opportunities.

According to Bankrate, in early 2021 the average savings account earned just 0.07% interest, and a high-yield savings account only nets a 1% return and in 2022, the average savings rate has dropped to 0.55%. With inflation around 7%, these amounts don't cover the cost of living, so your cash loses its value and purchase power.

Instead of placing a large sum of money in a savings account, consider shifting it into investment accounts that have greater income potential and growth. These can help you reach your long-term goals quicker. Some examples include stocks, bonds, and mutual funds. While these investments might be a bit riskier, they offer higher potential earnings, especially longer-term.

Before you pull the trigger and transfer your money, keep in mind that you should still keep between three to six months' worth of living expenses saved for emergencies. The amount you sock away depends on your personal situation and risk tolerance. The idea is that you want enough accessible cash so you can tap into it whenever you need it without having to rely on a personal loan or credit cards.

Do some research to determine what type of investment account works best for your needs. If you need further assistance or guidance when it comes to choosing investment options for your additional funds, reach out to a trusted financial advisor.

Sources: Bankrate.com, CNBC.com, Realsimple.com