An emergency fund is money you set aside for unexpected situations like job loss, medical emergencies, or urgent repairs. It acts as a financial safety net so you don't have to borrow money or sell investments during tough times. Most experts suggest keeping 3 to 6 months of your monthly expenses in an easily accessible account.
₹35,000 × 4 months = ₹1,40,000 to ₹35,000 × 6 months = ₹2,10,000💡 Priya should aim for ₹1.4L to ₹2.1L as her emergency fund. She keeps ₹50k in savings (instant access) and the rest in a liquid fund.
A general rule is 3-6 months of your monthly expenses. If you have a stable government job, 3-4 months may be enough. Freelancers or those with variable income should aim for 6-9 months.
No. Emergency funds should be kept in liquid, low-risk options like savings accounts or liquid mutual funds. The goal is quick access, not returns.
Regular FDs have lock-in and penalty for early withdrawal. Sweep-in FDs are better as they offer FD returns with savings account flexibility.
It depends on your monthly expenses. If you spend ₹25,000/month, ₹1 lakh covers 4 months, which is reasonable. Calculate based on your actual expenses.
Yes. An emergency fund is the foundation. Without it, you might need to sell investments at a loss during emergencies. Build this first, then invest.
Split it: keep 1-2 months in a savings account for instant access, and the rest in a liquid fund or sweep-in FD for slightly better returns.
⚠️ Disclaimer: This tool is for educational purposes only. It provides general guidance and is not financial advice. Please consult a certified financial planner for personalized recommendations.