What Is Emergency Fund?

What Is Emergency Fund?

Emergency funds are money kept aside in low-risk instruments like bank accounts, FD, or liquid mutual funds to take care of significant unforeseen expenses into health, jobs, business, etc.

An emergency fund is also essential to not be forced to sell your stocks and mutual funds in losses during urgent money requirements.

How Much Should Be Your Emergency Fund? 

You can keep 6-12 months of monthly expenses in an emergency fund.

How To Create Emergency Fund?

- Pause Investments  - Delay some expenses  - Use bonuses, maturity, Or tax refunds to save for emergency fund

Where To Park Emergency Fund?

- Bank  - Fixed Deposits  - Liquid Mutual Funds  - OR Combination of all