Key Takeaway: Keep 3-12 months of expenses in liquid assets. Savings account (40%) + Liquid funds (40%) + FD (20%).
Why You Need an Emergency Fund
An emergency fund is your financial safety net for unexpected expenses — medical emergencies, job loss, or urgent repairs.
How Much Do You Need?
• Salaried with stable job: 3-6 months of expenses • Single income family: 6-9 months • Freelancer/Business: 9-12 months • Nearing retirement: 12+ months
Where to Keep It
1. Savings Account (40%) — Instant access 2. Liquid Mutual Fund (40%) — Better returns, 1-day withdrawal 3. Fixed Deposit (20%) — Higher returns, break if needed
Rules for Emergency Fund
• Build it BEFORE aggressive investing • Never invest this in stocks or equity • Don't use for planned expenses • Replenish immediately after using