An emergency fund covers job loss, medical surprises or urgent repairs without selling mutual funds at a loss or taking expensive personal loans.
How much to keep
- 3 months expenses — dual income, stable government job
- 6 months — single income salaried household (common target)
- 9–12 months — self-employed, commission income or high EMI burden
Where to park emergency fund
- Savings account + liquid mutual fund split
- Short FD ladder for portion you may not need instantly
- Avoid equity or long lock-in for core emergency corpus
Build order
- Clear high-interest debt first if small
- Save ₹500–₹5,000/month until 1 month buffer
- Scale to full target before aggressive SIP increases
Use Master Calc Emergency Fund Calculator. Track progress with Saving Calculator.
Disclaimer: Personal finance varies. Adjust months per your job stability.