If your incomes stops then it takes care of your cost of living. This emergency fund atleast 6 months ideally 12 months and where to keep it ?
70% in an fd
20% in your bank account
10% in cash
so that ,god forbid whenever if you need money you can deploy this emergency fund
FAQs About Emergency Fund in India
How much should be the emergency fund in India?
People in stable jobs are recommended to put away 3-6 months’ salary into their emergency fund, whereas people with lower job security are recommended to save 6-12 months’ salary. A stable income ensures a consistent and bigger emergency fund.
Conclusion
Emergency fund should be kept in liquid avenues such as fixed deposits, liquid funds and overnight funds. While fixed deposits can be accessed in hours, some liquid funds offer instant credit of redemptions subject to conditions. Avoid investing your emergency fund in stocks or equity funds.