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Emergency Fund

An emergency fund is cash kept in a safe, easy-to-reach place, such as a savings account or liquid fund, to cover unexpected expenses like job loss, medical bills or repairs. A common guide is three to six months of expenses.

Why It Matters

An emergency fund is what stops a bad month from becoming a debt spiral.

In India

A family that spends ₹40,000 a month might aim for ₹1.2 lakh to ₹2.4 lakh in an emergency fund.