How big should your emergency fund be, and where should it sit?
Three months for a dual-income salaried couple, nine for the self-employed, and never in the same account you spend from.
By My Money & MeOct 8, 20261 min read
Key takeaways
- Size it on essential expenses, not total spending.
- Keep it liquid and boring: savings account, sweep-in FD, liquid fund.
- Refill it before restarting SIPs after you use it.
An emergency fund is the money that stops a bad month from becoming a bad decade. It covers a job loss, a hospital deposit, a parent's surgery or a car that dies on the highway, without touching investments or taking a personal loan at 16%.
How many months
| Your situation | Months of essential expenses |
|---|---|
| Two salaried earners, no dependants | 3 |
| One salaried earner, or dependants | 6 |
| Self-employed, freelance or business income | 9 to 12 |
Count essential expenses only: rent, EMIs, food, utilities, school fees, insurance premiums. Streaming subscriptions and weekend plans pause in an emergency.
Emergency fund size
Defaults come from the India rule pack india-2026-27.v1. Change any of them.
₹40,000
₹0
Emergency fund target
₹2.4 L
- Shortfall
- ₹2.39 L
- Months covered today
- 0
Educational estimate. Returns are not guaranteed; taxes and charges are not included unless stated. · india-2026-27.v1
Where to keep it
- One month in a savings account you do not spend from day to day.
- The rest in a sweep-in fixed deposit or a liquid mutual fund; both pay more than savings interest and can be withdrawn within a day.
- Not in equity funds, gold or your PPF; prices fall at the worst moments and lock-ins defeat the purpose.
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