Emergency Fund Calculator
Calculate your ideal emergency fund size based on your expenses and risk factors
Rent, groceries, utilities, etc.
Home loan, car loan, credit card
Liquid funds available now
Spouse, children, parents
Fund Composition
Current vs Recommended
| Category | Months | Amount |
|---|---|---|
| Living Expenses | 3 | ₹1,50,000 |
| Medical Buffer | - | ₹1,50,000 |
| Total Recommended | - | ₹3,00,000 |
Urgent Action Needed
Your emergency fund is critically low. Prioritize building it to at least 3 months of expenses.
Understanding Emergency Funds in India
An emergency fund is your financial safety net - a dedicated savings pool to cover unexpected expenses like medical emergencies, job loss, home repairs, or urgent travel. For Indian households, having an adequate emergency fund is crucial given rising healthcare costs, economic uncertainties, and limited social security coverage.
Why You Need an Emergency Fund
- Job Loss Protection: Average job search in India takes 3-6 months
- Medical Emergencies: Cover hospitalization and treatment gaps in health insurance
- Home/Vehicle Repairs: Handle urgent maintenance without debt
- Family Emergencies: Support family members during crises
- Peace of Mind: Reduce financial stress and anxiety
How Much Emergency Fund Do You Need?
The standard recommendation is 3-6 months of expenses, but your ideal emergency fund depends on multiple factors:
- Income Stability: Salaried employees need less than freelancers/business owners
- Dependents: More family members = larger fund needed
- Health Insurance: Good coverage reduces medical emergency needs
- Debt Obligations: EMIs must continue even during emergencies
- Industry Risk: Volatile industries need higher buffers
Where to Keep Your Emergency Fund
Emergency funds should be liquid, safe, and easily accessible. Best options in India:
- Savings Account: Instant access, 2.5-3.5% interest
- Liquid Funds: T+1 redemption, 4-6% returns
- Overnight Funds: T+1 redemption, slightly lower than liquid funds
- Fixed Deposits (sweep-in): Higher interest with liquidity
- Combination Approach: 1 month in savings, rest in liquid funds
Emergency Fund Building Strategy
Building an emergency fund takes discipline. Follow this approach:
- Start Small: Aim for ₹50,000-1 lakh as initial target
- Automate Savings: Set up monthly auto-transfers on salary day
- Allocate Windfalls: Use bonuses, tax refunds for emergency fund
- Separate Account: Keep emergency funds in dedicated account
- Replenish After Use: Rebuild fund immediately after withdrawals
Common Mistakes to Avoid
- Investing emergency funds in equity or locked-in instruments
- Using emergency funds for non-emergencies (vacation, shopping)
- Not adjusting fund size as expenses increase
- Keeping entire fund in zero-interest savings account
- Forgetting to account for EMIs and fixed obligations