Find your ideal emergency fund size and the monthly savings to build it quickly - typically in 6-12 months.
Monthly SIP needed
₹24,199
per month for 1 years at 6% p.a.
Projections assume a constant return of 6% p.a. Mutual fund returns vary and are not guaranteed.
An emergency fund is the foundation of any sound financial plan - it is the money that keeps a job loss, medical emergency, or major repair from becoming a financial catastrophe. Without one, you are forced to take a personal loan at 15-24% interest or liquidate investments (often at a loss) when emergencies happen. The rule of thumb: keep 3-6 months of total expenses (including EMIs) in a safe, liquid account. This calculator helps you build that buffer as quickly as possible.
Your emergency fund target = Monthly expenses (including all EMIs) × 3 to 6 months:
Target = Monthly expenses × months of cover (3-6)
Since this is a short-term goal (build in 6-12 months), we use 6% return - liquid funds or high-yield savings accounts. Inflation adjustment is off because the amount is fixed, not a future purchase.
Where to keep it:
3 months if you have a stable government/large-company job, a working spouse, and no dependents. 6 months if you are self-employed, freelance, in a small startup, have dependents, or have existing health conditions. Go up to 9-12 months if your income is highly variable (commission-based sales, seasonal work).
Yes - in an emergency (like a job loss), you still have to pay your EMIs. Include all fixed monthly obligations: rent/home loan EMI, car loan, personal loan, insurance premiums. Missing these has consequences (NPA, credit score hit, insurance lapse) that compound the original emergency.
No. Equity can fall 30-50% in a market crash - exactly when you are most likely to need your emergency fund. The point of an emergency fund is certainty, not returns. Keep it in liquid funds, FDs, or a high-yield savings account. Safety and instant access matter more than 3-4% extra return.
Yes - this should be step 1, before SIPs. Exception: if your employer provides adequate term insurance and health insurance, and you have very stable income, you can build the emergency fund and start a small SIP simultaneously. But most people should pause non-compulsory investments until the emergency fund is fully built.
Best option: split between a sweep-in FD linked to your savings account (instant liquidation, ~7% return) + a liquid mutual fund (T+1 redemption). Avoid keeping the entire amount in a 0-notice savings account earning 3% - the return is too low for money sitting idle for years.
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