Emergency Fund: Many people are worried about the future but very few prepare to deal with this situation. If we lose our job or face loss in our business, what should we have so that we can bear this problem for a few days? Experts suggest emergency fund as an option for this.
Every person must create an emergency fund according to his expenses. Having an emergency fund makes people financially strong. However, many people have a question in their mind whether the emergency fund should be kept in the bank or it should be invested.
How much should be the emergency fund?
Even if you lose your job or stop earning money, some money is deposited in the form of a fund so that all your work continues smoothly for a few days. This is called emergency fund. Depending on your expenses and needs, it is advisable to keep an emergency fund equal to your monthly income of 3 to 6 months.
How to handle emergency fund?
Many experts believe that you should keep your emergency fund in a savings account. This is because, you can easily withdraw it from your account during emergency. However, you do not get much interest by keeping funds in a savings account.
In such a situation, you can invest some part of the emergency fund in safe investment options. However, before investing, you should get complete information about withdrawing money. So that you can easily withdraw money during emergency. Also, you should not suffer any kind of financial loss.
You can invest in FD
If you are thinking of depositing some part of your emergency fund in other investment options, then FD can be a good option for you. However, while investing you should choose short term FD. So that you do not have to wait long for money in times of emergency.
Disclaimer: (The information provided here is being given for information only. It is important to mention here that investment in the market is subject to market risks. Always take expert advice before investing money as an investor. ABPLive.com never advises anyone to invest money here.)
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