Question 1

How many months of expenses should emergency fund cover?

Accepted Answer

A practical range is 3 to 12 months depending on employment stability, dependants, and insurance coverage. This tool personalizes that range.

Question 2

Is liquid mutual fund suitable for emergency corpus?

Accepted Answer

Liquid funds are commonly used for emergency parking due to relatively quick access and better return potential than savings accounts, with moderate risk.

Question 3

Is FD interest on emergency corpus taxable?

Accepted Answer

Yes, FD interest is generally taxable per your slab. This calculator shows indicative post-tax return comparison across parking options.

Question 4

Should freelancers keep larger emergency funds?

Accepted Answer

Usually yes, because income variability is higher. Freelancers and self-employed households often require a higher buffer than salaried profiles.

Question 5

Emergency fund vs contingency fund - what is difference?

Accepted Answer

Emergency fund is typically for income disruption or essential unexpected expenses. Contingency buckets may include broader irregular planned events.

Option	Pre-tax Return	Post-tax Return	Liquidity	Risk
Savings Account	3.00%	2.40%	high	low
Liquid Mutual Fund	6.50%	5.20%	high	moderate
Short-term FD	7.00%	5.60%	medium	low

Emergency Fund Calculator - Target Amount + Best Parking Option

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