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where do you keep your emergency funds?

  • Thread starter Thread starter Alex292929
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where do you keep your emergency funds also do you have a separate bank account for that?
Emergency fund is for emergency - unexpected and unplanned. So I keep some amount in cash at home and rest in high-yield savings account (separate bank) with netbanking & debit card enabled for transactions.
 
For Emergency Funds, i would suggest to keep it in Post Office with net banking enabled. It's completely safe as it is wholly owned by govt and also gives 4% interest which anyway is better than 2.75%-3% offered by the D-SIBs. Another way is you can put it in 6 months or 1 year bank FDs in the large bank say HDFC or SBI or ICICI the interest rates are up now-a-days you can also book it for longer tenures... especially if booking with FD in HDFC Bank it currently offers 7% with an annualized yield of 7.2% approx... book it online so you can break it if needed in emergency. Only 1% Penalty on interest rate you will anyway get 6% approx returns on it if you break before maturity.
 
where do you keep your emergency funds also do you have a separate bank account for that?
emergency fund is for emergency. one should not optimise for returns, optimise for availability.
I keep it in Paytm FD, where it is easily accessible and transferable.
Should keep some in CASH and rest in easily accesible no lockin FD.
 
You don't need a separate account as such. Either get yourself a liquid fund or you can open a long-term FD and leave it there.
 
For emergency fund, I think following points are important:-
1. Liquidity- This fund should be highly liquid, as the name suggests it is meant for emergencies
2. Quantum- Ideally 3-6 months of pay
3. Returns on the emergency fund
4. Taxation- This is last point to consider, as there would be less avenues for any optimisation.
 
This may sounds cliche but had park emergency funding in Gold Coins/Bars. I can sell it whenever I want. Unfortunately, I had to use it during Corona times, but I was able to get cash in minutes with no questions asked. There is no liquidity crisis because the market is extremely liquid. Rate is unimportant 1k up/down it should suffice the Job
 
I keep some cash and the rest in airtel payment banks - gives 6 percent on the amount above 1 lakh (max allowed is 2 lakhs). Downside - cant use airtel mini-kyc tricks.
 
I keep some cash and the rest in airtel payment banks - gives 6 percent on the amount above 1 lakh (max allowed is 2 lakhs). Downside - cant use airtel mini-kyc tricks.
How much do u keep in it?
Anytime 2L?

The more u keep, more u earn
The less u keep, less u earn.

It gives 3%p.a. if someone keep 1.17L,
And interest rate increases with amount
 
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This may sounds cliche but had park emergency funding in Gold Coins/Bars. I can sell it whenever I want. Unfortunately, I had to use it during Corona times, but I was able to get cash in minutes with no questions asked. There is no liquidity crisis because the market is extremely liquid. Rate is unimportant 1k up/down it should suffice the Job
My suggestion is to stay away from volatility when it comes to your emergency fund. Plus, you lose a lot of money in charges when you buy and sell physical gold, right?
 
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