How to invest emergency funds

After deciding amount your emergency fund you create your fund and now where you invest such a amount .

Depends upon your family background, budget and various factors you can invest fund in different way .

Basic rule is that it should not be invest in fixed asset and risky asset so you should not invest whole amount in shares and security or buying a property from emergency fund.

Our recommendation is you should invest emergency funds in 3 or 4 different financial product so you can have decent return from your investment and having financial security

For example you have emergency fund worth Rs 500000

Now you want to invest such fund so you should have 40% of fund in your savings bank accounts so Rs 200000 should be kept in savings bank accounts

Remaining 40% amount should be invested in short term breakable and highly liquid fixed deposit so Rs 200000

Remaining 16% you can invest in highly liquid mutual funds and top category shares and security so u can get good return as well as maintaining emergency fund. Rs 80000

Balance 4 % should be available quickly so it should in cash form .Rs 20000

So emergency fund of Rs 500000

  • Rs 200000 in saving bank accounts
  • Rs 80000 in shares and security
  • Rs 200000 in liquid fixed deposits
  • Rs 20000 in cash .

You can change investment preferences but it should be i liquid form and most of fund should be available so risk free .