General
Emergency Fund
Also known as: Contingency Fund, Safety Net
A reserve of easily accessible money set aside for unexpected expenses or financial emergencies.
Detailed Explanation
Emergency fund is a financial safety net for unforeseen circumstances like job loss, medical emergencies, or major repairs. It should cover 6-12 months of essential expenses and be kept in highly liquid investments like savings account, liquid funds, or short-term FDs. This prevents the need to break long-term investments or take expensive loans during emergencies.