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Emergency Fund Placement: Savings, Liquid MF, Short FD—What Mix Works

Optimal placement strategies for emergency funds across savings accounts, liquid funds, and short-term FDs.

Published March 26, 20258 min read

Emergency Fund Placement: Savings, Liquid MF, Short FD—What Mix Works

Your emergency fund is insurance, not an investment. Prioritise access and stability.

A Simple Mix

  • 1 month of expenses in savings for instant access.
  • 2 to 4 months in liquid or ultra short debt funds with low credit risk.
  • Optional short FDs if you prefer deposit comfort.

Hygiene

  • Keep the fund in a separate bank from your day‑to‑day spending.
  • Name the folio or account clearly and do not use it unless it is an emergency.

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