Short term goal
Emergency fund.
Six months of costs, reachable the same day, and deliberately dull. It is insurance, not an investment — and it is the first goal we fund.
Who this is for
If one bad month would force you to sell investments or borrow.
A job change, a hospital deposit, an urgent repair or a family emergency rarely gives notice. Without a buffer the choice is a credit card, a personal loan, or redeeming long-term investments at whatever the market happens to be that week.
The buffer is sized from your monthly expenses, including EMIs and premiums, and kept where it is safe and quick to reach. Health and term insurance sit alongside it; they cover what no reasonable fund could.
“The emergency fund is the reason every other plan survives a bad year.”
Where the money sits
Three layers, by how fast you need it.
An example for a household spending ₹50,000 a month: a six-month fund of ₹3 lakh.
Monthly saving for a ₹3 lakh emergency fund
Build it early, before you need it
- Over 24 months₹11,700/mo
- Over 12 months₹24,100/mo
- Over 6 months₹49,100/mo
4.2×more each month if you build it in 6 months instead of 24
| Layer | Amount | Where | How fast you can get it | Tax on the gains |
|---|---|---|---|---|
| Immediate | ₹50,000 (one month) | Savings account | Instantly | Interest at slab rate |
| Next day | ₹1,50,000 (three months) | Liquid fund | Next working day; up to ₹50,000 instantly in funds that offer instant redemption | Slab rate |
| Within days | ₹1,00,000 (two months) | Money-market or arbitrage fund | Usually one to two working days | Slab rate for money-market; equity taxation for arbitrage |
Illustrative allocation, not a recommendation of any specific scheme. Instant redemption is limited to the lower of ₹50,000 or 90% of the investment, per scheme, per day. Redemption timings are typical and depend on the fund house and cut-off times. Liquid, money-market and arbitrage funds carry low but real risk, and their returns are not assured.
How we work
Four steps, then a review every year.
- 1
Add up a real month
Rent or EMI, groceries, school fees, premiums, utilities and transport. Six months of that is the target — more if income is irregular or there is a single earner.
- 2
Build it first, and quickly
At an assumed 6.5% a year, ₹3 lakh takes about ₹24,100 a month over one year, or ₹11,700 over two. Returns are not assured.
- 3
Split it by speed
One month in the bank, three in a liquid fund, the rest a step further out, as in the table above.
- 4
Refill after use
Using the fund is the point. We pause SIP step-ups elsewhere until it is topped back up.
Questions we get
Before you start.
Is six months right for everyone?
Can a credit card or a loan be my emergency fund?
Why not a fixed deposit?
Do I still need health insurance?
Other goals
Planning for more than one thing?
Retirement
Your longest goal. Most people start ten years late.
Plan this goal Long termChild’s education
A fixed date you cannot move.
Plan this goal Long termChild’s marriage
A long horizon with a flexible date.
Plan this goal Medium termDream home
Usually three to seven years away.
Plan this goal Medium termTax saving
ELSS chosen on merit, not on the March deadline.
Plan this goal Short termYearly expenses
Fees, premiums and festivals that come every year.
Plan this goal Short termDream vacation
A short horizon, so keep it safe.
Plan this goal Medium termSelf development
Courses or a career change, planned on purpose.
Plan this goalPlan your emergency fund with us.
A free 30-minute call. We look at what you already have and work out what the goal really needs.
We never hold your money. Payments go straight to the fund house.
Mutual fund investments are subject to market risks. Read all scheme related documents carefully. Projections are illustrations at an assumed rate, not guaranteed returns.