In Nidhi Talks Episode 11, Nidhi Sinha, Editor at Outlook Money, emphasises the necessity of not just having an emergency fund, but also where to keep it. Some people store their emergency savings in stocks, equity mutual funds, or long-term products like PPF. Stocks may lose value if the market crashes, but PPF has extensive lock-in periods and slow withdrawal processes that make quick access difficult.
She recommends that emergency funds should be held in a safe and conveniently accessible location. These include liquid debt mutual funds, which can provide cash in a day or two, as well as bank savings accounts with rapid access via ATM or UPI. As savings accounts pay low interest rates by adding fixed-term deposits (FTDs) to the mix can help you earn higher returns while maintaining liquidity and safety.
By distributing emergency resources among liquid debt funds, savings accounts and FTDs, you may ensure quick access to funds when needed without risking your income.