How much is enough?
Most planners suggest 3 to 6 months of essential spending, and more if your income is irregular or others depend on you. Count only what you must pay: rent, food, utilities, EMIs, insurance and school fees, not holidays or shopping.
Questions people ask
Where should I keep an emergency fund?
Somewhere safe and quick to access: a savings account, a sweep-in FD or a liquid mutual fund. Avoid shares or anything that can fall in value just when you need it.
What counts as an emergency?
Losing your job, a medical bill insurance doesn’t cover, urgent home or car repairs. Planned expenses like holidays or gadgets should have their own savings.
Do I need one if I have health insurance?
Yes. Insurance covers hospital bills, but not lost income, deductibles or non-medical emergencies.
Method and sources
Target = (monthly essential expenses + EMIs + insurance premiums ÷ 12) × months: 6 for a stable salaried job, 4 for a household with two incomes, 12 for self-employed or variable income, plus 2 months for two or more dependants. How we calculate.
Last reviewed 22 Oct 2026 by the WealthFeedz team.