What is an Emergency Fund: Meaning, Significance, Types and Benefits

What Is the Definition of an Emergency Fund?

What is the Importance of Emergency Funds?

How to Build an Emergency Fund?

What are the Types of Emergency Funds?

What are the Benefits of Emergency Funds?

FAQs about Emergency Funds

Where do I store my emergency fund?

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Upon determining how much money you have to store in your emergency corpus, you must keep it in a safe and secure reserve. Ideally, a savings bank account is the way to go, as it allows for high liquidity.

How do I redeem my emergency funds?

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You may redeem your emergency fund whenever you wish to. Many financial institutions swiftly credit up to 90% of your funds to an account of your choice.

What expenses to consider while determining the size of an emergency corpus?

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It would be best if you considered all sorts of living expenses while building your emergency corpus, including:

  • House mortgage or rent
  • Healthcare expenses
  • Food
  • Clothing
  • Travel expenses
  • Utility bills such as electricity and gas
  • OTT subscription fees
  • EMIs
  • Insurance premiums
  • Shopping, etc.

Disclaimer

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  • This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
  • All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
  • Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.

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