No matter what your current income is, there is always a way to build an

emergency fund

All it takes is 3 easy steps

1. Set a Benchmark

Decide an amount you want to save and set a timeline against this (e.g. Rs. 40,000 in 8 months, which means Rs. 5000 each month) Re-look at this amount once you reach your initial target and consider important factors like inflation, medical costs, lifestyle, etc.

2. Select a Suitable Account

Accessibility to your emergency fund is essential. Here are several options that provide easy access to your savings.

Savings account: Operating the account is simple, and you can access the money 24/7 with a debit card. However, know your daily cash withdrawal limit.

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Fixed Deposit: FDs offer better interest as compared to savings account and can be liquidated on short notice.

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Autosweep Savings account: It can transfer excess funds into a fixed deposit. You can even get better returns than savings accounts.

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Liquid Funds: Includes a minimum lock-in period of 3 days. It is easily accessible with ATM cards offered by fund houses.

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Short-term debt funds: Have a short maturity period (less than 3 years). Money is invested in debt instruments (certificate of deposit, government securities, etc.)

3. Automate your Savings

Treat your savings like a bill. Set up an automatic savings plan where your money is transferred right to your deposit/investment account.

Disclaimer:  

This infographic is intended for general information purposes only and should not be construed as investment or insurance or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.