Emergency Fund

An emergency fund is money kept as a financial safety net for unexpected expenses or urgent situations. It should stay liquid, meaning easy to access through places like an ATM, fixed deposits, or investments with little or no penalty for early withdrawal. Ideally, it should cover at least six months of family living expenses.

It is like keeping a backup money jar for hard times. If you lose your job or face a big surprise bill, this money helps your family keep going.