15 Months To Build An Emergency Fund 3X Your Income

Amid the ongoing pandemic, a survey titled “India’s Money Habits” by Finology, a personal finance platform, reveals that 75% of Indians lack savings for unexpected expenses, raising concerns about potential defaults on equated monthly installments (EMIs) in case of sudden job losses. An emergency fund considered a fundamental savings category, is recommended to be three to six times one’s monthly income to handle unforeseen emergencies like job loss or medical issues.


BankBazaar is a leading fintech platform in India that serves as a co-branded credit card issuer and offers an online platform for obtaining a free credit score. With a user base exceeding 50 million registered users, BankBazaar has played a pivotal role in democratizing finance in India. The platform is backed by prominent global investors, including WSV, Experian, Eight Roads, Sequoia India, Walden International, and Amazon. BankBazaar aims to provide end-users with seamless access to credit, contributing to financial inclusion and accessibility in India’s financial landscape. The study, conducted by Bankbazaar, estimates the time required to establish an emergency fund based on varying incomes. Building a fund three times the current monthly income would take 15 months, six times the income would take 28 months, and nine times the income would take 41 months. Before considering investments, it’s crucial to cover basics such as an emergency fund, term life insurance, and health insurance. Several factors, including age, health conditions, job nature, and dependents, influence these decisions.

For creating an emergency fund, individuals should evaluate monthly mandatory expenses like household costs, children’s education fees, EMIs, and insurance premiums. A portion of these mandatory expenses can be kept in fixed deposits or liquid funds. Ajinkya Kulkarni, Co-Founder and CEO of Wint Wealth recommends parking 12 months of expenses in a bank fixed deposit or a savings account with a sweep-in facility. The sweep-in feature ensures that when funds in a Savings Account are low, the bank transfers the deficit from the Fixed Deposit to the Savings Account without affecting the interest rate. Alternatively, liquid mutual funds, investing in high-quality bonds maturing within 91 days, offer slightly better returns than fixed deposits. They are suitable for parking lump-sum amounts for short durations, such as making a down payment for a flat three months later.