Strategy
An emergency fund is a liquidity reserve for unexpected expenses, typically 3-6 months of salary held in an easily accessible account.
An emergency fund is the liquidity reserve that cushions unexpected expenses without touching money set aside for the long term. Typical examples are an unplanned repair, a back-payment or a temporary loss of income.
As a rule of thumb, 3-6 months of salary is often cited. The right amount depends on personal circumstances, such as how stable the income is and how high the fixed monthly costs are.
What matters most is quick access. The fund usually sits in an easily accessible account, for instance an instant-access savings account, rather than in volatile or long-term investments. That way the reserve stays within reach even when markets are unfavourable.
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