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Is mutual fund the right place to park in my money for emergencies?

After you figure out how big a kitty you need, you need to choose an appropriate investment option for the fund. Remember, returns are not important here. What is more critical is that the money should be easily accessible at short notice. 

You can withdraw it 24x7. Ensure you have a debit card with adequate cash withdrawal limit. Many people remain unaware of their debit card’s daily cash withdrawal limit (usually Rs 40,000) till the time they attempt to withdraw huge amounts during an emergency. The money will earn a decent return and can be withdrawn at any time. 

Revisit your kitty: 
A contingency kitty once formed is not the end of the process of providing for a rainy day. You need to revisit the fund and replenish it regularly to adjust for inflation, lifestyle changes, increase in family members and changes in debt commitments. The kitty should be reviewed at least once a year. 


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