Emergency Fund Calculator
Months of essential expenses, never a share of income.
- Monthly essentials
- ₹60,000.00
- Months recommended for your situation
- 6
- Target
- ₹3,60,000.00
The rule is months of EXPENSES, never months of income — a household earning ₹1.5 lakh with ₹1.2 lakh of EMIs needs far more than an income-based rule would suggest. Count only what you could not stop paying: rent or EMIs, utilities, groceries, school fees, insurance premiums, transport and any recurring medical cost. Leave out dining, travel and your SIPs, because pausing those is exactly what an emergency fund lets you do. Six months is the sensible base, more if your income is variable, you are the only earner, you support dependants, your EMIs are heavy or your health cover is thin. Where to keep it matters as much as how much: roughly a month in a sweep-in deposit or savings account for instant access, two months in a liquid or overnight fund, and the rest in a short deposit ladder. Not in equity — growth is not this money's job.
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Independent · No commissions · No fund-house data — how the numbers are computed
How it works
The rule is months of essential expenses, never months of income — and the difference is not academic. A household earning ₹1.5 lakh with ₹1.2 lakh of EMIs needs far more than an income-based rule of thumb would suggest, because almost nothing in its outgo can be paused.
Count only what you could not stop paying: rent or EMIs, utilities, groceries, school fees, insurance premiums, transport and any recurring medical cost. Leave out dining, travel and your SIPs, because pausing exactly those is what an emergency fund is for.
Six months is the sensible base. It should be more if your income is variable, if you are the only earner, if others depend on you, if your EMIs are heavy, or if your health cover is thin — and it can be less for a two-earner household with no dependants.
Target = monthly essential expenses x months required, where months starts at six and adjusts for income stability, dependants, EMI load, health cover and age, clamped between three and twelve.The adjustments are applied first and the floors second, so a self-employed person with no dependants still gets the nine-month floor their income variability calls for rather than having it reduced away.
Frequently asked questions
Three months or six?
Six as the default, and more rather than less if anything about your situation is uncertain. Three is only defensible for a two-earner household with no dependants, secure employment, good health cover and light EMIs. A freelancer or single earner supporting a family should be targeting nine to twelve months, because both the likelihood of needing it and the time to replace the income are higher.
Where should I keep the money?
Split by how fast you would need it. Roughly one month in a savings account or a sweep-in deposit for instant access, two months in a liquid or overnight fund which settles the next working day, and the balance in a short fixed-deposit ladder so something matures every few months. Not in equity, and not in ELSS — growth is not this money's job, and needing it in a drawdown is precisely when equity would fail you.
Should I build the emergency fund before investing?
Before investing in equity, yes. Without it, the first genuine emergency forces you to sell investments at whatever price the market happens to offer, or to borrow expensively — and emergencies have an unhelpful tendency to coincide with bad markets. Build it alongside any employer-matched retirement contribution, which you should not skip, but ahead of discretionary equity investing.
Do my EMIs count as essential expenses?
Yes, and they are usually the largest single item. An EMI cannot be paused because your income stopped, and missing one damages your credit record on top of everything else. That is exactly why a heavily-indebted household needs a larger fund than its income alone would suggest — a point an income-based rule of thumb gets backwards.