Where to invest or park our Emergency Fund? Between Debt Mutual Funds Vs Bank FDs, which is best suitable for parking the emergency fund?
The biggest question for many of us is to at first identify our emergency fund. Once it is identified, then the confusion is where to PARK (NOT INVEST) the emergency fund. Before proceeding further to understand the pros and cons of both products, let us first understand the purpose.
Purpose Of Emergency Fund
You must know the purpose of the emergency fund clearly. This to be frank reduces your confusion about choosing the products. When it comes to emergency funds, two things matter to us a lot and they are as below.
# Emergency Funds should be easily accessible as early as possible without any hassle or waiting period. Hence, liquidity is the biggest criterion before you choose a product. In fact, the emergency fund should be accessible for you 24*7 without even any holidays.
# It should be at the highest safety place. Few actually look for a return…