Without an emergency fund, the first job loss forces you to break SIPs at exactly the wrong time.
The 3-bucket structure
| Bucket | Allocation | Instrument |
|---|---|---|
| Instant | 1 month | Savings / sweep FD |
| Quick | 2 months | Liquid fund |
| Reserve | 3 months | Short-duration fund |
An emergency fund earns the right to stay invested in everything else.
Mutual fund investments are subject to market risks. This article is for education, not personalised advice.