Where should emergency fund be kept in India?

Emergency fund ka main rule is simple: it should be safe + quickly accessible, not “highest return”. A good setup for most Indians is to keep 1 month of expenses in your main savings account (instant access for medical, job gap, sudden travel), then keep the next 2–5 months in a sweep-in/short FD linked to your account so you earn a bit more but can break it quickly when needed. If you still want slightly better returns without locking money, you can park a portion in liquid or overnight mutual funds, but remember, redemption is not always instant like savings; usually, it takes a business day or so, so keep that as a second line, not first. Also, if your emergency corpus is large, avoid keeping everything in one bank because deposit insurance is capped at ₹5 lakh per depositor per bank (principal + interest). Split across two banks if needed for peace of mind. (Reserve Bank of India) Bas itna dhyaan rakho: emergency fund ko equity, long lock-in products, or “too good to be true” schemes mein mat daalo, warna emergency ke time liquidity issue ho sakta hai.