A single day doesn’t go by without having to organize all of your needs in place. From the moment you wake up, you start stretching your arms and reach out for a glass of water, your glasses or your gadgets to tell you the time. But imagine if you don’t find any of them! You can sense a little anxiety rise up in your system as you rampantly wave your hand around the nightstand and upon finding it, you catch a deep breath, as a sigh of relief.
With the way we live our lives today, we just can’t get through the day without setting aside some necessities to boost our confidence in who we are and how we like to do things. Now imagine if something awful and expensive were to turn up at your door, unannounced. For instance, you might require some money to help you sort out a road accident in the middle of the day. Car repairs and any other collateral damage incurred during the event can be immediately resolved, provided you have an Emergency Fund to bail you out of such a situation.
That’s why Goalwise recommends investing in an Emergency Fund as a sheer necessity. Think of it as a ‘Get out of debt’ card you have in your wallet before you land yourself in a financial ditch.
The money parked in your Emergency Fund can be redeemed at any time and for any reason. As a rule of thumb, at Goalwise we advise our investors to save up to 4-6 months of their living expense. This includes groceries, internet and phone bills, water and electricity bills, house rent and travel.
The easiest way to go about this is to make an SIP every month towards your Emergency Fund. Having an Emergency Fund has many advantages such as
- You get an interest of 6-8% as per current rates
- You can instantly withdraw up to *₹ 50,000 at once, even on bank holidays
- You typically get better returns than savings account and similar to Fixed Deposits
- You don’t have to dip into your investments made for long-term goals like retirement, children’s education etc
“I couldn’t believe how quick and easy the transaction was. I actually logged in at 7.30 am to withdraw from my Emergency Funds and it came through in 15 minutes. Very delighted with the service.”
- Anand T R, Goalwiser since 2016
Emergency Fund vs Savings Account
An Emergency Fund is not like your savings account. Unlike your savings account, you won’t be inclined to spend as much in the spur of the moment. Emergency Funds will also give you a higher rate of interest, compared to your savings account.
Emergency Funds can be a lifesaver for a lot of people, who would otherwise regret withdrawing their investments from their long-term goals or worse still, taking bad loans. You can use these funds to cover medical and other emergencies for you or your family members, or even tend to your living expenses and EMIs when you’re in between jobs.
It’s always better to be safe than sorry with your hard-earned money.