Glide Invest FAQ: What is an Emergency Fund? How much is sufficient?

What is an Emergency Fund? How much is sufficient?

Life is full of unpleasant surprises, like a job loss, a medical emergency, or a natural calamity affecting you directly.  These are the events that you cannot anticipate, and for which you might need a backup at any time. A sudden loss of income or large unforeseen expense can have a devastating impact on anyone. 

Emergency Fund
is a sum of money safeguarded in case of a financial emergency such as illness or job loss. Most financial experts recommend that individuals or families have access to between three and six months of expenses kept in a cash-equivalent account.

An Emergency Fund is a source of funds for life's unplanned events. It should be easily accessible. It should be easily converted into cash, no matter what form it is stored in. And it should earn good returns while it is being saved. A good emergency fund acts like a safety net. It reduces the impact of such events in your day to day life drastically. 

At Glide Invest, we recommend our investors to start their investing journey by first building an emergency fund.  You can setup an Emergency Fund through our Goals section. This goal comes with two benefits: it not only earns better returns than a savings account, but also can be converted back to cash (What is Insta Redemption?) into your bank account within 30 minutes. 

How much is sufficient?  How much do you need? 
It is recommended that you should have between 3 and 6 months of your household expenses to cover all your basic needs during unforeseen emergencies. However, this would completely depend on your lifestyle and your monthly requirements. Experts even suggest 8 - 12 months of expenses.
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