Emergency Fund Calculator
Use this free emergency fund calculator to work out how much money to keep aside for emergencies, and how much to save each month to get there. Enter your monthly essential expenses, your EMIs and premiums, how many months of cover you want, and how soon you want the fund ready.
How this emergency fund calculator works
The calculator adds your essential expenses and fixed commitments such as EMIs and insurance premiums, and multiplies the total by the number of months of cover you choose. That is your target. It then allows for any amount you have already set aside, growing at the return you enter, and finds the monthly saving that would build the rest within your chosen time. For example, ₹40,000 of monthly commitments with 6 months of cover gives a target of ₹2,40,000. Building it in 12 months at an assumed 5% return needs about ₹19,465 a month. The result is an illustration, not a forecast.
How many months of cover is right?
Many planners suggest three to six months of expenses. A longer cushion, such as nine to twelve months, may suit people with irregular income, a single earner in the family or health concerns. The calculator starts at six months, and you can change it. We can help you decide what suits your situation.
Where to keep an emergency fund
An emergency fund needs to be safe and quick to reach, so the aim is not high returns. Many people keep it in a savings account, a fixed deposit or a liquid fund. Liquid funds are mutual funds and carry some risk, so check that you are comfortable with the choice. The return field in the calculator starts low for this reason.
What this calculator does not include
It does not include expenses that are not monthly, such as annual insurance premiums or school fees, unless you add them to your monthly figure. It also does not include taxes. Treat the result as a starting point and review it when your expenses change.
Frequently asked questions
What counts as an essential expense?
Rent, groceries, utilities, transport, school fees, medical costs and loan EMIs. Leave out things that you could stop in an emergency, such as holidays and eating out.
Should I build the emergency fund before starting a SIP?
Many planners suggest having at least a small cushion first, because without one an emergency may force you to sell investments at a bad time. You can also build both at once. We would be happy to help you plan the split.
Is the return shown guaranteed?
No. Mutual fund returns are market-linked and can be higher or lower than the rate you enter. Mutual fund investments are subject to market risks. Read all scheme related documents carefully. Learn more on the AMFI investor awareness site.
What should I plan after this?
Once your emergency fund is in place, try our Goal SIP calculator for goals such as a home or a child’s education, or our Retirement calculator.