What is an Emergency Fund? | How to build it? | Personal Finance for Beginners Ep - 1

Welcome to the first episode of our Personal Finance Series! In this video, we delve into the very first building block of personal finance i.e. emergency funds. Discover what constitutes an emergency fund, its paramount importance in personal financial stability, and why everyone needs one. Karthik Rangappa guides you through a step-by-step process on how to build a robust emergency fund, ensuring you're prepared for life's unexpected curve-balls. Additionally, he sheds light on common mistakes to avoid and highlight key points to remember, setting you on the path to financial resilience. Join us on this journey toward securing your financial future - because being financially prepared is the first step to true financial freedom!
Time Stamps
00:00 Introduction
01:16 Why do we need an Emergency Fund?
03:15 How to build an Emergency Fund?
03:20 Step 1 - Identify the amount you need for emergency fund
04:10 Step 2 - How to accumulate this amount?
04:33 Step 3 - Where to save the emergency corpus?
06:00 Points to remember
7:22 Conclusion
Links to Refer
Learn more about Arbitrage Fund here:
zerodha.com/varsity/chapter/a...
Learn more about investing and finance here:
zerodha.com/varsity/modules/
Other Important Links
You can put your stock market knowledge to the test by taking the Varsity Certification test here: zerodha.com/varsity/certified/
Open Zerodha Account - zerodha.com/open-account?c=ZM...
Social Media
Twitter - / zerodhavarsity
Instagram - zerodhavars...
#analysis #investing #finance #stockmarket #financialeducation #varsity #zerodha #personalfinance #emergencyfunds #emergency #funds #financialplanning
Featured Playlist
Beginners Guide to Personal Finance
• Mutual Funds Investing...

[@lucfer2002]

Good initiative Karthik Rangappa! Just like the modules of Varsity.
Big fan 🙌😊

[@sanjib_paul]

A gentle reminder to the video editor or the motion designer. You forgot to turn on Continuously Rasterize at 2:33 the footage looks blurry. Great visuals

[@itsjustdinesh]

This is what iam looking for.. Thank you zerodha, thank you karthik rangappa sir

[@mohitnegi724]

Just made my 3.5L emergency fund 😃

[@sathvik3441]

Congratulations 🎉

[@ArunKumarMurali]

Good for you brother.. congrats🎉

[@binoyroy7860]

Insightful video on EF.
Preferred options are:
1. Savings Account
2. FD
3. Liquid Fund
All of them in various different proportions.

[@lakshmitejas1685]

Arbitrage fund?

[@SurajJhaIn]

Thank you, I don’t have any emergency funds yet but I have decided to build it for at lest 6 month of expenses. Later I will make it 9 months

[@khaleelrm]

Thanks Guru :) waiting for more in this series

[@adarshtiwari9650]

Just started to learn...Will build such which is more than sufficient for all family members as per furthur lifestyle.

[@yashmore9863]

the credit card tip is great. I'd like to add - there are liquid funds which credit a certain amount (usually up to 50k) within 30 minutes

[@jadoun106]

Keep doing ! Great work ! ❤️

[@typicalindian1238]

straight forward. Will definitely share with loved ones

[@Seasonednuts-iv5gd]

A very insightful video on financial security

[@vanadasanathkumar4732]

Good and knowledgeable video sir, thanks a lot and want more videos like this

[@srinivasbabu8776]

it's nice information for me Thank you sir🎉

[@50karanbebale81]

Thank you sir ❤

[@shubhamkochar18]

Liquid fund has instant withdrawal facility while arbitrage fund doesn't have

[@dsivapradeep]

That’s where credit card comes in…

[@ayushbajaj1965]

Liquid fund takes T+1 days for withdrawal. Can you tell which liquid fund gives instant redemption

[@lakshmitejas1685]

​@@ayushbajaj1965icici, axis and many. They give in 30min upto 50k or 80% of the fund. Which ever is lower.

[@rnhotta18129]

PPFAS LIQUID FUND ​@@ayushbajaj1965

[@HY4mShubham]

@@ayushbajaj1965nippon india liquid fund

[@gauravkalal6678]

For emergency fund liquid fund is my preferred choice it gives me pice of mind.🎉 Credit card combination is good (T+1)😮😊

[@romilpatel8803]

Can you make a guide on how to calculate upside potential of a stock with all time high price

[@PrinceSingh-qk5vk]

Please make a complete video on ROCE (return on capital employed)

[@JackSimplesPersonalFinance]

thanks for this really important tip

[@varsheethtv2459]

Zerodha is on a mission...!! Kudos!👍👍

[@All_the_Wheels]

short and to the point...

[@trijay]

Good one... Please make video on liquid funds for emergency funds

[@sathviksathish4243]

Best advice

[@PrashanthGiridharan]

Money market funds, liquid funds, savings bank accounts, credit cards.

[@wandasworldhaircarejourney5788]

Great Content

[@vijaykumar225]

good information

[@geramer]

In process of converting a FD ladder emergency fund to liquid fund. Last year had an emergency and were force to premature FD withdrawl resulting in fine. BTW, we do keep some amount in savings just to get going while in process of liquidating FD/liquid MF.

[@codedusting]

There are FD where no fine is there in interest accumulated or principle amount. IndMoney has Federal Bank FD.

[@gags81]

Blocked 6 months of expenses in FD. As FD renews, putting the interest earned also in the FD to create larger emergency corpus, although bit by bit 😂.

[@vanivindhyasyamala4333]

Is it good to keep them as active money of kotak. ?

[@SurendraKumar-mq1tf]

Sir please do a video about SGB, i have a query since SGB is tax free after selling 8 years, and i can see in kite it just trading like stocks, so i can buy and sell this so what is the use of 8 years lock in

[@bprakashkrha]

Incase of medical treatment won't we use our health insurance instead of EF?

[@namitajain68]

6 months' living expenses in cash in bank split between 2 accounts + 4 FDs of 1 lakh each

[@amritdas4670]

Please educate us more

[@BojoHanks]

How about NPS Tier 2 account as a preferred option?

[@brijmeena8081]

❤

[@supreetkamatagi1831]

Concept is very good to understand but action and voice some what not matching and it is unable to attract or pay attentions to watchers, camera view of recording would be improved
Simple feedback to attract more users
Thanks

[@Nandha.R]

Karthik Sir, you are looking like my favourite Hollywood hero "Will Smith" in this thumbnail.

[@rishiadhikary1610]

Money market fund + credit card is my choice

[@SanJanJayadevan]

Credit Card + Arbitrage ❤

[@lykumar88]

High interest yielding savings account

[@ramesh_p]

Although I will say, better to put your money in a FD. In a scenario where you may need to send emergency money to someone on immediate basis FD will be an easier option than liquid fund.

[@dsivapradeep]

Problem with FD is preclosure penalty which bank charges on your interest and taxed at our income slab.

[@immoski]

MOD @@dsivapradeep

[@nandakumaras]

Very good initiative 👏

[@dhilbas]

I am having it as a gold bars

[@agilanvimalan771]

hi why not physical gold is our destination to park our half of our emergency fund.

[@nirvana171178]

First and foremost, we need to understand what is emergency funds constitutes - what all expenses should include in that corpus, define it with one example would have made this effort worth, most don’t understand the concept.

[@PranavYadav-cv7bv]

If you know, Plz explain us in Comment Section by giving an example, that will be much more beneficial for everyone.

[@simplytrading9986]

Icici corporate bond fund is the best place to park emergency fund. Approx 8% return p.a.

[@Unapologeticmyrmidon]

How can I achieve that.

[@simplytrading9986]

@@Unapologeticmyrmidon mutual fund name

[@immoski]

MOD/Sweepin FD > FD

[@saitejparuchuru]

I’m parking my emergency funds in FD, Paytm FD gives 7%-7.5% and instant withdrawal without any charge

[@TheLearner048]

Then why it's called FD? Probably it's a saving account with high interest rate and high risk or maybe sweep facility, if it's sweep then read T&C very wisely.

[@saitejparuchuru]

@@TheLearner048 It was fd only, paytm partnered with other banks to provide that service

[@arunkumarkgr]

please be safe with paytm bank fd , now rbi has restrictions on paytm service from march'24

[@pramodh1619]

If we select the FD to park the emergency fund, there will be fine/penalty if we break the FD right sir.?

[@chiragreddy5871]

yes

[@Iamreal11xingping]

Sweep in out/ Fd Linked to saving .

[@Sayan_Biswas.]

1 % penalty in interest rates. Do auto sweep feature in your savings account, you will get same returns as fd and you can also withdraw money anything just remember to keep the minimum balance acc. to your bank.

[@uttiosaha4692]

If you take the interest monthly, then they take a penalty from the main amount in case of premature withdrawal.
Otherwise, they deduct it from the interest amount it self.
Sweep is a good option. Just take a note of QAB of minimum balance. This is different for various bank for sweep account
Eg- PNB has a minimum QAB of 25000.
SBI 10000
Many bank managers do not tell this to you.

[@YourFinSor]

Is fixed return product by P2P lending platform is good option for investment as emergency fund?

[@manikantamagaji]

P2P lending is generally riskier than FDs. Although it's tempting, I wouldn't recommend putting emergency fund into P2P lending as the chances of defaulting is high and also it'll take 2-3 days for withdrawing the fund. Whereas you can withdraw your FD on the same day.

[@YourFinSor]

@@manikantamagaji Many P2P platforms had a good diversified loan book and yes it takes 2 days for withdrawal but we have credit card for those 2 days as in video also mentioned.

[@rinkalrana9901]

No, first of all its an emergency fund plus a fixed deposit in scheduled commercial banks are insured by DICGC. Corporate FD are riskier and it's not insured

[@vinayak6685]

I have built my emergency corpus and all is in FD

[@Arunkumar-mh1vp]

Sir, but as i know FD has 5 years lock in period right? Then how it works to withdraw during emergency?

[@prathameshrode6852]

I have accumulated in Debt Funds

[@rinkalrana9901]

I parked my emergency fund in fixed deposits

[@a.r4k3sh]

Old School FD

[@parteekgoyal5782]

Linked FD.

[@corporatebhai1703]

why not just keep them in savings account.

[@lucfer2002]

You get higher Interest rate in an FD as against a savings account

[@vinaykumark]

​@@lucfer2002if we break the FD when the emergency situation, bank will fine us right?
What would be solution for this

[@RameshRam-pw8bx]

because you will spend it easily

[@rinkalrana9901]

Better to use sweep in facility in savings account

[@pruthvibatta1181]

Use overnight funds or liquid funds

[@shubhamjain54519]

Can you please dub this in Hindi

[@mohitofficial2024]

First 😂

[@kundakkamandakkamsk8568]

Personal finance emergency fund concept in tamil - czcams.com/video/2Ugx3KV6eoQ/video.htmlsi=DQ_f6nlCspdwzefT

[@pravin_nandgaonkar]

Fixed deposit

[@user-cd5nt5qp5y]

❤