Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Contingency fund is reserved money set aside for unforeseen events beyond routine emergencies, such as major repairs or temporary income loss.
Contingency fund is extra backup money for big surprises — job loss plus medical bill in same year — beyond your basic emergency fund.
Distinct from emergency fund in some planning frameworks: emergency for 3–6 months expenses; contingency for lumpy risks — roof repair, legal expense, parent care. Held in liquid or short-term debt. Self-employed may merge both with 12-month target.
₹2 lakh emergency fund for monthly bills plus ₹3 lakh contingency in liquid fund for potential car replacement or home AC failure without touching long-term SIP.
Often used interchangeably in India. Strict planners separate routine income-gap buffer from larger one-off shock reserve.
Liquid mutual funds, sweep FD, or separate savings account — accessible within 1–2 days without market volatility.
Add 50–100% on top of emergency fund if variable income, old house, or dependents with health risks.