Emergency funds

Anyone has any suggestions on where to park ones emergency funds with the money being extremely liquid and also getting the optimal returns. Say for example I want to park my living expense for one year in full in something maybe in the event of a job loss. And if so that happens I would want the amount to be withdrawn,a certain amount every month till I find a new job.

Now what i want to know is that eventhought the amount is for contingency needs, I want the money to earn the best possible returns at the same time not stuck under any agreement and can be moved with a time frame of say 3 days.

I was thinking of B2B online accounts that some banks offer. I currently have one where in the money gets placed automatically in FD(if its in the account for a few days) thereby earning interest. However there is no penalty for withdrawing the money.

the other day i got an email from a mutual fund company about liquid funds where in money can be put on Friday and withdrawn on monday if need be. I assume this is money market account.

Anyone have any inputs ?

Since you say this is an emergency fund, there are few restriction on where you can invest…

  1. You can invest in stocks/MF because they are volatile

  2. You cant invest in FD’s because they have a lockin period, breaking it half way tru is not tax efficient

Your 2 options are -

  1. Leaving it in your SB account - but this does not really grow at a good rate

Which leaves you with investing in Liquidbees…

With liquid bees you can withdraw your funds anytime you wish. Liquidbees offers a better rate than bank interest but lower than an FD.

I use Fixed Deposits too.
They do have a locking period, but withdrawal anytime in between, has no penalty. Only the period of retention will be calculated for interest return and money refunded to bank account immdiately or next working day.