Where to keep emergency fund?

It’s based on relationship with bank in case of private bank. HDFC guys tell me that if you write an application addressing branch manager requesting to reverse penalty amount he will get the entry reversed and transfer the penality amount back to my savings account within 2-3 weeks.

Not 100%, in the sense that, it depends on the amount you have invested with the bank, your tenure with the bank, and the possibility of them selling their products to you, cross selling so to speak.

Although I have not listened to any conference call of the listed private banks, I am sure the analysts, investors, all ask questions pertaining to all of these details.

Private enterprises, more so private financial institutions, are here to make money, every which way they can :grin:

Mine is Kotak Pro savings account. 6% interest for 1 year 1 month… and no penalty on redeem
if you withdraw after 7 days, no penalty and no deduction of interest too

Yes, as Kotak is one of the biggest private banks, I guess you can keep your money there. But it is better to have the account in a physically accessible branch, in the place where we live, in case we want to withdraw money quickly.

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Important: Penal Charge on Pre-mature withdrawal of Fixed Deposits (Domestic / NRO / NRE)
Interest will be paid at the rate prevailing on the date of deposit for the tenure the deposit or the withdrawn amount remained with the bank or at the contracted rate, whichever is lower after deducting applicable penal charge for premature withdrawal as per Terms & Conditions of the bank.

The above is as per Kotak website. Banks will rework the rate based on the number of days the deposit remained with them.

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Move your money to SBI if you want FD. Don’t even think about it would be safe during recession or depression or even Corona. Banks really don’t have your deposit and when those people paying EMI stop or default, getting your deposit out of bank will be difficult. Chit funds and cooperative are even worse. Remember PMC bank? . IMO never trust banks during worse times. Overnight funds that use treps, T-bills are safer because even when economy is going down, people defaulting they still pay taxes (i.e those interest payments to govt bonds) .

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FD is the best option out of the given alternatives. But I think a normal savings account would be best since the purpose of having an emergency fund is to use it easily no matter where you are.

Correct, that’s what Savings bank accounts are for.

You could definitely look at opening fixed deposits, your money will be safe until you really need it. There are many banks that have good options, check it out and start your plan.

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It is best to keep your emergency fund in an FD. Whenever you need some urgent cash, you can break the FD and utilise it. It’s what my parents do, so I guess this is legit advice.


Fixed Deposit or FD is the best option. It is traditionally considered a safe haven by many Indians, and you can consider it too.

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I don’t think one should be keeping their emergency fund as arbitrage funds. You still have a risk factor there and emergency funds need to be kept with utmost safety in my opinion. So, I would say FD in a public sector bank is the best option one can go for.

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An FD account is the best option to consider. The bank must be physically accessible, too, in case of emergency or deposit/withdrawal.