Three buckets stacked by how fast you need the money . match each tier to a vehicle that yields what the speed allows
An emergency fund is not one vehicle. It is a ladder of liquidity. One month of expenses you may need by tonight. Three months you may need by next week. The middle two months sit in between. Each window earns a different yield because the speed of access has a different price.
TIER 01
Same day
One month of expenses. The cash you can pay rent or hospital deposit with before the sun sets.
Savings account
Standard scheduled bank. Same-day debit and UPI. No exit cost, no settlement window.
TIER 02
Overnight
Two months of expenses. The money you need by the next working day. One break from the FD.
Sweep FD or flexi deposit
Auto sweep over savings threshold. Breaks into the linked account on debit. No premature penalty in most schemes.
TIER 03
T plus one
Three months of expenses. The money you need next week. Redemption hits the bank account by the next working day.
Liquid fund
SEBI liquid scheme category. Day-one to day-six graded exit load. After day seven no load. T plus one settlement.
BLENDED
Whole fund
Same six months of expenses, structured by access speed.
Three-bucket stack
Weighted yield on Rs 6 lakh blends the three tiers above. Tax slab still applies to interest.
Same Rs 6 lakh fund . one year illustrative interest . 5 pct inflation reference
18000
All in savings at 3.0 pct . Rs nominal
33500
Three bucket stack . Rs nominal
15500
Gap on the same corpus . Rs per year
180000
Forgone over 10Y compounded . Rs illustrative
Six months of expenses. Three windows of access. Three different yields. The bucket is the same size. The structure is what earns the salary you forgot you owed yourself. Card three has the rules for sizing and running it.