In many of your posts you mention creating emergency fund on priority. With respect to that kindly advice me the best possible way wherein i can invest my money in order to create liquid fund. Is savings acct the only way? Whether i should consider interest on that product or only liquidity? Also is it wise to consider opening of cooperative bank account option as they provide more interest?
Ajinkya-When we say emergency fund, then our priority must be liquidity than earning from this cash. Hence, Ideally I suggest to keep 1/3 in your savings account, 1/3 in eFDs and another 1/3 in Liquid Funds. However, I personally love to put it in eFDs, because of the highest liquidity than liquid mutual funds. I split the eFD equal to my monthly expenses. So that in case of emergency no need to liquidate whole FD but the actual need.
Savings accounts are a classic example of emergency funds. Emergency funds help access your savings in case of eventualities. You can set up an emergency fund in ICICI Prudential’s saving accounts and eFDs which offer the highest liquidity. Split the savings – some in your savings account and some in eFDs to access them easily when the situation demands. http://www.icicipruamc.com