Manchanda says that liquid mutual funds, ultra short-duration funds, or short-term fixed deposits may generate low returns, but these are liquid, and you can use them whenever you need. But, she adds, "One should have at least six months of expenses set aside as an emergency fund. However, one should increase this fund to 8-12 months of expenses if the person is the only earning member, has more than three dependants, or if one's job role is very niche and it might be difficult to find another job immediately."