How much month's expenses to keep in savings account?
I don’t keep more than 3 months of expenses in my savings account at any given time. The excess month is always invested in direct equity or mutual funds or some fixed income products. So, it is important to have enough balance in your savings account, but higher the excess amount in the savings account, higher the lost opportunity to generate better returns on the excess amount. By investing excess funds, you can maximize your returns and maintain an emergency corpus. As the interest rate of the savings account is much lesser than the inflation rate, the higher amount in the savings account would only reduce the value of more money due to the reduction in the purchasing power of the excess amount too. A reasonable proportion is 3-6 months of expenses, which ensure liquidity without sacrificing too much potential for higher returns. Keep only what you need in your savings account, the rest should be invested.

















