Emergency Fund
What is Emergency Fund?
Cash set aside for unexpected, necessary expenses such as job loss or urgent repairs.
Understanding Emergency Fund
An emergency fund keeps a surprise bill from turning into high-interest debt or a forced sale of investments at a bad time.
A common target is three to six months of essential expenses, kept in a safe, easy-to-access account such as a high-yield savings account.
In 2026
The Federal Reserve's survey of household finances found that 63% of U.S. adults would cover a $400 emergency expense with cash or its equivalent, unchanged for three years. The other 37% would need to borrow, sell something, or could not pay at all. That is the gap an emergency fund closes.