BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Transferring money into your savings before you pay your bills
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Original amount of money saved or invested
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Cash set aside to cover the cost of unexpected events
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Maximizing your return by selling stocks at a higher price than what you paid for
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Detailed explanation-1: -What is an emergency fund? An emergency fund is a cash reserve that’s specifically set aside for unplanned expenses or financial emergencies. Some common examples include car repairs, home repairs, medical bills, or a loss of income.
Detailed explanation-2: -An emergency fund is a separate savings or bank account used to cover or offset the expense of an unforeseen situation. It shouldn’t be considered a nest egg or calculated as part of a long-term savings plan for college tuition, a new car, or a vacation.
Detailed explanation-3: -The term, ‘emergency fund’ in itself, is indicative of its purpose, referring to the funds that you keep aside for emergencies and contingencies. You stash away a little portion of your income to accumulate earnings to help in times of financial distress.
Detailed explanation-4: -Liquid assets like money market accounts, high-yield savings accounts, and CDs are among the ways you can invest your emergency fund money so that it can grow and remain accessible.
Detailed explanation-5: -People in stable jobs are recommended to put away 3-6 months’ salary into their emergency fund, whereas people with lower job security are recommended to save 6-12 months’ salary. A stable income ensures a consistent and bigger emergency fund.