ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -An emergency fund, also known as contingency fund, is a personal budget set aside as a financial safety net for future mishaps or unexpected expenses.

Detailed explanation-3: -Some common examples include car repairs, home repairs, medical bills, or a loss of income. In general, emergency savings can be used for large or small unplanned bills or payments that are not part of your routine monthly expenses and spending.

Detailed explanation-4: -A Certificate of Deposit (also known as a CD, COD, or Time Account) is a financial product that usually pays a fixed interest rate for a set period of time, ranging from a few months to several years.