Close Navigation
Learn more about IBKR accounts

Emergency Fund

Trading Term

An emergency fund in personal finance is a dedicated reserve of money set aside to cover unexpected expenses or financial emergencies, such as job loss, medical bills, urgent home or car repairs, or unforeseen travel. Its primary purpose is to provide financial security and liquidity without the need to rely on high-interest debt (like credit cards) or disrupt long-term investments.

An emergency fund is a cornerstone of financial planning, acting as a buffer between short-term financial shocks and long-term financial goals. It helps prevent reliance on loans or retirement account withdrawals during crises, thus preserving credit health and investment growth. By reducing stress and enhancing resilience, a well-maintained emergency fund plays a critical role in maintaining financial stability and peace of mind.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.