New Delhi, May 14 -- A reserve money pool or an emergency fund is not an investment - it is a financial buffer. Its objective is to shield your current pay and future assets from disruption during unforeseen events: a job loss, a medical stay, a sudden family duty, or an urgent fix. It is money you can access within one to two working days, without selling a stock, cashing a mutual fund unit or prematurely exiting a fixed deposit.

This contrast matters immensely. Many people mistake a reserve pool for a short-term investment or misinterpret a credit card limit for a buffer. Neither fulfils the role. A credit card creates liability in a crisis. A short-term investment can be at a loss precisely when you need to cash it. A reserve pool is ...