Building a strong emergency fund is one of the smartest ways to use your capital. We’ve all faced unforeseen financial woes, and an emergency never gives a heads up before coming. For instance, the Covid-19 pandemic has disrupted how we work, travel, and socialise. In August, liquid mutual funds registered an inflow of Rs 50,095 crore, the highest influx of funds into any category of mutual funds. Due to its low risk and quick redemption of investment, a liquid mutual fund is an excellent choice for an emergency fund. Usually, it takes two to three days to get the redemption proceeds from a liquid scheme when you cash out your investment, but in the case of a liquid fund, you can get the funds in your bank account in as low as one day or maximum two days in some cases.