Investment For Emergency Funds: Here Are Some Instrument Options

Investment for Emergency Funds (Towfiqu barbhuiya-Unsplash image)

YOGYAKARTA - Emergency funds are funds that are stored to anticipate if suddenly there is an unpredictable emergency situation. Some examples that can be categorized as emergency situations, for example, the existence of Employment Termination (PHK), sick family members, leaking roofs of houses, burning vehicles, to cellphones or laptops for work are damaged. Then, what kind of investment for emergency funds?

From this example of the situation, we can see that if you have emergency funds, the things that must be prepared. So when an emergency occurs, you don't need to hesitate to seek a loan or even owe it. Not only that, you can feel calmer to face critical conditions.

Because emergency funds are essential matters, you must store them in the right instrument. The financial instruments that you select to put emergency funds must be safe, easily accessible, and liquid, aka easy to disburse. This is so that when the emergency atmosphere takes place, you can immediately take the funds that have been prepared.

1. Savings in the Bank

This is the most common instrument and is often used by many people to put emergency funds. Because savings in banks have large liquidity or are easy to disburse at any time.

Especially at midnight, you can always take emergency funds through ATM machines or money transfers. So that your emergency funds are not mixed with daily necessities, you can make separate accounts or bags. So that your emergency funds will not be used to meet other needs.

2. Deposit

Deposito can be an instrument of choice to put some of your emergency funds. This is because deposits are one of the low risk instruments. You can divert the interest to increase the amount of emergency funds. If you are interested in placing emergency funds in deposits, choose short-term deposits for just 1 month.

When sorting deposits, you must also pay close attention to the provisions and conditions of the bank. Make sure you sort out deposits that allow disbursement before the maturity period. Also pay attention to other conditions such as whether or not there are provisions for the penalty fee to be imposed when you disburse funds before they mature.

3. Money Market Fund Mutual

Mutual Money Market Funds or commonly abbreviated as RDPUs can also be an investment instrument option to collect and place some emergency funds. RDPU is known as a mutual fund type which is very low in risk compared to other mutual funds. Why? Because the movement of the RDPU tends to stabilize to increase, because this instrument contains financial products such as deposits and debt securities (bonds) whose time period is less than a year.

Not only that, you can also disburse RDPU at any time. The disbursement process takes very long 3 working days. So you don't need to worry about penalty fees or being taxed. The ability to return RDPU results is also greater when compared to deposit interest rates. So that you can use the profit capacity of the RDPU to increase your emergency fund rations.

Of the 3 instruments, which one will you choose? You can sort out more than 1 instrument to put emergency funds! But remember, you have to place some of your emergency funds in bank savings or in the form of cash so that they can be used immediately when you need them. Only then can you place the rest in deposits or Mutual Money Market Funds.

For example, if you have a total emergency fund of Rp. 18 million, up to Rp. 9 million, you can save it in a bank savings account and the remaining Rp. 9 million you can save at the Money Market Fund Reksa. So if at any time there is an emergency incident that takes place, you can disburse funds in bank savings first. Only then, if it is still necessary, you can disburse the emergency funds placed in the Money Market Mutual Fund.

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