Three to six months of net income, within reach in an instant-access savings account: the emergency fund is the first money decision everyone should make. Here is how to size it and build it in twelve months.
In short
- Rule of thumb: three months of net income for employees, six for the self-employed and single-income families.
- The fund lives in an instant-access savings account, not in the portfolio and not in the current account.
- Build it with a standing order the day after payday, not with whatever is left at the end of the month.
- Touch it only for real emergencies: job, health, car, washing machine, never holidays.
Why the emergency fund comes before any investment
Whoever invests without a reserve sells at the worst moment. The washing machine breaks, the car needs a clutch, the job is suddenly gone, and exactly then the stock market sits ten percent lower. The emergency fund makes sure an emergency stays a nuisance and does not become a financial crisis. It is not an investment but an insurance policy you write for yourself, without paying a premium.
How much is enough?
The rule of thumb is three to six months of net income. Three suffice for employees with a secure job, two incomes in the household and no property. Six are appropriate for the self-employed, single earners, families with children and homeowners, because a boiler does not wait in winter. Calculate with your actual fixed costs, not your salary: rent, energy, insurance, food, mobility, loans. With €2,400 in fixed costs you need €7,200 for three months and €14,400 for six.
Where the fund lives
In an instant-access savings account (Tagesgeld) at a bank with statutory deposit protection of up to €100,000. It is available daily, pays between two and three percent in 2026 depending on the provider, and does not fluctuate. The current account is unsuitable because the money looks available there and gets spent. The investment portfolio is unsuitable because prices can fall when you need the money. A fixed-term deposit is unsuitable because it is locked.
Building it in twelve months
Divide your target by twelve and set up a standing order that runs the day after your salary arrives. For €7,200 that is €600 a month, for €14,400 it is €1,200. If that is too much, take 24 months. The pace matters less than the fact that the amount flows automatically before you see it. One-off inflows such as a tax refund, bonus or Christmas money accelerate the build-up without you noticing anything in daily life.
When you touch it
An emergency is unexpected, necessary and urgent. Losing your job, illness, a broken car you need for work, a repair in the house. Not emergencies: holidays, a new phone, a sale or a wedding invitation. For those you set up separate pots. Once you have used the fund, you refill it first before you invest again.
What comes after the emergency fund
Once the reserve is full, the standing order moves to the next pot: repay expensive loans, then an ETF savings plan, then retirement provision. The emergency fund stays where it is and only grows with your fixed costs. Review it once a year, for example at the turn of the year.
Try it yourself
Budget PlannerEnter net income and fixed costs: the 50-30-20 split, your savings potential and when your savings goal is reached.Savings Interest CalculatorBalance, rate, term and tax: what your instant-access savings bring after German withholding tax and the tax-free allowance.Frequently asked questions
Does an overdraft count as an emergency fund?
No. An overdraft costs over ten percent interest in 2026 on average and can be cancelled by the bank. It is the opposite of a reserve.
Should I repay debt first or build the fund?
First a small fund of around €1,000, then repay debt above five percent interest, then fill the fund to three to six months.
Does the fund need a separate account?
Yes, otherwise it mixes with everyday spending. A savings account is opened in ten minutes and costs nothing.
Share
