Emergency fund: how much you need and where to keep it

An emergency fund is a cash reserve covering 3-6 months of your essential expenses that you touch only if you lose income, fall ill or face an unexpected bill. Keep it where the money is protected and available within a day or two: a separate savings account with interest, a deposit that allows early withdrawal, partly in foreign currency. The longer-term part can go into government bonds.

Oleksandr Suhak October 22, 2026 6 min read

Why you need an emergency fund

Most money problems start with unplanned events, not big mistakes: a layoff, an illness, a broken car, a move. Without a reserve for such moments you end up taking a loan, borrowing from friends or selling investments at the worst possible time.

An emergency fund breaks that chain. It gives you time to find a new job calmly instead of grabbing the first offer, and it keeps small crises from eating into your long-term savings. That is why financial advisers suggest building the fund first and investing second.

How much you need: 3-6 months of expenses

The standard advice is 3 to 6 months of essential expenses. Expenses, not income, and only the ones you cannot skip: housing, food, utilities, transport, phone, medicine and loan payments.

Where you land in that range depends on how stable your income is and how many people rely on it.

Emergency fund size guide
Your situation	Reserve
Stable job, two incomes in the household, no children	3 months
One income in the household, or children or other dependants	4-6 months
Sole proprietor, freelancer, business owner, seasonal or piece-rate pay	6 months or more
Unstable industry or high risk of losing your job	6-12 months

How to work out your amount

Take your card statements for the last 2-3 months and list only the essential spending. Leave out cafes, entertainment and feel-good shopping: in a crisis month you would cut them anyway.

Don't let the number scare you. Nobody builds the fund in a month. What matters is having a target and moving towards it regularly.

Where to start if there is nothing left to save

First target: one month of expenses. Or even a fixed sum such as UAH 10,000. A small target is reachable in a few months and gives you a sense of control.
An automatic transfer on payday. Even 5-10% of income. Money you do not see on your spending card gets spent far less often. How to find a comfortable share is covered in our article on the 50/30/20 rule.
Irregular income goes into the fund. Bonuses, tax refunds, gifts, selling things you no longer need. A fair compromise is to save half and spend half on yourself.
Emergency fund first, investing second. Without a reserve, any crisis will force you to sell investments, often at a loss.
Used it? Refill it. The fund exists to be used. After a crisis, rebuilding it should be your first priority.

Where to keep your emergency fund

The fund has three requirements, in this order: safety, access, return. The money must be protected, you must be able to get it within a day or two, and only then would you like it to earn a little and hold its value.

A separate savings account with interest

The most convenient option for the main part. The money is available instantly and the bank pays interest on the balance. Make sure it is a separate account, not the same card you pay with every day: that way there is less temptation to spend it.

A deposit with early withdrawal

Rates are usually higher than on a savings account. Read the terms carefully, though: on some deposits, if you close early, interest is recalculated at a minimal rate or not paid at all. For an emergency fund, use only deposits that let you take the money out without losing the principal. The deposit calculator shows the after-tax income for your amount and term.

Part in foreign currency

If a significant share of your expenses is tied to the exchange rate (rent in dollars, imported medicine, plans to move abroad), it makes sense to hold part of the fund in foreign currency. This protects you against a sharp devaluation of the hryvnia. Currency accounts usually pay little or nothing, though, so keeping the whole fund in currency is not ideal either.

Government bonds for the longer part

Ukrainian domestic government bonds (OVDP) are debt securities issued by the Ministry of Finance. You can buy them through banks and brokers, and the yield is often higher than on deposits. They suit the second layer of the fund, not money you may need tomorrow: you can sell bonds before maturity, but the price at that moment may be lower than what you paid. A sensible setup is 1-2 months of expenses in an account and the rest in bonds with different maturities.

Options compared
Option	Access	Return	Which part
Savings account	instant	moderate	core, first 1-2 months
Deposit with early withdrawal	1-2 days	higher	middle part
Foreign currency	instant	low	protection from devaluation
Government bonds	a few days, price risk	often the highest	longer part, 3+ months

Deposit guarantees: what to know

Deposits of individuals in banks that participate in Ukraine's Deposit Guarantee Fund (FGVFO) are protected: if a bank fails, the Fund repays the deposit up to the guaranteed amount. That amount has changed over the years, so check the current limit on the FGVFO website before placing large sums.

Emergency fund or paying off a loan: which comes first

If you have debts, the obvious question is whether to put every spare hryvnia into the loan instead. The answer depends on the rate, but the basic rule is: first a minimal fund of 1 month of expenses, then expensive debts, then the full fund.

The logic is simple. With no reserve at all, the first unexpected expense will push you into a new loan, often an even more expensive one. At the same time, keeping a large fund at 10-14% a year while paying 40% on a credit card is a losing deal: the gap in rates costs more than the peace of mind is worth. Once the expensive debts are closed, the same monthly amounts that went into repayments can go into finishing the fund. How to calculate total interest and how much early repayment saves is explained in our article on annuity and equal principal payments.

Where not to keep an emergency fund

Stocks, crypto, investment funds. Exactly during a crisis their value can drop by 20-50%, shrinking the fund when you need it most.
All of it in cash at home. A small amount for a few days makes sense, but inflation erodes a fund kept at home, and it is easy to lose.
Loans to friends. Nobody guarantees you will get the money back when you need it.
A fixed-term deposit with no withdrawal. The money is there, but you cannot get it out without losses.

In short

The fund is 3-6 months of essential expenses; for sole proprietors and freelancers, 6 or more.
Add up only the necessary spending from your statements and multiply by the number of months.
Start with a one-month target and an automatic transfer on payday.
Keep it in a separate interest-bearing account and a deposit with early withdrawal; part in currency, the longer part in government bonds.
Check the current deposit guarantee limit on fg.gov.ua and spread large sums between banks.

Once the fund is in place, the next step is to put the rest of your savings to work. How to do that is covered in our article on compound interest.

Sources

This article is for information only and is not financial or investment advice. Check current terms with your bank or financial institution before making decisions.