Blog Post --- Published on November 08, 2023 | Last Updated on February 02, 2024

Sinking Fund vs. Emergency Fund: What's the Difference and Where to Save?

menabung emergency fund dan sinking fund di deposito bank jago dan ekosistem digital jago di kantong reksa dana bibit Sinking Fund vs. Emergency Fund: What's the Difference and Where to Save?

You are certainly familiar with the term emergency fund. However, some of you may not have emergency savings yet. Talking about savings, it turns out that it's not just the emergency fund that's important, so that money isn’t being spent irresponsibly. There is also something called a sinking fund. Many people think a sinking fund and an emergency fund are the same thing. In fact, they are totally different. 

Differences Between Sinking Fund and Emergency Fund

What Does a Sinking Fund Mean?

A sinking fund is basically about a strategy specifically aimed at achieving a financial goal. Building a sinking fund can start with setting up a goal, whether it is renovating your house, traveling with your family, saving for retirement or buying school needs for your child.

It doesn't mean you can only save for one goal. If there are several financial goals you want to achieve in the future, you can prepare several sinking funds. However, it is best to separate savings for sinking funds per goal. The reason? So that the funds don't get mixed up and it's easy for you to monitor how much funds have been saved up for each goal.

What is an Emergency Fund?

The meaning of an emergency fund is exactly as the name suggests. An emergency fund is an amount of money that is saved so that it can be used later when you experience an unexpected event, an emergency or a crisis.

For someone who has lost their job, for example, it will be very helpful to be able to finance their daily living needs if they have emergency savings. There are many other examples of unexpected events that can come at any time, such as accidents and house fires.

It is important to remember that something that falls into the emergency or unexpected category is something that you cannot predict in advance. However, you still want to be prepared and can deal with it without panicking when the emergency takes place.

Which is More Important, Sinking Fund or Emergency Fund?

Because the function of an emergency fund is as a safety net that helps you in times of crisis, the priority falls on building your emergency funds first. Many financial planners recommend that everyone have an emergency fund of at least three times their salary. The bigger your emergency savings, the better and safer it is for you.

When you have saved enough for an emergency fund, then you can start allocating a budget regularly to set up a sinking fund.

Setting up an Emergency Fund in Jago Term Deposit

Considering the importance of an emergency fund, which must be able to be used whenever needed, choosing the right place to save is an essential factor.

The Jago Term Deposit is the right choice for those of you who want to store emergency funds in a safe place. Without paying any penalty fees at all, you can withdraw your Jago Deposit whenever necessary, even if the maturity date is not yet reached.

cairkan dana darurat di deposito bank jago langsung dari aplikasi kapan saja tanpa penalti

Suddenly need money to go to the hospital? Directly withdraw your Term Deposit via the application. The money in the deposit will go directly to the Main Pocket. Whatever emergency event you experience, you can remain calm in facing it because you know that the emergency fund in the Term Deposit can be disbursed at any time.

Apart from free withdrawal fees before maturity, other advantages of saving in the Term Deposit are competitive interest rates, various extension options and flexible periods.

Setting up a Sinking Fund in Bibit

What about sinking funds? Of course, you can also setting up a sinking fund in the Jago Deposit. Another option is to take advantage of the Jago digital ecosystem with mutual fund investment application Bibit.

By linking your Jago account and Bibit account, you can more easily set up your sinking funds in the form of mutual funds. Top up at any time in any amount for free. Mutual fund investments in Bibit can be done directly from the Jago application, so you don't need to switch applications. Likewise, when you want to monitor the growth of your savings in Bibit, you can also do so from the Jago application.

menabung rutin sinking fund dengan investasi reksa dana di bibit pakai fitur jago autodebit

What's even better is that you can set up your sinking funds regularly using the Jago Autodebit feature available on Bibit. You can be more certain that your financial goals will be achieved according to the targets you have set.

Ready to set up both emergency funds and sinking funds in Jago and its digital ecosystem?

You might also like..

Managing Monthly Salary is Now Easier With a New Feature: Auto-Budgeting

May 16, 2024

Managing Monthly Salary is Now Easier With a New Feature: Auto-Budgeting

Want to save more and still be able to spend as you want? Set your Jago Pocket budget every time you receive your monthly salary automatically with Auto-Budgeting. Let's find out! Read more

Unexpected Big Expenses When Having a Second Child

May 13, 2024

Unexpected Big Expenses When Having a Second Child

Having two children can be more exciting. But don't forget to prepare a budget for various large expenses that arise when having a second child. Read more

Anti-Drama and Hassle-Free Family Vacation with Shared Pocket

May 06, 2024

Anti-Drama and Hassle-Free Family Vacation with Shared Pocket

Holidays are a fun time with family. For easier and more practical spending without any drama, put the money in one account using the Jago Shared Pocket. Read more

Semua jadi Jago

Mulai hidup seutuhnya dengan keluarga dan kerabat.

Download aplikasi Jago, lalu pilih Jago atau Jago Syariah dan daftar akunnya lewat ponsel kamu

download on app store download on google play

Scan Kode QR di bawah ini dengan kamera ponselmu untuk menginstall Jago.