Want to be cash-ready for financial emergency? Follow these rules

Single-income families need to keep more cash than double-income families, while entrepreneurs need to maintain even higher cash levels

According to the Reserve Bank of India's annual report, household savings in cash have risen to a peak level of 2.8 per cent. While households must have an optimal level of cash to meet their day-to-day requirements and emergency needs, holding too much cash can be detrimental for their financial health as cash in bank or liquid funds earns a lower level of return than in other instruments like equities.  

Ideally, one should have one month of expenses as cash on hand. This money in the house will help you deal with emergency situations like the recent flood in Kerala,