Moneycontrol
Jan 08, 2016 01:17 PM IST | Source: Moneycontrol.com

What is Contingency Fund?

A contingency fund is money or securities set aside to cover unexpected conditions or losses in business, usually supplementing a contingency reserve.

A contingency fund is money or securities set aside to cover unexpected conditions or losses in business, usually supplementing a contingency reserve. The purpose of the fund is to improve financial security by creating a safety net of funds that can be used to meet emergency expenses as well as reduce the need to use high interest debt, such as credit cards, as a last resort.

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