What term means money set aside for unanticipated expenses or loss of income?

• A. Direct Deposit
• B. Emergency Fund
• C. FDIC Insurance
• D. Mobile Deposit

Answer: (B)

Having money set aside for unanticipated expenses or loss of income is called an emergency fund. The idea is to have readily accessible cash to cover unexpected costs—like car repairs, medical bills, or a job loss—without needing to borrow or dip into long-term investments. Keeping it in a liquid account, such as a savings account or money market fund, makes it easy to access quickly whenever surprises arise. A common goal is to accumulate enough to cover three to six months of living expenses, providing a financial cushion during tough times. The other options don’t fit this purpose: Direct Deposit is simply money automatically deposited into your account from wages or benefits; FDIC Insurance protects your deposits in case of a bank failure, not money set aside for emergencies; Mobile Deposit is a way to add funds to your account by depositing a check using a smartphone camera.