Both are savings, but they serve different purposes. A sinking fund is filled monthly for a known future expense (annual insurance, holiday gifts, car service). The emergency fund is untouched cash for surprises — a job loss, an urgent medical bill.
Keeping them separate makes each work better. The emergency fund stays whole when planned expenses arrive; sinking funds prevent lumpy expenses from constantly draining the emergency cushion.
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Talk to Auri →Frequently asked questions
Should I have multiple sinking funds?
Yes — one per predictable-but-lumpy expense category is typical (car, travel, holidays, insurance, home repairs). Digital sub-accounts at online banks make it easy.