The answer depends on your situation - not a one-size-fits-all number. Three inputs, one personalised answer.
Count only monthly expenses on needs - rent, groceries, EMIs, utilities, insurance premiums. Exclude discretionary spending like dining out, subscriptions, and travel.
Step 2
Split your corpus into layers by liquidity. Think of it in days - not in instruments. The most accessible slice goes first, the rest works harder.
Keep the amount needed to cover your 15 days of expenses in your savings account. This is your zero-friction layer - no redemption wait, no penalty.
Keep the total amount needed to meet your expenses of 3 months - 15 days into FDs. Split it across 2-3 FDs so you don't break the whole thing at once.
Keep the remaining corpus - which you're unlikely to need quickly - in liquid funds or arbitrage funds. Arbitrage funds give better post-tax yield as they are taxed like equity instruments, however this only makes sense if you're in the 30% tax bracket.
Step 3
Before touching your emergency fund, run it through three questions.