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Liquid funds for indefinite period- advisable?

Hi all,

   Having build my Equity mutual fund portfolio, I wish to invest in a liquid fund, which would serve 2 purposes:

1. As emergency fund (around 6 times monthly expenditure).

2. A pool for rebalacing with Equity funds (every 1-2 years).

My question is: Is it advisable to invest in liquid funds for indefinite period, as I dont know when I may require emergency funds. I know that other debt funds can give bit higher returns (albeit with higher risk), but I would like only one fund fron debt mf category.

Please advice.

Thanks,

Kuntal.

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