How much is enough?
There is no universal number. Someone with stable dual income and low fixed expenses may need less than a single-income household with a mortgage, children or variable work. I would start with a small buffer, then build toward several months of essential expenses if your situation calls for it.
Where I would keep it
A separate high-interest savings account is often the simplest choice. It keeps the money liquid while creating a little friction between emergency savings and everyday spending. Compare interest, deposit insurance eligibility, transfer times and any account restrictions.
Why I would not invest the whole emergency fund
Stocks can fall at exactly the time you lose a job or need cash. The emergency fund is not supposed to maximize long-term return; it protects the rest of your financial plan from being sold or borrowed against at a bad time.
A two-layer approach can work
You might keep a smaller amount immediately available for urgent bills and the rest in a separate savings account. The exact setup matters less than knowing how quickly you can access the money without penalties or market risk.