I don't see any reasons not to put everything into diversified ETFs. Low risk, reliably comparatively high returns unless the world economy or the entire US economy crash (which would ruin the value of almost every asset anyways).
SGOV is a reasonable option, it's basically just doing a 1-3 month Treasury ladder for a charge of 0.2%, and slightly less frustrating liquidity.
(So right now you'd get like 5.2% with SGOV, vs 5.4% with treasuries)
* Gas because you forget to plan properly for road trips? Keep your funds in cash.
* Your vehicle's regular oil change which happens every couple years and you should be able to plan for? Maybe a HYSA
* Your transmission goes out and you need a new car? Diversified ETFs probably fine
Many "emergencies" can in fact be saved for, which leaves only the truly rare and uncommon ones, which usually don't require that you have all of the emergency fund available as cash at a moment's notice. Also because they inherently only happen on a time scale of YEARS, then in the long run you're just self-insuring yourself and it's a bummer if the transmission goes out in a down year and you have to exit a position, but statistically speaking you'll come out ahead.
T-bills are literally the safest possible investment bar none.
Wouldn't I bonds be safest? They protect against inflation.
If you bought (or even buy) I-bonds at the right time, it can be a spectacularly good deal.
Inflationary risk is the risk that inflation will undermine an investment's returns through a decline in purchasing power. Downside risk is the risk of loss in value of an investment due to a decline in the price of the security.
Decline in value of an investment because of a decline in the price of the security is not the same as decline in value of the investment because of inflation. Even if the practical consequence is the same.
Inflationary risk matters, and it should not be ignored. But it doesn’t factor into whether an investment is considered “safe,” as that term is typically used in this context.
"But it doesn’t factor into whether an investment is considered “safe,” as that term is typically used in this context."
If you ignore real terms and don't care about actual value (the entire goal of investing), sure. I guess is cash is "safe" too if your ok with losing double digit percentages of your valve over the past 3 years.