It's my understanding that high yield savings accounts are still the best place for an emergency fund. A tbill might net you more money, but if you're still 8 months from maturity, how does that help you at all?
I guess technically there is always a risk of 100% loss but in the case of the HYSA that would happen if the United States dissolves. With a money market all you need is a bank run.
Definitely not a place to stick money you absolutely need to be able to pull out soon.
If you are incredibly conservative, you could keep enough cash for 30-90 days in an FDIC deposit account, with the rest in money market funds that will take time to resolve solvency issues.
https://www.sec.gov/news/statement/crenshaw-statement-adopti...
https://institutional.fidelity.com/app/proxy/content?literat...
https://fundresearch.fidelity.com/mutual-funds/summary/31617...
ETA: in 2008 there was an instance where one fund "broke the buck", but the Fed stepped in and backstopped it.
It's rare to find a revolving credit line that you can actually know will be there when an emergency comes -- canceled cards, reduced limits, suddenly prohibited cash advances, exploitative rate changes, etc are all things that do happen during tighter economic times and just haven't been widespread in the last decade or so because money was cheap. Be careful not to be conditioned strictly on those freewheeling days that are now ending!
You can live the way you describe, and many of us have gone through periods of needing to rationalize it and do so, but with a clear head it's not something I would characterize as "the best blace for an emergency fund" because you just can't really trust it.
I thought it was only federal tax, not no federal tax?
Most people posting here have enough unused credit card "headroom" to get them through a month; so the main thing for an emergency fund is that you can get the cash out of it with low or no cost within that month.
Some use bond funds to do it, some use bond or CD "ladders" - buy a bond expiring in 12 months that is 1/12 your emergency fund each month, and in a year you'll have a rolling "self built fund" that you can get 1/12 of every month with no penalties.
Bogleheads forum has tons of discussion around these kinds of things.
I've never understood this mentality. I've got a credit card with nearly 6 months of expenses as a limit, most of it not used because I pay it off month to month.
I'd be more worried about the tax implications of selling ETFs and such than the 2-3 days of wait to transfer.
Maybe I lack imagination, but I can't think of anything that I'd need my entire emergency fund immediately. Throw the emergency cost onto a credit card, and transfer the money from the emergency fund to pay off the bill. I guess that doesn't work in some other countries where credit cards aren't as prolific as the US.
This depends on the bank. If you have a checking account with the same bank, the funds can be available right away. The standard withdrawal frequency limits still apply.
I'm not sure I've ever had a nontrivial expense in the US that simultaneously couldn't be paid on credit and wasn't known for weeks in advance either. I would expect any no-credit charge in excess of about a dinner bill to be announced at least a week in advance, implicitly through an invoicing process at the very least, and I would frankly have reservations about whether any vendor who didn't have a way to handle this was really a legitimate business.
Even if that's not an option, your broker is probably fine with floating you a sum of cash matching your recent MMF sale amount as overdraft or margin at a price of somewhere between "we've already factored it into our fees as a cost of doing business" and <0.05%/day of the loan amount anyway, because overnight loan alchemy is a well-understood problem and the bread and butter of retail banking.