The main point of an emergency fund is liquidity and risk mitigation, so the first three options make sense, as does something like a no-penalty CD.
I think the missing context here is where you are financially— How much money is $8-30k for you relative to your other liquid (and accessible) assets? If you’ve got a huge taxable brokerage account, for instance, some people just forgo the concept of an emergency fund altogether.
Presumably the 8-30k would otherwise be invested in your taxable brokerage, seems to come down to a question of risk tolerance. At that balance It’s very unlikely you’d find yourself in a situation where you couldn’t pull those totals out of the brokerage even in a severe market downturn. It’s true in that situation you’d be selling down, but keeping it cash forgoes market returns in the mean time.
Personally I’m pretty risk averse and like to keep a cash buffer in HYSA/CDs/I bonds despite having a significant taxable brokerage balance. This was true even before the interest rate situation became more favorable.
None of the approaches you’ve listed seem outright wrong for your situation. I’d concentrate on what your risk tolerances are and back out your approach from there.
The main point of an emergency fund is liquidity and risk mitigation, so the first three options make sense, as does something like a no-penalty CD.
I think the missing context here is where you are financially— How much money is $8-30k for you relative to your other liquid (and accessible) assets? If you’ve got a huge taxable brokerage account, for instance, some people just forgo the concept of an emergency fund altogether.
We have about 100k in a taxable brokerage account, 99% VTSAX, plus more in retirement accounts that we don’t want to touch.
Presumably the 8-30k would otherwise be invested in your taxable brokerage, seems to come down to a question of risk tolerance. At that balance It’s very unlikely you’d find yourself in a situation where you couldn’t pull those totals out of the brokerage even in a severe market downturn. It’s true in that situation you’d be selling down, but keeping it cash forgoes market returns in the mean time.
Personally I’m pretty risk averse and like to keep a cash buffer in HYSA/CDs/I bonds despite having a significant taxable brokerage balance. This was true even before the interest rate situation became more favorable.
None of the approaches you’ve listed seem outright wrong for your situation. I’d concentrate on what your risk tolerances are and back out your approach from there.