Is putting your rainy day fund in something like VGLT a terrible idea? Trying to consider options outside of HYSA, with a bit more juice.

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It’s it’s really an emergency fund you need to be certain it will be there. You don’t care about yield but security.

Long term treasuries have virtually no default risk, but you’re going to see some swings in interest rates and the value of the ETF. The TLT which is a similar fund is down about 10% over the last few months. It went up ~45% from late 2018 to early 2020.

Can you live with that much movement in your emergency fund? If not, an ETF with shorter duration treasuries might be better.

Or just stick to a HYSA.

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For me, if it’s ‘must have’ money I’d just do the HYSA. The opportunity cost versus a bond fund is too small to justify the risk of loss.

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That's a great place to put it.

I would argue the long term treasuries would typically perform inversely to the general market. So if your emergency is an economic downturn, then you would see the value increase when you need it.

That is a terrible idea . The fund carries a duration of 18 years!

Well I don't have a crystal ball so interest rates could go up or down or stay the same for the next year. I'm just pointing out the risk of going into LT duration with "safe money". I keep things simple with cash (hysa)

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