What’s the difference between putting my savings into a high yield savings account vs into a bond ETF? Which is better? Thanks!

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A bond ETF is actively traded and less liquid than a HYSA.

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How’s it been like with mortgage backed security funds?

A bond ETF has more risk because the fair value of the underlying bonds will change as interest rates move. For short term treasuries under a year or two, the rates are effectively pinned by the Fed and even if they weren’t fair price of the bond is less sensitive to interest rates. Longer dated Treasuries - 20-to-30 years - have much more exposure to interest rates and their fair values will move more significantly. And of course corporate bonds will give you more interest but carry higher default risk.

Using a short duration Treasury ETF to augment a HYSA could be fine. If you’d been in one this year you might have gained ~3% YTD as interest rates fell.

Of course down the road when the Fed potentially raises rates then you could see a loss. But that’s at least 3 years away.

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True, I don't think interest rates will rise much over the next year or so either. I just think the risk / return with short duration treasury funds is so bad your probably better off trying to find a high yield savings account with a credit union or something (Vanguard short term treasuries etf for ex yields 0.11% vs our money market here is 0.06%)

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Appreciate the insight everyone!

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