carfau:

Thank you Taylor....would you explain why bond funds are not safe.

Thanks again.....chad.

I am not Taylor, but the reason I would not buy an intermediate or long term bond fund right now is because I think you would be buying them at their peak as I think the interest rates will rise in the not too distant future.  We may get a 0.25% drop in interest rates tomorrow, but I think that is already priced into bonds right now.

Ultra short and short term bond funds aren't as interest rate sensitive, but not as safe as a money market fund.  If this is your emergency money, I would put it all in a money market fund.  I don't think a 1 year CD is a good idea if this is your emergency funds.  You would have to pay an early withdrawal penalty if you take money out of a CD early.  Of course if you never need to use the money, then the CD would be better usually as they usually earn more interest.  But I thought the point of the emergency funds were that they were liquid.