It's good to hear that your expenses are low and you have no debt. Try to keep it that way as much as possible. That being said, I still don't like the idea of having cash locked up in a CD. To me, it sort of defeats the purpose of having cash if you have to pay a penalty to use it, whether you're using it to rebalance or cover an emergency. Like some of the others have said, I'd look at treasuries, or perhaps I-bonds if you want a little more yield. They are more accessible. As you grow your portfolio, I would encourage you to look at your e-fund as part of the cash allocation; to me, that's one of the best features of the PP.l2jperry wrote:I will still have savings outside of the PP for emergency funds, also I am 22, no expenses other than car/health insurance, and no debt. So even though you're not making much off of cash anyway, i'd like to put it in something for 1-2 years that will give me the best return, I don't mind a little extra risk. So with that being said, what do you think?For cash, I prefer to keep it accessible so that it can be used for emergencies, so I would avoid the CD. I would keep it in a savings account, or in a TMM or short-term bond fund, or a regular money market, any of which would have check writing privileges. Personally I use VFIRX in taxable with check-writing privileges.
Best of luck; it's good that you're thinking about this kind of stuff now. Keep in mind that at some point you may get married and want to buy a house, etc., all of which will require cash, so don't be afraid of being cash-heavy at this point in life.
