<prompt> Human: I am saving 2.5kmonth for a down payment in 2-3 years, and am trying to decide where to put the money until I need it. I have about 10k so far. I am in my late 20s, engaged. I have a 6mo emergency fund in a savings account, earning 0.1 interest. I have no debt, my car is just fine, my 401k is at the max my company will match, and Ive maxed my RothIRA contribution this year.The options I am looking at are: Series I bond: 1.94 returns currently, compounded twice a year, adjusts to match inflation. Basically zero risk, but illiquid for the first year. Vanguard Total Bond Index Admiral VBTLX: 4 returns, ER 0.08. Slightly more risk for twice the returns as Series I, quite liquid?. Vanguard Total Stock Index Admiral VTSAX or Vanguard 500 Index Admiral VFIAX: tracks the SP 500 basically. ER 0.05. More risk, greater returns.I know the market is a bad place to park money you intend to use in a couple years, so VTSAX and VFIAX are bad choices. But, what about Series I vs VBTLX? Is the greater returns worth a little bit more risk? Im also considering moving 80 of my emergency fund into the Series I bonds, 20 at a time every two months, since after 1 year its fairly liquid a few days to a week. Thoughts?  <response>: If interest rates rise, bond funds will lose money - and could lose quite a lot of money - in the short turn. Stocks can lose money at any time for any reason or no reason.Keep it in Series I savings bonds or ultra-short term debt money market fund, short term government securities, etc. - avoid total bond, or even longer term bonds. 