Frankly I do this as well. I think it depends on your personal financial situation and how often you expect to be withdrawing from your emergency fund. By incre

Frankly I do this as well. I think it depends on your personal financial situation and how often you expect to be withdrawing from your emergency fund. By increasing levels of "emergency", do you use your emergency fund to pay for: * Gas because you forget to plan properly for road trips? Keep your funds in cash. * Your vehicle's regular oil change which happens every couple years and you should be able to plan for? Maybe a HYSA * Your transmission goes out and you need a new car? Diversified ETFs probably fine Many "emergencies" can in fact be saved for, which leaves only the truly rare and uncommon ones, which usually don't require that you have all of the emergency fund available as cash at a moment's notice. Also because they inherently only happen on a time scale of YEARS, then in the long run you're just self-insuring yourself and it's a bummer if the transmission goes out in a down year and you have to exit a position, but statistically speaking you'll come out ahead.