Other cash equivalents

Other cash equivalents can include Certificates of Deposit (CDs) or U.S. Treasuries. These can be considered cash equivalents because they're risk-free (that is, you won't lose any money).

Pro: You can generate a higher return than a high-yield savings account.

Con: You have to lock in your cash for the duration of the CD or Treasury.

You'd have to personally weigh whether the "lock-in" (e.g., illiquidity) is worth the higher yield.

However, it can pay off: if you can forecast a cut in the interest rate, you can open a CD right before. In fact, when the Fed decided to cut rates to near-zero in March 2020 in response to COVID19, I put a portion of my emergency fund into a CD offered by Marcus at 2.5% for 1.5 years. Rates continued to stay near-zero until early-2022, so this decision paid off.

The next set of rate cuts are forecasted to start in June 2024, so if you choose to go the CD / Treasury route, it would likely be best to do so sometime in late spring or early summer.