In a high interest savings account. But I would think one should think more in terms of "where do I get the most interest on my money in the shortest amount of time?".
I used to think that "safe" was the way to go with investment funds, but I have come to realize that "safe" is just another way of thinking that money is real. Which it really is not. Money is a made up concept and money can be more than the cash in the bank. Know-how is my currency and the more I get to know, the more I will earn. So the money I have already is money I will invest in as high yielding assets as possible.
after making a few bucks because of our "know how" that needs to be preserved one has to think about saftey.
so regarding cash: monies over 250k need to be spread out over different institutions.... big money is going into Treasuries because it's difficult to spread their funds over many accounts.
high interest savings accounts (like Emigrant.com, etc) are FDIC insured and are obviously the easiest and most liquid way to go for accounts under 250k BUT in event of banks insolvency, recovering money from FDIC can take up 3 or 6 months if memory serves correctly.
but for cash - ironclad for SAFETY: USTs has my vote
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