Replace Your Savings Account with This Low Risk Weekly Income ETF

I see ETF investors obsessing over backtests and optimization every day. Constantly fiddling with sector tilts, trying to recreate hedge fund-style factor exposure, or min-maxing their portfolio’s Sharpe ratio to the second decimal place.

But then they go and park their emergency fund in a Chase savings account paying 1% or less. That’s just leaving money on the table. There’s no shortage of ultra-low-risk ETFs paying close to the Fed funds rate, which is still around 4.25% to 4.5% even if we get a 25-basis-point cut at the September 16–17 meeting.

And while these ETFs aren’t FDIC-insured like your savings account, many of them are as safe as it gets. Especially those holding 0–3 month U.S. Treasury bills, which are backed by the full faith and credit of the U.S. government and immunized from interest rate risk that plagues longer-term bonds.

And if you hold them in a taxable brokerage account, that interest is exempt from state income taxes because it comes from Treasurys, only federal tax applies. There are a few tickers you could go with, but one I particularly like is the Roundhill Weekly T-Bill ETF (WEEK). Here’s why.

Why WEEK?

WEEK is an actively managed ETF that invests in a portfolio of U.S. Treasury bills with maturities between 0 and 3 months.

That’s the safest corner of the bond market, with next to no credit risk and essentially zero duration. You're not going to lose money if rates rise, and you’re not locking your cash up for long either.

Because it’s wrapped in an ETF, it trades like a stock. No need to mess with TreasuryDirect or time your ladder manually. WEEK handles all of that for you.

The net asset value (NAV) is designed to stay stable. It’s not pegged to $1 like a money market fund, but you won’t see the kind of price swings you’d get with longer-term bond funds, or obviously with stocks.

The price chart just shows a slow creep upward as it accrues yield, followed by a small drop when the fund goes ex-distribution. That sawtooth pattern is exactly what you want to see.

It charges a reasonable 0.19% expense ratio and isn’t in danger of shutting down either, it’s already grown to over $133 million in assets under management.

WEEK Yield and Schedule

WEEK currently pays a 30-day SEC yield of 4.04%, which makes sense. You take the lower end of the Fed funds range (4.25%), subtract the 0.19% fee, and you’re left with what you earn before taxes.

But unlike most Treasury ETFs that pay out monthly, WEEK pays weekly, just like its name suggests. Distributions are declared on Mondays, go ex on Tuesdays, and hit your account on Wednesdays.

So, if you’ve got a decent chunk of cash to park but you want to get paid more frequently than once a month, WEEK is ideal for keeping it safe while earning a decent yield.