A Roth is liquid. You can access your contributions without penalty at any point. About the only thing more liquid is cash under your mattress. I'm not sure how/why you move from liquidity to riskiness, but I agree you wouldn't want to waste Roth space with a 1% return. That's why you'd invest in index funds, even if this was your emergency fund. Still liquid, but with a significant return potential. Now you'll want to have enough contributed so that you can still have the proper amount available in the event of a market crash, but that's a small issue that's automatically resolved over time.
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By liquid I mean low risk and liquid. I think that this might be a risk tolerance disagreement. I don't think your emergency fund should be invested - some emergencies, such as a job loss, often coincide with market corrections, which won't resolve over time if you take out the money to feed the dog or whatever.