Since I noticed Roth IRA topics popping up here I figured I'd use this moment to raise an issue I am considering.
To date, I have taken the approach of keeping my emergency fund (typically in the 25k range + buffer in the main checking account) in a savings account accruing slightly below 1% annually. It barely grows, but it's piece of mind being there compared to not having any pillow at all, or having my pillow tied up in hard-to-get or penalty-based assets.
However, I keep remembering every month I see the paltry interest payment that my checking account barely grows. Since Roth IRA's can grow at higher rates, and I can withdraw principle penalty and tax free, I am strongly considering a strategy where, by moving over at max limits each year, my savings account is closer to 5-10k and then use Roth contributions as part of the 6-12 month emergency fund calculation. This way, if things go as I would like and I never have to really touch it, it becomes another valued retirement vehicle.
So, would anyone like to poke holes in this approach? :)