Yes, if you can't lose any principle it should be in the highest interest FDIC insured account you can find. I saw a 2% CD in my first search, but there may be better rates out there.
If my plans were flexible (I wanted to buy a house, but didn't care if it took a few more years) I would put in something like a total market index to get better returns. Even if it has to ride through a correction, that should beat 2% over 5+ years.