Personally, I'd pick a balanced fund that is equal to your risk tolerance for this money. Remember you can always open a new brokerage at Vanguard if you want easier/cheaper access to their funds.
With the amount of money my wife and I put into tax-advantaged accounts, whatever money we put into a taxable account does not need to be saved for retirement. So I decided to do a 60% stock and 40% bond portfolio at Betterment for our "savings" account. I'd like to let this grow for a while and eventually tap it as we want for vacations or larger purchases. This account is small right now, so when Schwab launches their new free robo-advisor, I'll probably end up moving the money there.
If I had to choose a fund, it would be Vanguard's Wellesley Income Fund. It's not ideal for a taxable account since it's actively managed, but it lost less in 2008 than comparable Lifestrategy funds and outperformed them after by quite a bit.
Here's some quick comparisons...
In 2008:
Wellesley Income Fund (1/3 stock) lost 9.84%
Lifestrategy Income Fund (20% stock) lost 10.53%
Lifestrategy Conservative Growth Fund (40% stock) lost 19.52%
The returns:
I know historic returns are supposed to mean nothing, but the fund has averaged 10.09% since 1970! It's hard to beat that with such a conservative fund.
I may decide to switch our savings account to a fund. But at this time I like that with Betterment (and I assume Schwab when it launches), I can withdraw money to pay for a vacation and immediately start putting money back in as I have it. With a mutual fund, if I sell or transfer funds, I cannot purchase new shares of the fund for 60 days (except my mail). Honestly, that may not be so bad as the money could sit in cash or go into another fund during that time. I think I just want to wait and see what Schwab's new service is about before I make a final decision on where this money will go.