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a friend has 100K sitting in a savings account, earning interest. This cash must be available for use at any time. It currently earns about 4% interest, but is taxed at the 28% bracket, giving a net rate of about 3%.

What would be a better investment, considering the short terms needs? The investment must be relatively safe since the cash needs to remain available. The main issue is to invest in something that would defer or eliminating tax liability on any earnings. Any net rate greater than 3% would be acceptable.

My thought is a mutual fund of some sort. But which if any? Or would another route be better? Any suggestions would be greatly appreciated.
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