By flexible, I mean if some value is lost she can stand to wait a little time for it to recover, or is it already earmarked for an expense. Is the amount flexible? As in, if it's a car downpayment, can she manage if that downpayment is $9k instead of $11k?

I generally agree with FFX, but I'll throw another option in the middle out there.

If she has no flexibility on either front, I would probably recommend CDs; I might say ladder them since interest rates might go up, but I'm not sure that's worth the effort for the period of time that'd matter.

If she has a little risk tolerance, but not a ton, she might go into a short-term bond fund (I have an ETF that I use for this purpose that I'd be happy to share but I'll wait til I'm asked to not be a shill!). There's a little risk to principle, but at the moment, I'm getting around 1% versus my saving's account's .1%. That's dropping as the bonds in the fund mature and it acquires new, crappier bonds. At the same time, that fund lost just 2% in principal between Feb and March last year and recovered by June. If you do this, try to find a broker/fund that has Dividend Reinvestment (DRIP) available.

If it's more flexible/more risk tolerant, index fund (or even a split between index fund and another option, though with $10k that's a little iffy) is the way to go. Then which fund you pick is based on that same question.