VBIL
Vanguard 0-3 Month Treasury Bill ETF
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When VBIL becomes more popular maybe the premium will come down. But right now VBIL has been selling at a 0.11% premium to its NAV according to [ETF.com](http://ETF.com) while SGOV's premium stayed at 0.02% for the first half of the year and then fell to 0.01%. So the net-net of it is that the 2 basis points saved on annualized expenses is negated by the 9 basis points paid in extra premium. So for me it's SGOV for tbills.
To be blunt, .02 on 100k is $20. I'm not saying not to be money conscious but that kind of money really doesn't count. Smaller newer funds can have more NAV variance, which both causes weird capital gain issues and can theoretically result in you losing money. That said VBILs been pretty stable for some time now so maybe it's fine. It's not simple to measure because VBIL started a month late, but SGOV yield YTD is 3.68% vs 3.09% for VBIL, so don't be sure you're making more money
I was always worried with VBIL volume but it seems to have picked up. Both are safe bets.
It depends on the current yield curve and where you may want to be on that yield curve. The short-term curve is inverted at the present so if you think that ultra-short term rates (the one month is a little over 4%) is going to fall more than the current 1 year of 3.6% plus the interest for 1 year - then an interest rate trader may choose a longer duration. You can also do things like take on a little more credit risk with investment grade bond funds. Or use ultra-short duration active investment grade funds. Or even target maturity funds in a ladder depending on your tax situation and timeframe. Tldr - you can make cash management as complicated as you want - but if you dont' want to time the interest rate markets or the effort to actively manage cash to eek out a few more basis points - than just keep it simple and use any ultra-short duration product. I personally think that too many people over-analyze the differences between funds like VBIL and SGOV.
"Better" is subjective. It will depend on your timeframe and any thesis that you may have on interest rate markets. Also depends on things like your tax situation and if you are willing to take on some credit risk. For example - if you are saving to buy a house in 3 years and you think that shorter term interest rates will go down - then SGOV and VBIL are poor choices. And a better choice would be longer duration treasury funds that are at least 1 year duration.
SGOV expense ratio is 0.09 while VBIL is 0.07 They basically hold the same thing so in theory VBIL should return 0.02% more what probably is not worth worrying about
VBIL has decent volume now so it is just slightly better
A ultra short term treasury fund like VBIL/SGOV
You're over thinking it. A Treasury ETF like VBIL, SGOV, USFR or Treasury Money Market like VUSXX are functionally equivalent. Just pick whatever is most convenient for you.
>I’m curious how others evaluate where to keep their emergency fund or idle cash while still balancing safety and liquidity. Thats the issue with banks, HYSA will mostly follow the short term interest rates , however they can vary . If a bank has excess cash they may yield less , if they need cash they may have a promo to yield slightly more . A great HYSA pretty much matching short term rates can become one that lags behind it . So you can chase yield and open new accounts and move money to the highest paying accounts Or you can simply use a money market fund or a ultra short bond ETF like VBIL/SGOV and you are always guaranteed to pretty much get the short term rate Some banks may offer some promotional rate but honestly chasing yields may net you like .1% more then VBIL/SGOV what is like $50 on a 50k emergency fund.
Savings- 6 months emergency in HYSA, rest in money market, buy some TBILLS or CDs and create a ladder.(if you have state tax TBILLs can be a better optiony, as they are not subject to state taxes. You can also just use SGOV or VBIL ETF for TBILLS or buy CDs through your bank.) Retirement- max out ROTH IRA, contribute to 401k and HSA (you can invest excess $$$ HSA after you've hit your cap.) Visit r/bogleheads for tried and true ETF's Personal Brokerage- create a dividend portfolio. I use QQQI and SPYI ETFS currently. It pays for my monthly spending. I also have a little gold just to hedge and put spare change towards BTC. And if i get excited about a up and company company ill bet on that if I have extra cash to toss around. DRIP- Enable reinvestment for your Retirement and savings positions!!! Set it and forget it. Also use DRIP methodology until you get your dividend portfolio where you would like it to be. LIVE BELOW YOUR MEANS and budget EVERYTHING (including tine) ! - No matter what stay humble and live far below your means. Don't pay above 25 percent of your income for rent, keep your grocery budget reasonable. Instead of eating out shitty every week go to one nice restaurant a month etc.. No one knows what tommorow holds. Dont piss away your hard work buy making your day to day bills eat up your whole paycheck. All it takes is a lost job and now you have lost everything.
Short-term bonds are paying 4% right now, and inflation is 3% so they're making a real-dollar yield on their cash. Not a lot, but they're not seeing it depreciate. They'd make over 4% just dropping it in VBIL. [https://investor.vanguard.com/investment-products/etfs/profile/vbil](https://investor.vanguard.com/investment-products/etfs/profile/vbil)
I have the same concern as you and im not sure the solution. Does any broker let you pick fractional limit prices? Does any broker give better execution than Fidelity? One alternative is VBIL, lower volume but higher price so it helps with the spread
My Savings account is a brokerage where I buy something like VBIL and ultra short term treasury ETF I prefer this because an ETF like VBIL will always basically give you the short term rate. Banks HYSA usually return a bit less and can be somewhat inconsistent, for example a HYSA may start off matching the short term rate but if rates rise lag behind it, or if rates drop , drop more and end up in 6 months paying much less then the short term rate Ultra short term treasuries you will always get the short term rate, you cannot say that with a HYSA . The added benefit is the interest is exempt from state taxes
Its fine its exactly the same as VBIL/SGOV
What about them ? Fidelity offers a money market that probably yields around 4% and I think RH probably pays 4% And guess what VBIL pays around 4%
Just buy VBIL/SGOV and you will always get the short term rate and won't need to shop around Sure you may be able to find some CD or HYSA that offers 0.1% more interest for a short period of time
Equivilant to VBIL if youre on vanguard which prioritizes its own offerings
Look at Boglehead investment philosophy. For equity look into VT ETF for all US (60%)and all international (40%) VTI + VXUS if you want to adjust those allocations. VBIL for cash equivalent.
Well retirement is what 20+ years away, here is how risk works Equity Index funds like VOO/VTI , if you buy into them over time and hold for 20 years are low risk in the long term, 20+ years However short term they are risky , they could lose 50% plus in a few months, longer term (20+) if you DCA into them they are a safe bet. Cash or cash equivalents like short term bonds or money market accounts is safe in the short term , risky due to inflation in the long term. Longer term bonds are somewhat more risky than cash and get riskier the longer the term they are but are still less risky vs stocks So you do not have to pick , you can allocate a portion to something like VTI for longer term goals and allocate something to like a money market account or a ETF like VBIL what is effectively a HYSA very safe but long term risky due to inflation
Look at expense ratios for VTI, VXUS, BND, VBIL. These ETFs are basically what you have.
If you need short term money put it in a cash equivalent. SGOV or VBIL.
By the nature that SGOV holds almost all short term Treasury bonds its share price does not change much during a day, but it is not the same minute by minute. SGOV does not pay profit. SGOV distributes dividends from the interest paid by the Treasury bonds it holds. Since the dividends are from Treasury bond interest they are exempt from state and local income tax to the extent that the dividends are strictly from Treasury bonds. This is typically almost all of the dividends, but not 100%. There is a special procedure to claim the state tax exemption for dividends from federal obligations for state tax filing. All of the info you need is not on your broker 1099. It's a minor PITA. [https://thefinancebuff.com/state-tax-exempt-treasury-fund-etf.html](https://thefinancebuff.com/state-tax-exempt-treasury-fund-etf.html) Vanguard's VBIL is almost identical to SGOV.
1. No , its price can fluctuate during the day usually by a very small amount but the price can increase or decrease during the day. Looking at the chart it usually fluctuates about 1 cent through out the day 2. The distribution are exempt from state taxes 3. Technically I think VBIL has a slightly lower expense ratio but 2 basis points will be pretty unnoticeable
No $3k minimum, lower expense ratio. VBIL is even better on that front though.
Money that I keep set aside for short term taxes is invested into VBIL. Pays a nice yield and is pretty secure from volatility.
High yield savings, brokerage money market fund, short term bond fund. $8K at 4% for two months will make $53. High yield savings would be easiest. They are currently \~3.5%. If you are ready to start investing aside from this savings a broker can do it all. Fidelity Cash Management account has the best features for personal finance and broker investments. The money parked in the settlement holding is currently yielding \~3.9%. You could buy a short term bond fund like SGOV or VBIL that are currently yielding \~4.2%. If you go the broker route make sure to get ACH transfers set up so you can transfer the money to somewhere you can use it to pay your loan. ACH transfers take several days to set up initially. Fidelity Cash Management will allow you to have paper checks, online bill pay, and a debit card. Those can be used to pay things directly from the settlement fund. Beware that a new Fidelity account will hold initial deposits for something like two weeks before they can be withdrawn. Once the account is started get your funding source (bank, etc.) set up to do push ACH transfers initiated from the funding source. Push ACH transfers do not have a hold time before they can be withdrawn. Fidelity is not unique about this. The others also do it to some extent.
You get $1k in free margin so invest that in VBIL and you’re golden.
SGOV primarily holds Treasury bonds. The fund receives or accrues interest from the bonds. This causes the net asset value share price to increase daily until the ex-dividend date. If you own shares on the day before the ex-div date you get the entire dividend for the preceding month - even if you only owned it on just the one day before the ex-div date. Since the dividend is derived from Treasury bond interest it is exempt from state income tax. To claim the state tax exemption you have to get the year end statement from the fund that shows the percent of dividends from (Treasury bonds) federal obligations. You will have to do a manual calculation of state tax exempt dividends and make an extra entry in tax software to reduce dividend income reported to the state. This info is not on broker's 1099. Here's how to do it: [https://thefinancebuff.com/state-tax-exempt-treasury-fund-etf.html](https://thefinancebuff.com/state-tax-exempt-treasury-fund-etf.html) If you sell shares In between the ex-div date and two days before next ex-div date you get capital gain from the share price increase and not the dividend on the sold shares. Cap gains are not state tax exempt. They are taxed the same as ordinary income. SGOV current yield is \~4.2%, not 5%. FDIC does not cover SGOV or any other stock or mutual fund. SGOV holds Treasury bonds. That is just as safe, or safer, than FDIC. You might be more comfortable with a Treasury only money market fund. The yield is about the same as short term bond funds, like SGOV and VBIL. MMFs accrue dividend for every day you own them. You get the dividend you accrue even if you don't own them on the day before the ex-div date. MMFs share price is held at exactly $1 all of the time so there are no cap gains or losses from buying or selling shares. You generally need to buy MMFs only at the broker that sponsors them. There may be some exceptions. Ally Invest and eTrade may allow buying Vanguard's VUSXX MMF.
First, I'd drop it in $VBIL immediately, so you can earn something while you figure it out. Second, I'd consider how much you really need in the next few years. Money you won't need within 5ish years should be invested in the market to earn the largest return. Contribute that to your 401k (or Roth 401k, Roth IRA, Trad IRA) depending on your tax situation. With 100k total income filing jointly, you probably will want post-tax contributions unless you plan to retire early quite frugally. Definitely do some research on pre-tax vs. post-tax contributions, since your income is low enough to consider going full Roth 401k, Roth IRA. By contributing your income to retirement and using this cash to cover expenses, you'll be securing some tax benefits later on.
Stick it in $VBIL and then start your careful consideration. If you want it available at any time for a different investment, keep it in $VBIL. If you have 5 years before you will likely use the money, consider a mix of stocks and bonds, like 75% $VBIL + 25% $VT. If rates come crashing down, you will be better off with intermediate duration bonds ($BIV). If inflation remains sticky and difficult, then you'll be better off with $VBIL due to their short duration. If you have over 15 years or more before needing the money, just go 100% $VT.
A brokerage interest on cash doesn't matter you can always buy something like a money market fund or a short term bond fund like VBILL or SGOV what will pay the short term rate. So I really wouldn't get hung up on their interest rates on cash, if you want to get basically the short term interest rate just buy VBIL / SGOV what hold short term treasuries so you will always get basically the short term interest rate Also yes a Roth IRA is a good idea. Pick what ever brokerage you like best
Too many times people think you have to be 100% invested in equities or 100% cash. There is an in-between, and you can choose how aggressive or conservative you want to be. Tons of people say " don't invest in bonds they have horrible returns" Well cash has horrible returns too. It's fine investing in a more conservative way, and bonds can earn their return by keeping you invested or keeping you from panic selling, or waiting on the side lines for years because you are afraid to pull the trigger. Keep it simple, you can do a boglehead type portfolio maybe even do a 4 fund portfolio by adding something like VBILfor extra safety. Something like 35% VTI 15% VXUs 30% BND 20% VBIL Obviously allocate according to your own risk tolerance, high % of bonds (VBIL and BND) will add safety.
For the aggressive, honestly i just put in VOO and MGK (vanguard mega cap etf). The rest is my emergency fund with SGOV and VBIL. Set and forget.
You simply transfer money back into your bank account. You are probably waiting on [settlement](https://www.schwab.com/learn/story/7-things-to-know-about-t1-settlement) before the funds are available to transfer. >I want to liquify my investments by April 2026, so wanted to preplan.. :) https://www.reddit.com/r/investing/wiki/index/gettingstarted/#wiki_i_have_some_money_i_want_to_invest.2C_but_i_need_it_back_within_a_short_period_of_time_.28less_than_a_few_years.29.__how_should_i_invest_it.3F That money should probably just stay in a savings account. Or if you're ok dealing with the brokerage, a fund like VBIL.
SPAXX and FDLXX are both better than HYSA. FDLXX dividends are exempt from state income tax which increases its taxable equivalent yield. SGOV or VBIL short term treasury bond funds are another option currently yielding \~4.22%, with dividends also state tax free. On $12K for six months the dollar difference in income would only be about $40.
VBIL and live on the interest + social security + selling however much you need to cover the rest of your expenses each year (perhaps 5%?).
You could achieve a very similar interest rate using either a high yield savings account or using an investment account and buying into a money market account or a short term bond fund. If you use a bond fund that invest only in treasury bills then you would get the added benefit of that interest being exempt from state income tax (if that applies to you). VBIL is one ETF you could use, SGOV is another. All the big brokers offer money market funds. All these option should give you easy liquidity, and control of the asset while generating interest.
It’s definitely done well long term for decades and easy to follow. You could use something like VBIL or VGIT or even the new VTG for treasuries.
I use it , the benefit is schwab is actually a bank on the banking side . It may sound like a minor difference but I have had trouble in the past trying to do ACH pushes or pulls to a brokerage account never had an issue with a bank Like to pay my mortgage their shit website wouldn't recognize my brokerage routing and account number for automatic payment, I suspect this was a design flaw on their part but I have never had issues linking the schwab checking account to anything because I suspect its an actual bank account As far as cash you just need to buy a money market fund or something like VBIL/SGOV so its a minor annoyance and I really don't care about fractional shares You can buy fractional shares of index funds however, schwab offers S&P500 , a broad market , growth and value and foreign index funds organized as mutual funds with pretty competitive expense ratios , so having $15 left over is inconsequential to me Is it better then fidelity that is subjective but lots of people fractional shares are not a deal breaker .
The key is not to \*use\* the credit. So for example, if you have 10k in available credit, but you're putting things on the cards for say rewards points, that may not cover the whole of your emergency fund if something really big happened that you needed to pay for immediately (like the upfront cost of a doctor visit where you broke your foot or a tow bill at 2 am in the middle of nowhere). So it sounds to me like you could do some kind of split safely (like maybe 6-7k in a HYSA and float the other 3-4k in SGOV). Some emergency items (like furnace repairs, ER visits, or sewer repairs) offer SUBSTANTIAL savings for paying on the spot, so that's the key there for an emergency fund (or a sufficiently large credit card). Has any of your money come from a job? If so you can put that money in an IRA. I would say that your thinking is incorrect about an IRA - you should have one now if you have \*any\* earned income in 2025 and here's why: 1.) You can put 10k towards a first time home purchase. 2.) You can withdraw contributions at any time - so for example, if you put 7k in today, you can take out 7k even 5 years from now, and since it's matched to a contribution you wont pay a penalty. You can even put the money back in, in 60 days and not have it count against you. So say you withdraw 15k in contributions to buy a car, but talk the dealership down to 12.5k you can put the rest of the money back without any hassle. 3.) You wont pay taxes on the earnings and should you ever want to sell it doesn't create a taxable event. Also dividends are tax free (unless they're foreign companies). The advantages are too large to simply ignore them for no good reason. For my personal set up: 10% of all of my paychecks go into a ROTH IRA, and once that's maxed out for the year, I switch to my HSA through work. I don't make enough money to max both with just 10% lol. 10% of my paycheck goes towards "goals" - cars, house renovations, etc. I have a 401k at work that I put 6% into and they match me 4% to get me an additional 10% - so I'm actually saving 16% of my income in tax advantaged accounts and my company matches me to get to 20% so that 10% saved for "me" items is guilt free lol. In summary: I would put some money in a ROTH \*today\* as long as you have earnings to cover it. I would buy stocks with that money as you've outlined in your post. The rest, outside of a decent cash retainer for emergencies, would be in a taxable brokerage account in VBIL or SGOV (honestly for me the main use case for USFR, SGOV, or VBIL is how much money I have since they're different denominations). Any money you anticipate needing in the next 5 years I absolutely would not put into the stock market.
1. Make sure this "long term" money is in a tax protected vehicle like an IRA, which I assume it is? 2. There's a lot of advice about what to do with emergency savings. Mine is pretty different: a.) The ideal amount of money you need in an emergency fund is the full replacement value of your car (if you're American and don't live in a select few cities). Most people only really fall into big financial trouble if they can't handle credit cards, or their vehicle dies/has big problems, and they have to take out a usurious auto-loan. If you become wealthy enough to where that amount of money no longer \*also\* represents 6 months of spending, then proceed to save more. b.) Have your emergency fund in a high yield savings account like Capital One, Ally, Sofi, or the many other online banks that offer better interest rates. You never know when you will need that cash instantly \*until\* you have a credit card that you don't use that has a higher credit limit than your emergency fund. Say, for example, 12k represents 6 months of living expenses and you paid 10k for your car. You have a credit card that \*always\* has 12k available credit. You can then move your emergency savings out of a high yield savings account/or a taxable brokerage that is \*only\* in money market funds, and into a taxable brokerage account. c.) Once you have sufficient credit, you can move your emergency savings into things like SGOV, VBIL, or USFR. These will have a settlement period of 3 days or so - that's why I don't like using them in a scenario where you don't have sufficient credit.
Just buy $SGOV or $VBIL. Owning a covered call strategy ETF still has a pretty substantial risk of loss if the market tanks. If the market rockets, your upside is severely limited since the calls will be exercised. Ownership only makes sense if you wanted to bet on no big moves up or down. But, from your post, capital preservation seems most important, so that why you'd want treasuries, since there's pretty much zero risk of loss in nominal terms.
VBIL from Vanguard has less fees than SGOV
I really do not get the whole bitcoin treasury . If I want exposure to bitcoin I would buy bitcoin If I wanted to generate money off of cash, I would just buy SGOV/VBIL or short term treasuries It seems weird to go through a middle man to get exposure to short term treasuries or bitcoin when you can simply buy either directly
The HYSA is probably your best bet. Other options: If you invest it in a treasuries money market like VBIL, the interest will be free from state income taxes. Otherwise it's very similar to your HYSA. If you're ok with some flexibility in your sabbatical, you could shift some of the money into something like VT. You need to be prepared for the possibility of it losing, say, 30% of its value, but it may also grow enough to give you another couple of months. Good luck! I'm wrapping up one of these now, and while it's been very different than what I expected, it's been a really healthy time for me. I hope this will be similarly for you.
VBIL is the Vanguard 0-3 Month Treasury Bill ETF. The current yield is 4.21%. 0.51% more over the savings account on $200K is $1020 a year more in income without even calculating the $3K a month to be added. SGOV is a very similar 0-3 Month Treasury Bill ETF. Either is fine. The dividends on both are all or nearly all exempt from state income tax if you have that. The raises the taxable equivalent yield to be even better. If you use Vanguard as a broker their VUSXX Treasury money market fund is currently 4.18%. That would be another good choice. The ETFs can be bought at any discount broker for no fee. The ETFs and VUSXX are one business day liquid to cash out and transfer to your bank to use it. I would not leave the money in high yield savings and lose out on $1020+ a year. It's basically free money. Baby on the way? You're gonna need that $1020. Children are worth it, but expensive.
How far in the future? If within five years, maybe USFR, VBIL, or SGOV. If beyond that, VOO or VTI. But you should think of your portfolio as a whole, and have an asset allocation plan for all of it.
There are plenty of high yield accounts around. That being said, if you have access to a brokerage account already, VBIL or SGOV will likely give you more than any savings account, and the interest is free from state taxes as well. It's a very convenient way to hold short-term bonds. Or your broker's money market fund would similarly work.
Its not worth a $5 fee, as others have said you can invest in a Money Market Mutual fund or a fund like VBIL/SGOV that will give you approx 4.2% currently Paying $5 to get an extra 0.3% for 60 days is probably not worth it unless you have a million dollars
Basically short term treasuries , you can buy yourself or simply buy a fund like VBIL or SGOV
If you like treasuries (I do, too, but also live in a state with high income tax), VBIL is a newer option from Vanguard that undercuts SGOV, BIL, and the others on expense ratio and thus is normally going to produce the highest yield. TFLO and USFR come into conversation as well. They invest in floating rate notes, which are a thing the Treasury introduced about a decade ago and in fund form are essentially the same thing as the ultra short term bonds funds, but capture a small premium that allows them to produce higher yields despite higher expense ratios. A lot of people like these; personally I'm not quite sure what their liquidity will look like in times of financial stress. The difference between all of these is going to be pretty minimal though, so it doesn't really matter. This is just if you like to be an optimizer.
For a couple of years? Look at boxx. All of what would be taxable dividends go back into the etf, so you don’t pay tax on distributions (as you would with a CD, sgov/usfr/VBIL etc). Instead you’ll pay long term capital gains when you sell, which are usually a lower rate depending on your circumstances.
Almost any brokerage will have money market funds that pay 4% plus currently and you don't need to pay a $5 subscription for them Or you could simply invest in some ultra short term bond fund like VBIL or SGOV and get 4%+ as well
For the tax-advantaged account: whatever prime money market has the highest yield. For the taxable account: either a fund holding treasuries to be free from state tax or a fund holding your state's munis to be free from all tax. The muni rates [change frequently](https://www.whitecoatinvestor.com/municipal-money-market-yield-volatility/) so you'll have to try and get an estimate of the average and plug it into [a calculator](https://digital.fidelity.com/prgw/digital/taxyieldcalc/) to see which is better. As far as the treasury funds, the etfs have lower expense ratios than any mutual funds I'm aware of, and thus higher yields. VBIL is probably going to be the highest of treasuries due to having the lowest ER. Then there are TFLO and USFR, which invest in floating rate notes instead and are able to capture a spread premium above t-bills; those have the same tax liability but are a slightly different thing in terms of liquidity. Here's a handy tool from another redditor that tracks the highest yielding funds: https://yieldfinder.app/money_markets Be aware that not all the ones in this list are invested in tax-exempt assets, so you'll need to check that.
There is a way to convert unused 529 funds into an IRA, but that's still restrictive and it's limited to only a certain amount, so I understand not going that route. I don't think there's any one clear answer. I would probably do something like 60% VT 40% BND as a fairly conservative but still growth oriented portfolio. Depending on how you're feeling about risk versus expected growth you could adjust the bond proportion up or down. Or stay in cash equivalents (VBIL, CDs, bonds that mature then). Or even do something fun like [a risk parity portfolio](https://portfoliocharts.com/2016/04/18/the-theory-behind-the-golden-butterfly/). One important thing to consider when you're looking at these is whether you're going to be regularly adding new funds or not. The golden butterfly, for instance, requires regular rebalancing to maintain its attributes, but in a taxable account you probably don't want to sell funds to rebalance, so that means putting all your new money into the parts that are underweight. That also might just be more work than you want to do. https://www.ishares.com/us/literature/product-brief/ishares-core-esg-allocation-brief.pdf might be interesting as another option - they're like target date funds, but rather than adjusting the ratio over time they stay static.
I mean short term treasuries or money market funds or ETFs like SGOV/VBIL are pretty much garanteed
VBIL is currently yielding 4.19%, which over 7 years would give you a 34% rate of return. The rate will vary depending on what's happening with treasuries though, so for something guaranteed I'd look at CDs (or potentially bonds that'll mature then). I see some stuff while searching around Schwab that would be more than your needed rate of return. Depending on how you got this number, you may need to think about inflation as well. It would be hard to get anything with a _guaranteed_ real rate of return high enough (I think about 2.6% APY); i-bonds aren't that high currently, and I don't think any TIPS are either. You'd have to go with more risk and higher expected returns to compensate, but expected returns are not actual returns especially on that timescale.
The expense ratio is baked into the yield so you just need to look at the yield However most will return around what VBIL/SGOV ETFs so usually I just use those, they are ETFs so their price is not pegged at $1 but functionally they pretty much act the same
If you're considering purchasing any time soon (ie next couple of years), common recommendation would be to pull out to cash. That's even without taking into account the volatility of this administration. You'll certainly sleep better with the down payment in VBIL.
There is nothing low risk that is paying 5%+. Similar risk to HYSA would be things like short term bond and brokerage money market funds. SGOV and VBIL are good short term bond funds, currently yielding \~4.18%. Vanguard's MMFs VMFXX and VUSXX are currently \~4.23%. Other broker MMFs are lower because of their higher expense ratio. Fidelity's SPAXX is \~3.97%. The 0.58% difference between 4.18% and a HYSA at 3.6% on $45K would earn an additional $261 a year.
HYSA is easy. A money market fund that invests in treasuries (like VBIL) will have about the same yield but be free from state income tax. A little less easy to use because you have to have a brokerage account and buy the fund. That's where I would put it. If you decide to put some into stocks, be aware of the risk: you may get to your goal sooner, but you may get to it later. There are no guarantees of what can happen, but a good rule of thumb is that any portion invested in a very broad stable fund like VTI could halve in value and take five years to recover. If you're ok with that sort of impact on your home-purchasing, then sure, but if that sounds like a no way man thing, keep your money out of stocks.
SGOV is perfectly fine. There are a few other options that give slightly better yields (VBIL is the same thing but lower expense, TFLO and USFR invest in floating rate notes which are a different type of investment, and then if you don't care about the state income tax exemption prime money market funds can return a little higher), but it's up to you if you care.
SGOV is perfectly fine. There are a few other options that give slightly better yields (VBIL is the same thing but lower expense, TFLO and USFR invest in floating rate notes which are a different type of investment, and then if you don't care about the state income tax exemption prime money market funds can return a little higher), but it's up to you if you care.
About 4-5 yrs away too and I recently went from 96/4 to 88/12 equity/ fixed income. The latter is cash , VBIL , a small pension and <3 yrs treasury ; No corp bonds and no long duration of any kind. It pays 4% so thats ok. Bonds are medium risk low rewards so I’m not a fan + there s a big inflation risk. Rationale was lining up first two yrs of expenses thus reducing the variability of when i retire. 4 yrs treasury+ 2 yrs = 6y to recover from upheavals and USA self-harm I see in 2025 on top of normal volatility. It was time to start the glidepath.
There are many short term funds to put that cash to work. At least give VBIL a thought while you figure out what to do for the long term. And like everyone else said, you can’t time the market. DCA if you can afford it.
You can read the "breaking the buck" section here: https://en.wikipedia.org/wiki/Money_market_fund We normally have low six figures in VBIL or similar funds in case that helps. I'm just some person, and I can't provide any guarantees, but as I've looked into it I am satisfied with the risk of the treasury funds. I'm _not_ quite as sure about the floating rate notes (TFLO and USFR) because we haven't seen how their liquidity holds up in weird market conditions, so I don't use those even though they're broadly considered extremely safe as well; that gives you an idea how conservative I am with risk. In my opinion: they're essentially the same in risk. Really it comes down to whether you're ok with the hassle of dealing with a brokerage versus a bank account.
Not the only option, but an easy one would be to dump it into VT, which is a cheap all-in-one fund that invests in (as close as possible to) the entire world stock markets. And then as you get closer, either transition it into something like VBIL that's basically cash with a good interest rate, or if you're flexible with when you buy (that is, if the market crashes you're ok waiting maybe five years for it to recover before you buy a house) then you could keep it invested to hopefully net some additional gains.
If I wanted to hold cash I would buy a T bill ETF like SGOV or VBIL. More flexible than a money market fund.
If you want it instant it needs to be in a savings account with the same bank as your checking. We do a tiered emergency fund. One third is in savings with a national bank for immediate access. One third is VBIL. One third is moving [into i-bonds](https://tipswatch.com/i-bond-manifesto/) as we can buy them. You can consider doing something like that if you want, but if it's a small enough amount of money the optimization may not be worth it for you.
Schwab has a variety of money market funds: https://www.schwab.com/money-market-funds Broadly you're thinking of three categories: 1. Prime has the highest direct yield 2. Treasuries will be slightly lower but free from state income tax 3. Municipal funds are much lower but free from both state and federal income tax, which depending on your bracket can be worth it There are also [etf money markets with lower expense ratios and thus higher yields](https://yieldfinder.app/money_markets) - I personally use VBIL for most cash in Schwab. ETFs take a day longer to settle to be able to transfer outside of Schwab, but if you're going to invest it within Schwab you can sell and buy immediately as long as the market is open, versus waiting a day for a mutual fund to sell.
Traditional advice centers on funding retirement. It sounds however like your goal may be to make a change much earlier in life. I would then be storing this in simply a high-yield savings account or VBIL and using it sometime to fund living expenses in between jobs to give you time to be more selective with employers, get further education, or try out a business idea. This is inspired by https://www.latimes.com/california/story/2024-07-31/study-details-what-happened-when-la-residents-were-guaranteed-1000-dollars-a-month and some personal experiences.
Just have her open up a brokerage at fidelity and use one of the many money market funds or ultra short term bond funds like VBIL or SGOV
VBILX is a different thing. VBIL is just a money market fund that buys short-term treasuries. It is no less principal-protected than buying the treasuries yourself - just more convenient (and you pay a very small management fee). If you looked at a graph and were scared, the NAV goes up according to the rate of t-bills until the monthly dividend distribution, at which point money is distributed out and the share price goes down accordingly; VBIL is fairly new but you can look at SGOV or BIL to see how it happens. There is effectively no risk of losing principle. If you want to be protected against interest rate risk, then you need to move to as short a duration as possible - which means CDs are the wrong direction.
Appreciate the suggestion! I was looking into VBILX just now—it seems like a solid option for longer-term conservative investing, but my main concern is the interest rate risk and price fluctuation over a short 6–12 month window. Since I may need the funds soon due to a possible military move, I’m leaning toward principal-protected options like T-Bills and CDs for now. But I’ll keep VBIL on my radar for the future when my time horizon is a bit longer!
All of those options are fine, but why the combination? Personally I'd just dump it in VBIL and call it a day.
VBIL is the same stuff but even cheaper. You can also get into floating rate notes with USFR and TFLO and grab a small spread premium, but FRNs are a newer thing and it's not totally sure how liquidity will work in the event of major market movements, so I'm personally fine giving up that premium.
Equities give you the opportunity to do it sooner, but also the risk of it being later. Is that ok with the two of you? As someone in the middle of a sabbatical, I also want to point out that if your assets _remain_ in stocks as you start the time, you may have to cut it short if markets dictate, so generally at least by that time you should move into short-term stable assets. With the amount of money under discussion, depending on where you live there's a compelling argument for treasuries (say, VBIL) over an HYSA, as the dividends will be exempt from state income tax. For some states there are also municipal money market funds that offer lower rates but are fully tax-exempt and may be better depending on your situation.
Sell it. Reserve enough for the taxes. Store it in a savings account or VBIL. If selling is hard, do one third each month for the next three months.
The only real difference is that you pay a small fee for the convenience of not having to manage the ladders yourself and being able to buy and sell in arbitrary dollar amounts. Given the extremely low expense ratio of some funds (I'm mostly using VBIL, at .07%), that's well worth it to me.
I hadn't even heard of VBIL until you mentioned it. Looks good. A fairly recent addition to their lineup I think. I use VCSH for cash equiv and then tier up to VCIT, BIV, etc. All more volatile than VBIL or SGOV. Unf, if rates remain high, they'll continue to underperform.
I hadn't even heard of VBIL until you mentioned it. Looks good. A fairly recent addition to their lineup I think. I use VCSH for cash equiv and then tier up to VCIT, BIV, etc. All more volatile than VBIL or SGOV. Unf, if rates remain high, they'll continue to underperform.
My first citizens HYSA is 4.55% and Vanguard’s settlement money market VMFXX is 4.21. 5 would be nice though. Parking most of my emergency fund in VBIL at 4.3 right now.
Your broker will have a mutual fund, and here are some ticker options if you prefer an etf: VBIL, SGOV, TFLO, USFR. There are more, but those are all cheap and invested in treasuries.
Honestly, I'd buy 100% $VT and retire sooner. That's your best bet. To me, being super rich isn't worth risking being rich enough to never work again much sooner. If you want to swing for the fences, I'd suggest $RIVN, which should be worth a fortune when/if $TSLA starts contracting. $VBIL / $SGOV while you make up your mind.
I switched to vanguards VBIL, lower fees but same index
There are a bunch of other options, too. TFLO is the same thing as USFR but for some reason no one talks about it, VBIL is a new Vanguard version of SGOV but cheaper. Look through some options: https://yieldfinder.app/money_markets Depending on your state taxes, a lower yield muni fund might net you more, so that's worth checking too: https://digital.fidelity.com/prgw/digital/taxyieldcalc/
Totally agree. But instead of the settlement fund VBIL or other options should be considered!
USFR/VBIL/SGOV take your pick. They’re likely all better yields than any sweep and offer a stable price and a dividend once a month.
Sell your gold. Buy $VBIL. Then, exchange 1/12 monthly for $VT. Hold that until retirement.
Longer term bonds are not guaranteed a higher rate of return. They are more subject to fluctuations in the interest rate, which is why there's more risk and hence why they usually demand higher rates. Always remember that higher risk investments have higher _expected_ returns but without guarantee, which is why they have higher expected returns to compensate. If you know when you're going to use it you can buy bonds and hold them to maturity, and ignore the secondary market. You'll know how much money you'll get at the end. The only thing you don't know is how much buying power you'll have from that money (ie how much inflation has happened). Series I bonds can mitigate that but you have a limit of $10k per year. Generally I think most people should just shove it into VBIL and call it a day. You'll have plenty of liquidity, it'll respond quickly both up and down with interest rate changes, it's pretty safe, and there's nothing to manage. Also, your gains will be free from state income tax.