VMFXX

BigDipper0720

You're missing my point entirely. The VMFXX shareholder owns shares in VMFXX. They do not own, nor do they have any rights, to the underlying securities. I was making no statement about safety

Big_Muscle9736

VMFXX is a great spot to park cash. It is the default settlement account with Vanguard. VMRXX is essentially the same fund but has 0.01 lower expense and is a stand alone money market fund (must place a buy order).

SirGlass

Did money market funds that only held treasuries have issues? I thought VMFXX only held treasuries but looking at it it holds some repo and other goverment obligations, and others hold corporate paper I could see getting into issues. I was thinking of VUSXX what is like 98% treasuries

bobdevnul

Money market and short term bonds funds are a good place to put part of emergency funds for needs past one week after a need event to earn some additional yield. VMFXX is government bonds, but not strictly Treasury bonds. VUSXX is all Treasury bond. SGOV and VBIL are short term Treasury bond fund ETFs. Selling them to get cash will take one extra business day. If you are going to use any of these get ACH transfers to your bank set up so it is ready if you need it. Getting them set up initially can take several business days. You need to do this to get the money somewhere you can spend it. You can't spend it directly from a Vanguard account. Fidelity is a much better broker for personal finance.

greytoc

You're correct. One additional detail... VMFXX, like many funds, is a separate legal entity and company. Most funds including VMFXX are setup as a RIC (Regulated Investment Company). The RIC itself is a separate legal entity that is managed by Vanguard. If Vanguard becomes insolvent or any investment manager - the various RICs managed by the investment manager are not insolvent. The funds are typically just sold to another investment manager or liquidated.

SirGlass

The only way VMFXX loses value is if the goverment defaults If the goverment defaults on its debt, well banks would also be screwed and FDIC would be out the window If the goverment cannot pay out on treasuries , banks would be insolvent. It would then not have money to bail out banks through FDIC because its in default In a crises the goverment will pay treasuries before anything else , its in the constitution, the goverment has to honor its debt.

Im_Still_Here12

This. I keep my corporate cash reserves in VMFXX and have done so for years. Six figures worth. Beats the breaks off the crappy interest rate my bank was offering for their MMF and HYSA.

JimmyKur128

The piece that is easy to miss is not another product. It is how fast the money has to become spendable cash in a bank. Split the emergency fund by access time, not by the headline yield. The slice you might need this week (rent, a deductible) stays somewhere you have already tested: the HYSA, or Cash Plus if a small withdrawal actually landed in checking next day. A tenth of a percent is cheap insurance against a Friday problem. The rest, the money you would not touch unless income stopped for a month, can sit in VMFXX, SGOV, or short T-bills. Those are not bank deposits. You own a fund or a bill, you wait for settlement, then you transfer. Fine for a known expense, awkward for a same-day one. Two checks before you move the whole HYSA. First, pull $100 out of whichever Vanguard option you pick and time it. The yield on the page is not the same as money in checking on a Friday night. Second, state tax. Treasury interest, and a high percentage of a government money market in most years, is often exempt from state income tax. A HYSA is not. On a large balance that gap can beat the APY difference, but only if the fund's latest government-income percentage actually supports it. I would not park an emergency fund in long bonds or equities. Duration and drawdowns are the opposite of what this pile is for.

BigDipper0720

Mmm. I'm not sure this is exactly right. VMFXX is a security. One owns shares of VMFXX. One does not own the underlying securities Securities in a Vanguard account would be SIPC insured. This means if those VMFXX securities go missing, SIPC will replace them (eventually) with the same number of shares of the same security, VMFXX. Note that if your shares of VMFXX lose value between when they go missing and when SIPC replaces them, then that monetary value is lost. This would be a highly unlikely event for a money market fund holding only Treasury securities, though. That risk applies more to shares of stock or stock mutual funds. SIPC replaces securities; not cash or security value.

Buck_98

Good info. USFR and VMFXX look to be nearly identical and both are about 0.6% higher than my current HYS rate. I realize 0.6% won't be life changing but it'll buy lunch a couple times a year. Do you put anything in T-bills directly or just use a fund that invests in US Treasuries? I roll 4 week T-bills (currently at 3.8%)

Mindless_Acadia_7382

FDIC insurance means that the federal government will make you whole if the bank goes under. VMFXX buys bills that are directly issued by the federal government. If Vanguard goes broke, then you stil have the right to get the underlying T-bills, which are issued by the United States government. In terms of safety, both are identical since both are backed by the federal government.

420Secured

Technically I’m in VMFXX, so getting 3.75% on cash, soon to be 4%.

420Secured

VMFXX 👌

No-Reaction-9793

I use VMFXX with Vanguard and they only charge .11%

MattieShoes

Open a brokerage account. It's just a specialized bank account that allows you to invest the money in it. Then if you don't have an emergency fund (six months expenses), then shove that much into a money fund. Which money fund depends on which brokerage you use. Like SPAXX (Fidelity), SWVXX (Schwab), VMFXX (Vanguard), whatever. The key here is that it's low risk, something like a savings account. Beyond that, you can invest in whatever you want. But if you don't know anything and you're looking to get your feet wet, a broad ETF is probably what you're looking for. Something like VOO (S&P 500), VTI (total US index), VT (total world index). Be aware that you are taking risks with that money -- if the market drops 50% tomorrow, half your money disappears. But long term, markets tend to go up. You should also consider opening a Roth IRA. It's a brokerage account specifically for retirement funds, so you get some tax benefits for putting money in there but there are restrictions to when you can take money out. Also there are income limits, but ways around those income limits, so it's a whole thing.

BartSimpsonGaveMeLSD

Have you already maxed out your IRA this year? If not, move $7,500 into your Roth IRA and do a 70/30 split between VTI & VGT. If you already did that, then invest 5k in VGT. Move the remainder (either 37.5k or 40k) into VMFXX. Treat the VMFXX account as a fully funded 1 year emergency fund. Some folks say as little as 3, others say 6 months. But having a full year already funded, I’d just lock it in and collect interest from Vanguard. Having gone through a layoff, it makes it much easier to sleep at night. Every few months, sweep out a few hundred you gained from VMFXX and invest into VTI in your traditional brokerage. Now just focus on maxing your 401k contributions.

AllPinesMustDie

I use the Vanguard Federal Money Market Account (VMFXX) for all non-invested cash. Current yield is 3.62%.

Serratas

100k in VMFXX. I live in a very HCOL area and it helps me sleep better at night knowing I can deal with most emergencies without having to pull from investments.

Thatguywhoaskedit397

Is it literally cash? We keep our emergency fund in Vanguard’s VMFXX. Pays monthly, treated like cash, not outperforming inflation right now but close.

dak4f2

Yield factors in expense ratio. So yield vs yield is apples to apples.  SGOV is ~95% state tax exempt. For VMFXX, it only holds 30-60% in US government obligations vs 95% for SGOV so > if you reside in California, New York, or Connecticut , you may not qualify for any state tax exemption in certain years [for VMFXX]. These states require money market funds to hold at least 50% of their assets in U.S. government obligations at each quarter-end within the tax year, and VMFXX occasionally dips below this threshold due to its investments in repurchase agreements.  

tremblingtallow

From what I see VMFXX is 3.56% yield with a .11% expense ratio (from their website) while SGOV is 3.56% yield with a .09% expense ratio (according to Robinhood) Probably doesn't matter which one you hold cash in

wisdomoftheages36

You can open a vanguard account and make around that much just off the monthly interest VMFXX. With $100,000 in at current 3.5% you would make approx $3,500 in a year 3,500/12=291.66 monthly

Muted-Pace-5706

at 33 with a 30+ year runway, bonds dont add return, they just smooth the ride. the question is whether you actually need the smoother ride right now, and if your job is stable and your emergency fund is building, probably not. VMFXX already gives you some ballast without locking in the duration risk that bonds carry when rates are still uncertain.

Im_Still_Here12

Open up a corporate account with Vanguard or Fidelity. I opened one for my corp and keep my cash reserves in Vanguards VMFXX Money Market Fund. I used to use CDs to keep my cash reserves in at my local bank where I have my commercial checking account. But their rates suck and I don’t like locking money up with CDs

Early-Front3917

Hi All, I am hoping to save to buy a home and afford a surgery. Both huge expenses. 40s, 85k-125k year dep on part time job and bonuses. I do have a savings as well as 32k invested, and diversified. (25% growth inc VOO, QQQ; 25% div QQQI, F, O, and more, 50% in VUSXX and VMFXX. Only $85 a month div. I'm wondering if it's smarter if I get a $100k trailer and losing investment cash. Or keep renting at an absurb 2500 a month. The trailer at least only slightly depreciates now with inflation. Id expect it to resell for $95k in a year based on the others that have sold. It is trailer park with lot rent. With the trailer I'd lose up front money but have 1500 more monthly to invest. Homes here are 6-12% increase a year. Very hard to outpace. Thus far my investment is at 10% but kind of a weird market. My pay is up 45% over last year. What are your thoughts if you were in the situation? Not financial advice.

MediocreCamp707

Of course, it is in the vanguard money market VMFXX. I consider that interest to pay for my monthly lawn mowing service lol.

DistributionBroad173

VMFXX

brotatochip4u

VMFXX

thewimsey

>In this sort of situation, would you trim back on tax-advantaged retirement savings in favor of investing more in a taxable brokerage (even if it's only in SGOV due to the time horizon)? I did something like this when I bought my house, but I didn't characterize the SGOV (VMFXX for me) part as investing. The retirement account was investing. The rest was liquid savings for the house. When I think about investing in a taxable brokerage, I think of long term-ish money outside of my retirement accounts that I am still investing for a return, in equities, and not because I'm saving for a particular expense.

joesmith127_reddit

So my main savings account (Goldman Sachs) HYSA APY is 3.50%. I've got a Vanguard settlement account (VMFXX) and 161 shares of SGOV in my Schwab account. Can I do better than this and/or how should i best allocate the funds between those three accounts?

infrastructure

Bro could stick this in VMFXX and make like 6k a month but instead chooses to play the casino. One of us one of us

Says_Anything

I’m 38. Live in the USA. I come from a very poor background. I’ve worked really hard to save. I have $120,000 in my IRA- all on VOO. And I have $800,000 in my brokerage account. But it’s just sitting in VMFXX. Because of my childhood and young adult years being broke and watching a long history of bad financial decisions by family I’m just afraid to lose it. Any one have any advice? Should I just trust that investing in ETF’s like VOO is the way to go? Sales based job making an average of $150k after tax. I’m obviously risk averse. No debt other than a mortgage that I owe 400k on and it’s at 2.5% interest.

oldirishfart

VMFXX is not growing at 2% a month - it’s something like 3.6% per year

monster1551

Roth IRA sale Question I'm looking at a friends Roth IRA because they asked me for help. They are young. While looking at the positions, I noticed 9000 units in VMFXX which I personally don't know much about, but after looking into it a bit it essentially seems fairly liquid and that it is basically acting as a form of high-yield savings account. After discussing with my friend, we are concluding that that money/position would be better off in an actual index fund to grow with the market over the next 20+ years, instead of gaining 2% dividend every month. My question is, because it is in a Roth IRA, are we free to sell that position and reinvest that into a different fund without paying a penalty, assuming the money still stays in the actual Roth account? Will they have to pay taxes on the VMFXX sale? Thanks everybody for the help!

HoneyBadger552

you shouldnt be looking at any Black Rock collective. VMFXX or whatever their SP500 fund at 90% to 100%. Rest in cash. the fees on that blackrock have got to be huge

lawyermom112

Are they though? Maybe they don’t have that much cash and don’t care if they lose 20k I have low seven figures invested and am 40% cash in my post tax right now. Thinking of stacking cash for at least a few more months into VMFXX tbh. 

lawyermom112

Not 5% but VMFXX yields closer to 4%z 

SirGlass

I mean your 401k is pretty much controlled by your employer so you have no control over that IRA yea you can choose any company HYSA , personally I do not have a savings account I just use a brokerage and invest in money market funds or ETFs holding ultra short term treasuries . With vangaurd if you just open a brokerage account and transfer money int, the money will be invested into VMFXX what is a pretty good fund and should pay comparable rates to a HYSA. So yea its normal to have a few different accounts. I like to sort of simplify what is why outside of my 401k controlled by my employer I basically have everything at schwab , checking , brokerage , Roth IRA .

rakshere

i too called them and they said there is a problem at their end, they are working on it. the VMFXX dividend is received, it is just the VUSXX having problem

lawyermom112

I don’t get how me having low seven figures invested means I shouldn’t be commenting… my point is a lot of people are more focused on capital preservation. I’d rather miss out on some gains than have losses for an extended period of time especially when VMFXX pays close to 4% Reddit tends to skew UMC so a lot of people probably have more cash invested and are also more focused on capital preservation and don’t want to buy now  

lawyermom112

Even before the war these guys thought that there was going to be a bear market. Scott has said it may be as bad or worse than 2008 btw One of them, in October, said that “early 2026 will be the end stages of the bull market” … looks like he was right. This guy used to be employed as a professional trader  Nobody has a crystal ball but these guys seem to know way more than me. I’m waiting to see what they say before I go back in with the 50% of my post tax account that’s sitting in VMFXX

lawyermom112

I’m down 200k I have a bit more than OP has invested I can also save 100k-120k a year. At this point, it’s like why would I throw good money into a bad market. I’ll still max my retirement accounts because they’re mutual funds, but post tax I’m stacking VMFXX. Everything this admin is doing is terrible. 

lawyermom112

Similar age here and slightly more invested. I’ve been down 200k or so, but I’m also an individual stock investor in my post tax port. I don’t trade my retirement funds since they’re in low risk mutual funds Right now I’m 50% cash in my post tax account—- I have a few hundred thousand sitting in VMFXX earning 3.6%.  I’d rather miss out on some gains than go red in my portfolio tbh Right now I can save at least 100k-120k a year across my accounts, I feel like it’d be dumb to throw good money into a bad market. So right now my plan is to stack more cash in my post tax accounts into VMFXX  Fwiw I follow a few traders and Scott Galloway and all of them think it’s going to get worse from here. One of them even called the top back in October but I wasn’t yet following him 

lawyermom112

Cr, I mean people talk about holding though lows.  Can they really hold if we go down 50%+? I’d rather miss out on some gains than go red in my port I’m 50% cash in my post tax account. Have a few hundred K in VMFXX making 3.6% in post tax  My 401k I don’t trade since they are in mutual funds but  I’m already down 200k in my post tax account and don’t want to wait until I’m down another couple hundred K or whatever 

DistributionBroad173

For people starting out the Fidelity Zero Expenses Funds puts it over the top. I recommend FNILX all the time. The negative on these Zero Expense Funds, if you get mad at Fidelity, you must sell to get your money out, they are proprietary. I am Vanguard since 1983. I was a Fidelity client from 1996 to 2021 or so. moved it all to Vanguard. why? I had been with Vanguard the longest Vanguard VMFXX actually beats SPAXX, so Vanguard wins the sweep accounts contest. Schwab sweep account pays something like 0.01%. For me, it is either Fidelity or Vanguard. Fidelity has more bells and whistles and real physical offices. Vanguard NEVER asks me to talk to their advisors. Vanguard HQ Campus in Pennsylvania is the only offices site and is under high security. Fidelity has the most money under administration, Vanguard has the most money in Assets under management.

Relative-Wealth-3335

Same thing happen to me. Layoff, 401K to rollover IRA, no choice but cash out everything a month ago. I bought money market fund VUSXX / VMFXX and energy ETF while buying myself time to do more research. Then suddenly war began.

Gladiz1972

I didn't say anything bad about Fidelity it's a great company maybe you should reread my comment I am just trying to figure out why this CFP is specifically recommending that particular money market fund from Fidelity when you can do better at Vanguard money market funds in terms of yield could be a difference of 20 -30 basis points between the 2 and I don't want lose a few thousand dollars at the end of the year investing with Fidelity over Vanguard .By the way just go to Google and check out the yield on VUSXX or VMFXX and compare it to FDRXX .

Gladiz1972

Actually the highest money market fund yield right now should be Vanguard VUSXX or VMFXX since they have the lowest expenses it's between 3.60 -3.70 now

winkelschleifer

VMFXX is currently paying 3.59%.

figoonitee

Second VMFXX.

Gladiz1972

I am in FL so VUSXX or VMFXX is the clear winner for me anyway

DistributionBroad173

The knock against Schwab is that their sweep account pays diddly. If you do not care about Schwab automatically paying you 3.5% on your money instead of 0.01%, unless you do something, then go with Schwab. Fidelity and Vanguard puts your money into their HYSAs, Fidelity is SPAXX and VANGUARD is VMFXX.

Lucky_Platypus341

I have all 3 and would recommend Fidelity. Fidelity: good sweep fund (SPAXX right now. is 3.32%, Schwabs pays 0.1%, so uninvested cash gets nothing), fractional shares, easy treasury ladders, easy platform to use, can do bill pay right out of your sweep fund (so get HYSA level interest on money you pay bills with), running balance on activities make using it for bill pay easy. If you decide you wanna move, no fees for closing the account (others charge $100). Schwab: best for active traders (good tools, and opens trading activity on the side instead of reloading over your current window), people who want a Coverdell ESA IRA (not offered by Fidelity or Vanguard), and people who think they may go ex-pat in the future (had int'l branch). Not supporting fractional shares and not offering any interest on the sweep fund are my main issues. Vanguard: find myself going through lots of menus to do simple things, and doesn't offer running balance on activity screen (have to generate a PDF report). An example is I'm looking at a holding. I click the "cost basis" link and it takes me to a screen of all my holdings again where I can scroll to the one I was just looking at and click a expand arrow to see all the bases. I should be able to access all info relevant to that holding from one screen. Vanguard offers the best rate on their sweep fund (VMFXX is 3.59%, so 0.27% better than Fidelity). Vanguard offers eft versions of their biggest mutual funds at a lower ER (0.01% lower), so you can access all of Vanguard funds anywhere. Fidelity and Schwab have their own versions as well.

Lucky_Platypus341

25yo is not late. We have all three (Fidelity, Vaguard, Schwab). I've used Vanguard for 30+ years. I would recommend Fidelity of the three. As others have mentioned, Fidelity allows fractional shares more broadly. Sweep fund yields: Current 7-day yields are 3.32% for SPAXX (Fidelity) and 3.59% for VMFXX, so about 1/4 of a percent more at Vanguard (or $2.70 per $10k per year). Schwab pays virtually nothing on sweep funds (0.1%, I think?) -- which really annoys me. VANGUARD gets the nod, but both Vanguard and Fidelity are respectable. FEES: If you don't like Fidelity, they won't charge you to close your account. They will even reimburse fees charged by the other two. Both Vanguard and Schwab charge fees to close accounts. INTERFACE: all are adequate IMO for basic stuff. I prefer the Fidelity web interface over the Vanguard mainly because I can see the running balance on the activity page and look at an individual account more easily.YMMV, but you will likely learn to deal with any. I think Vanguard doesn't suck as badly as it used to, but I still find myself going through multiple steps to do simple things. BANKING: This is where Fidelity and Schwab spank Vanguard IMO. Both F & Sh offer banking services. I like that I can pay bill out of Fidelity and it will use my interest-earning sweep funds to pay for them. I also have their debit card which allows you to set limits and control them from the website easily -- great for traveling as they have no foreign transaction or ATM fees. If I pull funds from a bank account, I can immediately use them for trades (credited immediately). Vanguard is slower push/pull IME. Again, with he interface, I wouldn't want to do banking with Vanguard anyways. The two places Schwab really shines is that they still offer Coverdell Ed IRAs (Vanguard is phasing out there's and Fidelity already has). The other is Schwab has an international form making it a favorite of ex-pat communities. In a taxable account, still to index efts instead of proprietary MFs. Efts also do not have minimum purchases (and with Fidelity can buy in dollar amounts; Vanguard only allows this for their efts). Vanguard charges 0.01% more for their MF version of their eft funds, so no reason to hold mutual funds.

Gladiz1972

Actually Vanguard is around 3.64 for VUSXX maybe VMFXX is between 3.59 and 3.66

Gladiz1972

The SWVXX pays around on the last day of every month for a slightly higher yield Vanguards 2 money market funds VUSXX or VMFXX probably closer to 3.70

MONGSTRADAMUS

That definitely would catch them up the other big brokers in US. I don't know if its only me , but I wonder really why they don't have settlement account automatically defaulting to money market fund. If I am not mistaken vanguard has VMFXX and Fidelity has SPAXX/FZFXX. At a min you would be getting 3.33 % yield. If I am not mistaken both schwab checking and brokerage account don't get anywhere close to that unless you buy their money market funds separately or buy something liike vbil or sgov., also don't think they are as liquid as if you had a default settlement account as far as I know. . I will admit it may user error with a lot of stuff so far as its been less than a month since I opened the account.

v_x_n_

If funds are actually emergency funds, perhaps T bills which have no state or local taxes attached or VMFXX which is taxed like ordinary income is what you are looking for? T bills are sold with varying maturities of 4 weeks to approx 2 years so you could do a ladder or just set it to reinvest. The down side of t bills is that the interest does not compound automatically. Instead t bill interest is paid when t bill matures and is then deposited in your account.

TinyAspirer

No, just my overall account, has some VOO and some VMFXX. Not sure why its having this error though

redditadk

TKeep an emergency fund of +/- 6mo salary in high yield money market like VMFXX. Buy and hold only stocks you are willing to hold at least 1 year. Active trade only what you can afford to lose. Put 80% of your investing funds in VOO and never touch it.

Popular-Capital6330

Thanks but it's a grand just for the stock market. I'm treating it as if it might vanish. Your assessments make perfect sense. Thanks. on another note: I think I have VMFXX in my Roth.

Low_Masterpiece1560

If one thousand dollars is all the savings you have, then I suggest keeping it in a money market fund for emergencies. The fund I recommend is VMFXX which you can buy at Vanguard. You don't even have to buy it, you can just designate VMFXX as your settlement fund after you open a Vanguard account. If you are starting an investing journey, and you plan to gradually build up a small portfolio, then I suggest the following simple asset allocation which you can set up in 15 minutes at Fidelity or Schwab: 34% SGOV - treasury bill (30-90 day government bonds) ETF 33% IAUM - physical gold ETF 33% VTI - broad US stock market ETF You can buy fractional shares to make the percentages work out. This portfolio returned 8% annually for the last 30 years, with limited drawdowns and volatility. Occasionally, when one of the asset classes goes significantly out of whack, you'd need to rebalance.

roadbikemadman

No, don't take it out of the account, move it into something earning even a little bit of interest, e.g., VMFXX or similar.

Hotdog_catsup

If you have a tv, ac, a roof over your head, car, and a job; roll with the punches. Accept the hand you’ve been dealt, and come up with the best possible solution. I’m not down 33m but the odds of me making it all back in short term are low. Long term outline and stick to it. Easier said than done: I know. With autonomy on the rise the future is very uncertain. Maybe hold what you have in VMFXX and then buy SpaceX at IPO. Or some other well researched growth potential stock. DKNG is a casino and buying the stock is like betting on the house. Casinos grow very fast. (nfa) Times like this can be opportunities for new investors. 33mil is gone, but what if you get back enough to start over? That’s just a thought though. Unless you have a job that pays 6-7 figures. BULL is another growth potential stock (imo.) The hourly SPX futures must be increasing profits significantly, plus all the other event futures. Look at RH last year. Options are rigged. And you’re playing against AI now. Who always makes the closest odds? Vegas. AI uses everything for its conclusions. Not to start a political conversation (I’m not making any preference here, admin)but RH event contracts had Trump the winner. Polls said no. Bet said yes. Gambling odds don’t play.

v_x_n_

VMFXX is federal money market. VT is well diversified and easy. Personally I do VTI and VXUS. I want to have about 15% in diversified international etf which is why I don’t do straight VT. Just personal preference.

rkoloeg

I just use a spreadsheet and the money is all in one fund (VMFXX in my case, but SGOV works too). Currently I have about a dozen categories in there. Alternatively you can make separate brokerage accounts for separate purposes if you want the the interest from particular funds to roll back into them (although you could track that in the spreadsheet too). I did this with my future house down payment, it's just in a separate brokerage account labeled "House".

AggieDem

VMFXX at Vanguard is one option. That said I'm just a guy on the internet, so by all means do some research.

DistributionBroad173

SPAXX is Fidelity's HYSA Money Market account. I believe it is actually the Settlement Account and Fidelity just makes it so your money earns more than 1% like many other brokers do to you. Vanguard, Fidelity, or Schwab are all good brokerages or account holders. I use Vanguard and our Settlement Account is VMFXX and it pays 3.9% yield at this time, which is better than Schwab or Fidelity by a little.

mvz5bs

For a 1-2 year timeframe with easy access and minimal risk, look at high-yield savings accounts (currently 4-5%) or Treasury bills (3-6 month durations). Both offer inflation-beating returns with virtually no principal risk. Money market funds are also solid options (VMFXX, SPAXX) with yields around 5%. If you're comfortable with a tiny bit more risk for potentially higher returns, short-term Treasury ETFs (SHV, BIL) or CDs with laddered maturities could work. Just avoid anything with stock market exposure or long-term bonds that could fluctuate in value. Remember that keeping house funds separate from investments helps maintain discipline with your timeline.

EEcav

They do, but they don't lose value. VMFXX for example will give a nice 4% right now with no risk of the value going down. VBND has a similar yield but its price can go up or down with interest rates. Having a hard time deciding which will give better returns over the next year, but it seems things are starting to tilt towards VBND being a better value than VMFXX

Inchmale

Why? VMFXX is currently returning 3.88%. If the fear is a market downturn, just keep more in "cash" (VMFXX) and still win. I'm not spending cash I would otherwise pay the loan down with - I'm saving/investing it in one form or another. 26 years to go on a 30 year loan is long way to go, and I would expect many downs and ups in the market during that time. However, once you pay down extra money on a loan, you can never get that back. 3% loans are unlikely to happen again any time soon.

Baronsandwich

Why SGOV vs VMFXX? Just curious.

Lucky_Platypus341

Vanguard's VMFXX is a little higher (same as SPAXX) or SGOV eft (ultrashort treasuries), 30-day yield is currently 3.97% (3.93% avg yield to maturity). All fo these have the advantage of being able to withdraw/sell without penalty or risk at any time, and treasuries are not taxable by states (but you do pay federal tax). If you don't mind locking the funds up, then you MAY be able to goose the rate up a little and be guaranteed with a bank CD. Shop around. Max is just slightly higher than treasuries (around 4%) and interest is taxable by state, so unless you find a good deal it's probably not worth it.

LongDarkTeeTime

I have my cash in VMFXX that is yielding 4ish%. Why not something like that instead of TIPS ( or VTIP ETF)?

big_deal

HYSA, Money market, CD's, and Tbills are all considered "cash" accounts because they have zero risk of loss. They all pay very close to the prevailing risk free interest rate which historically has averaged about 1% above inflation. VMFXX is at around 4% yield because of the period of higher inflation in 2021-22. You can expect it to go down as inflation drops and monetary policy eases.

big_deal

SEP-IRA and Vanguard should not be important factors in your performance. What matters is what funds you are invested in. It sounds like you funded the IRA but never selected or allocated to an investment fund so it's just sitting in the default money market fund, VMFXX. Look at your investment options and transfer from "cash" (VMFXX) to a stock fund or a target date fund.

ditka

VMFXX is likely the "default" investment choice for your account You need to log in to your Vanguard account and change the investment fund for your existing $$ I don't know what your time horizon/age/risk tolerance is, so I can't advise you for *which* fund you should invest into. Perhaps something like VT or VTI. Or a balanced fund like VBIAX. https://www.reddit.com/r/Bogleheads/

Illisanct

HYSA are cash equivalent too. By your argument, you agree that VMFXX is a cash equivalent. Sidenote: it has a 4% yield *right now.* That has not always been the case, and it definitely won't always stay there.

0btuseMoose

The low return is due to the account not being invested. VMFXX (Vanguard Federal Money Market Fund) is the brokerage's settlement fund, a cash equivalent that acts as a temporary holding area for uninvested money. It preserves your money but is not a fund for long-term growth. To begin investing, you must initiate a trade within the SEP-IRA to purchase an asset like a stock or fund using the money currently held in VMFXX.

McKnuckle_Brewery

VMFXX is a money market fund, a cash equivalent. You did not invest your IRA contribution - *for five years* \- that's the problem.

CreamyBagelTime

It’s in VMFXX

CreamyBagelTime

It’s in VMFXX

happy_snowy_owl

I'll never cease to be amazed at questions like this... No, you should not leverage a HELOC to invest into a stock index. What you should do (and should have done) is treat your brokerage like your savings account with a mix of stocks, tax-advantaged intermediate bond funds, and short-term cash. Many people advocate percentages but I like to put the short-term reserves in terms of real dollars. So in your case, I'd be something like $20k into VMFXX, $60k into VTI, and $20k into VTEB. Adjust accordingly for your risk tolerance.

WillProbablyBeDelete

Yes, the cash is represented with VMFXX @ 21.7% of my portfolio. Currently earning 4% but it has been dropping consistently. You're right, it might be a little too aggressive to move nearly all of it to equities, it has just been stressful looking at the gain this year knowing I've missed out on $100k free money if I had that $400k invested. I guess maybe the play would be to look towards bonds for this money sitting in VMFXX if the yield keeps dropping? It's only barely keeping up with inflation at this point.

WillProbablyBeDelete

I've been sitting in 25% cash for a while now, waiting for opportunities that I never had the balls to capitalize on. Obviously I'm bummed to have missed this years gains, but it is what it is. With my current allocations in mind, where do you think I should deploy around $300,000 of the funds currently sitting in a money market fund? My world exposure is low, as is my total market compared to my SP500 exposure. I'm comfortable with my current crypto exposure and would not want to increase this (purchased this at $3000 so riding it out). Would you just split the funds between world and total market, or do you think there are better places to put some of this money considering my current allocations? VFIAX (SP500) - $1,091,000 - 54.5% VMFXX ($435,000) - 21.7% VTSAX ($246,847) - 12.3% Bitcoin ($120,000) - 6% VTWAX ($108.968) - 5.4% Some details that may be relevant. 36 years old, married, no kids, unstable job currently earning $600,000+ but could see a decent drop soon depending on how things go in my industry. 400k mortgage @ 2.4%. Spending roughly $150k this year, but about 50k of that is related to business expenses that wouldn't be there without our current job.

Im_Still_Here12

I have a corporate brokerage account with Vanguard that I keep cash reserves from our business in that are invested in VMFXX (money market fund). I also keep even more other cash reserves in my local commercial bank account that is also invested in their money market fund as well. Vanguard MMF pays more than my local bank MMF but I can move funds in my local bank MMF to my checking account same day. Vanguard takes 1+.

bobdevnul

You can buy Vanguard VUSXX and VMFXX money market funds at eTrade. Would those be marginable? As MMFs with a constant share value of $1 they would also avoid tax filing cap gain/loss reporting. They accrue dividend daily for the amount held on each day - you don't lose yield if you don't hold until the dividend payment. VUSXX dividends are all or mostly all state tax exempt. VMFXX dividends are typically partially state tax exempt.

SirLearning

Why do people want to choose SPAXX with expense ratio of 0.42 over vanguard VMFXX with expense ratio of 0.11?

fallingdowndizzyvr

> I'd like to make 5% or more while remaining completely liquid I'd like 100%. But what I like and what's reality are different things. You can expect around 4%. I have a few hundred thousand spread amongst SWVXX, VMFXX, VUSXX and SGOV. They are all pretty much the same but why have everything in the same basket.

spicystreetmeat

Vanguard’s settlement fund, VMFXX, is paying 4.05% currently. Not worth paying .3% for FDIC imo but that’s just me

AutomaticDiver5896

SGOV = ultra-short Treasury ETF; cash-like, minimal duration, not FDIC. Yield follows Fed; monthly payouts; low fee; mostly state-tax free; tiny price drift. Fidelity T-bill auto-roll and Vanguard VMFXX work for me; also considered [gainbridge.io](http://gainbridge.io) for multi-year fixed rates. Good for parking cash if you accept small NAV wiggles.

AutomaticDiver5896

For retirement, protect principal with a cash bucket and rules. I keep 2-3 years expenses in T-bill/CD ladders, rest in short-duration bonds and a broad index. I use Fidelity for T-bills, Vanguard VMFXX for cash; [gainbridge.io](http://gainbridge.io) for fixed annuities with multi-year guarantees. Guard principal, define your cash bucket.

ConcentrateOk523

VMFXX and Schwab money market

way2lazy4u

VMFXX

goodDayM

I actually thought VMFXX was the default place where your money would go. If you’re really unsure where your money is going, you should message vanguard.

PoorBobert

Oh okay. I saw that my VMFXX dividends would get reinvested (in my transaction history) so I assumed that they would go back to my initial VMFXX balance but my reinvestment distribution was set to none. Would that be the reason why my VMFXX balance hasn't changed?

goodDayM

Each month I see two transactions right next to each other: * VMFXX Dividend $X * VMFXX Reinvestment -$X I have dividend reinvestment turned on.

Nosemyfart

Here's an easy thing you can do. No buying of anything required. Just open a vanguard brokerage account. Then, place cash in it and don't invest it. Any uninvested cash in a vanguard account is automatically placed in VMFXX - their money market fund. That rate will be better than a HYSA. This is what my wife does with her cash.

biznessmen

Could use a set of eyes on where I should trim Starting to feel this market is well overheated. I thought about moving 25% of all my holdings into more VMFXX or enough to get tome to 60% VMFXX . I made a pie chart with all the holdings. Thoughts? https://imgur.com/a/T3tUc8E

biznessmen

Could use a set of eyes on where I should trim Starting to feel this market is well overheated. I thought about moving 25% of all my holdings into more VMFXX or enough to get tome to 60% VMFXX . I made a pie chart with all the holdings. Thoughts? https://imgur.com/a/T3tUc8E