VMFXX
Vanguard Federal Money Market Fund Investor Shares
Mentions (24Hr)
400.00% Today
Reddit Posts
Blow Up Risk of a Money Market Fund
Question about taxes on tbills vs money market funds
buy VMFXX after dip from jobs report?
I purchased VIPSX in 2017, this is how it has performed so far
What prevents dividend arbitrage with MFs like VMFXX?
Considering investing my HSA into a money market fund (VMFXX). Why would I not want to do this?
Vanguard Idle Cash/“Settlement Fund” Options
Vanguard Idle Cash/“Settlement Fund” Options
Vanguard Bond Holdings (e.g. VBTLX) versus holding in settlement fund (e.g. VMFXX)
Would it be worth putting money in my "safe" money in a Money Market ETF?
What is the difference between Vanguard's settlement fund and VMFXX?
VMSXX has now temporarily surpassed all MMFs for higher federal tax brackets.
PSA: You can max out your Roth IRA or other tax advantaged account immediately if you have excess cash you don't wish to invest in stocks
Why do CD, when you have better rates on the money market (VMFXX)
Money Market Fund (Euro or USD) available in the European Union?
Parking cash short term in money market funds?
5 Great Fixed-Income Funds to Buy for 2023.What do you think?
Vanguard's Settlement Fund or Treasury Bills?
Vanguard's e-mail contact to ask a KID's translation
If I hold money in Vanguard VMFXX for over a year do the issued dividends become qualified dividends?
Money Market vs. Cash? What's the difference? Also, what are current cash (and equiv) yields on Fidelity, Vanguard, Etrade, etc?
Money Market vs. Cash? What's the difference? Also, what are current cash (and equiv) yields on Fidelity, Vanguard, Etrade, etc?
Vanguard MMF (VMFXX) alternatives for non-resident
If you're on Fidelity, what's the best money market fund?
Why t-bill ladders with options like VMFXX and VUSB available?
U.S. Govt Obligations and Repurchase Agreements
Mentions
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/
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.
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.
VMFXX is a money market fund, a cash equivalent. You did not invest your IRA contribution - *for five years* \- that's the problem.
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.
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.
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.
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+.
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.
Why do people want to choose SPAXX with expense ratio of 0.42 over vanguard VMFXX with expense ratio of 0.11?
> 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.
Vanguard’s settlement fund, VMFXX, is paying 4.05% currently. Not worth paying .3% for FDIC imo but that’s just me
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.
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.
VMFXX and Schwab money market
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.
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?
Each month I see two transactions right next to each other: * VMFXX Dividend $X * VMFXX Reinvestment -$X I have dividend reinvestment turned on.
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.
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
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
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](https://imgur.com/a/T3tUc8E)
There's currently $7.5T in Money Market Funds. Interest is falling, dollar is weakening, and inflation is poised to increase all while equities and gold continue to hit ATHs. People can only keep money on the sidelines for so long before they capitulate. VMFXX was attractive at 4.5%+, but <4% feels pretty bad. Even people who are ignorant of forex are feeling the FOMO.
I looked at this first but it wasn't really helpful. In the account activity it just says: 3/31/25 VMFXX Vanguard Federal Money Market Fund (Settlement Fund) Dividend - $2.79 3/31/25 VMFXX Vanguard Federal Money Market Fund (Settlement Fund) Reinvestment - -$2.79 This was the during the month that I transferred the 2k into the account though and then purchased stock a week later when the hold was released. So I guess this was dividends on 2k I had in there for a week. Thanks again.
VMFXX is a money market fund. It pays income distributions. Income is calculated by how many days funds sit in it, and are paid out periodically. For VMFXX it pays monthly, which I believe is typical of money market funds.
Can someone help explain why my Vanguard Settlement fund which only has a couple bucks in it is creating taxable dividends? I have several accounts at Vanguard but my settlement fund VMFXX has $4.86 in it right now. I only transfer money into it when i am going to purchase other stocks and do not leave any substantial amount in it otherwise (beyond the mandatory waiting period). The small amount in it now was left over after my last purchase and it's just been sitting there. But somehow, its generated $2.79 in taxable dividends YTD. Its not a big deal to have a couple bucks more of taxable income but I would like to avoid it if possible and I do not understand what is causing it. Do I have to empty the settlement fund completely? It's got to be coming from somewhere else, right? Appreciate any insight you might have. Thanks.
I keep 2-3 years of expenses in cash (checking+VMFXX) and the rest of my portfolio is in VTSAX. Yes, it's really that simple. Read The Simple Path to Wealth by JL Collins and you can pretty much understand my investment philosophy since I stopped day trading in 2000. I really wish that book existed when I was a teenager. I had a paid off house that I built in my 20s and sold shortly after I hit my FI number because I hated home ownership. It was tough putting hundreds of thousands of dollars into VTSAX in 2019, but I'm really glad I did since the stock market crushed the returns that my house had over the past 6+ years. Time in the market.
Fund 7-Day SEC Yield Expense Ratio Tax Exemption (State) VMFXX 4.21% 0.11% Partial SPAXX 5.20% 0.42% Partial VUSXX 4.20% 0.07% Full FDLXX 5.00% 0.42% Partial
40% VOO 40% VTI 20% VMFXX. Have at it 🤷♂️ Is the irony of you resorting to ad hominem after complaining about the sub beig toxic lost on you? Lol
Keeping that $115k in equities like VDADX or VTSAX exposes you to market swings that could cut your down payment right when you need it. Moving the money into something like VUSXX or VMFXX is a much safer play, since those money market funds will preserve your capital and give you a modest yield while keeping it liquid. Your Roth IRA can stay invested in equities, since that’s for the long term and not tied to your house purchase. The key is to separate short-term money you’ll need soon from long-term money you won’t touch for decades. For a house in 2–3 years, safety beats chasing returns.
Here's the cheat code for a green portfolio: USA: VMFXX https://www.morningstar.com/funds/xnas/vmfxx/quote Europe: XEON https://www.morningstar.com/etfs/xetr/xeon/chart
Follow this general guide: [https://www.bogleheads.org/wiki/Prioritizing\_investments](https://www.bogleheads.org/wiki/Prioritizing_investments) Chase is 'probably' ok if you have the self-directed brokerage account and can resist their likely pitch to pay them to manage your money. Otherwise, the big three are good: Vanguard, Fidelity, or Schwab. Put funds that have to be safe and accessible in a few days in money market funds like VMFXX or if you are in a state with high taxes consider VUSXX for it's state tax exemption (if you report the dividends correctly). For long term investment, see the links on the sidebar over at r/Bogleheads for the reasons to use a low fee index fund that owns the 'whole market'. That would be VT or the equivalent 60/40 mix of VTI (US) and VXUS (international). These own 'everything' so other companies/sectors are redundant.
VMFXX - Just checked it's actually 4.22% so I over quote / remembered old rate. SGOV is 4.44%
Google AI : To directly purchase VMFXX as a separate mutual fund, a $3,000 minimum is needed. As the settlement fund within a Vanguard Brokerage Account, there's no minimum initial investment.
Google AI: To directly purchase VMFXX as a separate mutual fund, a $3,000 minimum is needed. As the settlement fund within a Vanguard Brokerage Account, there's no minimum initial investment.
I have vanguard but have not put any money in their cash plus acct, I keep all cash in their money market specifically VUSXX, you can also just put the cash in their brokerage acct settlement fund which is VMFXX. They both have a 7-day SEC yield of about 4.2% while the cash plus earns about 3.65%. Money markets are not FDIC insured but they are as safe as can be w/o FDIC especially VUSXX which is a US treasury money market fund. I have not used the cash plus acct so don’t know its nuances. Call vanguard.
VMFXX in the settlement account at Vanguard pays 4.2%.
I am 5% HYSA/ T Bills/ VMFXX, 5% short and intermediate bond ETF with remainder split between VTI and VXUS. I have a few individual stocks but that is more like gambling. I favor having 3-5 years of fixed expenses in fixed income. However I am not a fan of annuities as I want to keep up with COL
My bank's promo period for their "high yield" savings account has ended and I want to move the money somewhere it's earning more than 0.30%. I don't really want to open another bank account, so is there any reason I'd pick Vanguard's Cash+ over just having it in a settlement fund / VMFXX in my taxable account?
Is VMFXX effectively as safe as an FDIC savings account? Both are backed by the full faith and credit of the US government. The difference is that the FDIC account has a cap on it's insurance. Am I overthinking this?
Vanguard's default fund when you have money in your brokerage account, VMFXX is paying 4.22% rn. Easiest one to start using.
Holding cash for an expense in less than 1-2 years is best served in a HYSA or a Money Market Fund. You may like to check the MMF Yields tab of my [rebalance calculator](https://invest.mcawesome.org/). You can enter your tax rates at the top and it will calculate your after-tax yield. You will likely see a MMF that will beat your HYSA rate after taxes. How to do it? * Open a regular brokerage account at Fidelity, Vanguard, or Schwab * At Vanguard and Fidelity you can just transfer the money in and you're done if you like the default choice (VMFXX at Vanguard or SPAXX at Fidelity) * At Schwab, and if you want to use a non-default option at Vanguard or Fidelity, you buy into the fund; make sure you don't buy third-party mutual funds (i.e., any fund ending with XX should only be bought at the first-party brokerage) to avoid high transaction fees; the ETFs can be bought free at all of the brokerages * ETFs will not auto-liquidate at Fidelity (or anywhere else), so to use the cash you will need to sell and wait until it settles the next day before you can withdraw/transfer out My preference is Fidelity. When you use the default SPAXX money market fund for cash, or you buy into one of their other MMFs, they still auto-liquidate just like cash. You don't have to sell first. You can also enable cash features in the account to use it like a bank. Vanguard pays a little higher, but doesn't auto-liquidate except for the default VMFXX fund, doesn't have cash features, has worse customer service, and has a pretty terrible UI. Schwab has cash features and good customer service, but doesn't auto-liquidate MMFs and doesn't use one by default for cash (instead you get a very measley checking-like interest rate). If you are going to hold the cash for more than 1-2 years, but less than 5 years, you may be interested in target date bonds. These are listed in the Target Date Bonds tab of the same calculator listed above. These pay dividends every month or quarter (don't remember which), and they auto-liquidate back to cash at the end of the year for which the fund is named. For instance, if you wanted to use the cash in 2028, you would buy a 2027 target date fund, and at the end of 2027 it will auto-liquidate to cash. If you hold until maturity/liquidation, you will receive all of your principal back. If you sell before then, you could gain or lose principal, depending on the recent changes in the bond rates market. If you need the cash in over 5 years, especially if you're flexible on exactly when you want to use it, it's best to just invest it in broad market index funds like VT (or VTI+VXUS in a taxable account) to earn a long-term average of 10% per year.
If you're truly unsure of what to do, just keep it simple - open a vanguard brokerage account and transfer money to it. Then do nothing to that money. Vanguard puts all uninvested money into VMFXX, their money market fund and that is currently beating HYSA.
Holding cash for an expense in less than 1-2 years is best served in a HYSA or a Money Market Fund. You may like to check the MMF Yields tab of my [rebalance calculator](https://invest.mcawesome.org/). You can enter your tax rates at the top and it will calculate your after-tax yield. You will likely see a MMF that will beat your HYSA rate after taxes. How to do it? * Open a regular brokerage account at Fidelity, Vanguard, or Schwab * At Vanguard and Fidelity you can just transfer the money in and you're done if you like the default choice (VMFXX at Vanguard or SPAXX at Fidelity) * At Schwab, and if you want to use a non-default option at Vanguard or Schwab, you buy into the fund; make sure you don't buy third-party mutual funds (i.e., any fund ending with XX should only be bought at the first-party brokerage) to avoid high transaction fees; the ETFs can be bought free at all of the brokerages My preference is Fidelity. When you use the default SPAXX money market fund for cash, or you buy into one of their other MMFs, they still auto-liquidate just like cash. You don't have to sell first. You can also enable cash features in the account to use it like a bank. Vanguard pays a little higher, but doesn't auto-liquidate except for the default VMFXX fund, doesn't have cash features, has worse customer service, and has a pretty terrible UI. Schwab has cash features and good customer service, but doesn't auto-liquidate MMFs and doesn't use one by default for cash (instead you get a very measley checking-like interest rate). If you are going to hold the cash for more than 1-2 years, but less than 5 years, you may be interested in target date bonds. These are listed in the Target Date Bonds tab of the same calculator listed above. These pay dividends every month or quarter (don't remember which), and they auto-liquidate back to cash at the end of the year for which the fund is named. For instance, if you wanted to use the cash in 2028, you would buy a 2027 target date fund, and at the end of 2027 it will auto-liquidate to cash. If you hold until maturity/liquidation, you will receive all of your principal back. If you sell before then, you could gain or lose principal, depending on the recent changes in the bond rates market. If you need the cash in over 5 years, especially if you're flexible on exactly when you want to use it, it's best to just invest it in broad market index funds like VT (or VTI+VXUS in a taxable account) to earn a long-term average of 10% per year.
Hello, yes it's better yield than most HYSAs and the federal money market funds are payable by the same government that underwrites FDIC insurance, so it's just as safe. The default position at Vanguard is VMFXX, and the default position at Fidelity is SPAXX. These are used automatically by cash in the account and are both federal money market funds. Depending on your tax brackets, you may make more effectively after tax by investing specifically in different versions that have different tax treatments. See the MMF Yields tab of my [rebalance calculator](https://invest.mcawesome.org/). You can enter your tax brackets at the top and it will calculate the after tax yield for the most popular funds.
Why not SGOV or VMFXX instead and get 4.5% ??
VMFXX would be a better alternative. Nearly identical investments (government securities) but VMFXX earns a bit more because it charges lower fees. SPAXX is currently earning 3.95% with an expense ratio of 0.41%. VMFXX is earning 4.22% and only charging you 0.11%.
To answer your question, yes it really is that easy. I called the main line at Vanguard one morning with my laptop open in front of me. Calling early helps you get an associate who's bright and rested on the line, with no wait times. Vanguard is my platform of choice but you can do this with Schwab or Fidelity. Anyway I had the person help me go through the steps to open a brokerage and a Roth IRA. I held only as much as I needed for emergencies as liquid cash in the money market (VMFXX) and the rest went straight into low fee, no load index funds such as VTSAX. Nowhere to go but up from there! You are so fortunate to be discovering this at your current age!
Fidelity SPAXX 1 yr return = 4.31%, current 7 day return 3.99%, expenses 0.42% Vanguard VMFXX, 1 yr return = 4.68%, 7 day yield 4.21%, expenses 0.11% I say use Fidelity for investing in FNILX the Fidelity Zero Expense Fund All my money is at Vanguard. I have quite a bit in VMFXX
Did some quick math and you would need to invest $20k in SGOV to make $50 more per year than SPAXX. Another option is Vanguard cash account, you can set your core fund to be VUSXX or VMFXX which is a bit closer to SGOV. + pair with any credit card.
Why? VMFXX is bomb proof (or we have much bigger problems on our hands).
Make your sweep account VMFXX its yielding 4.22% right now. You add money it sits in there. You sell a stock it sits in there. Only downside is 2 days or so to get your money. Their high yield is a bit quicker.
Interesting, I'm currently holding a ton of money in VMFXX. Not sure if it is worth the risk of BOXX or not. Chance of audit, chance of the ETF issuer doing something incorrectly.
If you want that higher APY and also have money availability, look into money market funds on brokerages like Vanguard, Fidelity, and so forth. For example on Vanguard you can put money into VMFXX which has a 4.23% 7-day yield and can be available to you quickly. I think Vanguard even automatically has your settlement cash in VMFXX by default so it’s always earning. I use VUSXX for state tax purposes.
VTIVX = target retirement fund VTIAX = international stocks fund VMFXX = money market fund When the announcement first came out I sold all my target retirement fund, and put most of it in a money market fund and the rest in international stocks and bought the dip as best I could, buying back into my target retirement fund weekly ever since from the money market fund. I stand by that decision, if for no other reason than my mental health, but also international stocks have actually done amazing. That said, my target retirement account invests heavily in international stocks too and also did great and in hindsight rather than fuck around I should've just left my target retirement account alone. Which is to say (not surprisingly) just leave it alone. You don't know what this fucker is gonna do, and I probably cost myself $2k trying to make moves.
Only if you put it into SGOV or VMFXX .. they are equivalent of cash saving at 3.5% to 4.5% interest rates.
Hello, thank you for sharing your situation — first of all, I am sorry for the loss of your grandfather. It sounds like it left you on a very solid financial footing, and it's great that you're thinking long-term with money. Here are some ideas based on what you shared: ⸻ 🛡️ 1. Maintain flexibility (optionality) Since you plan to go back to school and might need that money to buy a house, you don't want to put it into something risky or something you can't easily withdraw. The simple fact that you are being cautious already puts you ahead of many people your age. ⸻ 🏡 2. If you need it in 3 to 5 years, the objective is to protect the capital, not to grow it too much Since you are thinking about using that money in the medium term, the most important thing is that it does not lose value. Some safe options: • High Yield Savings Account – super safe, and currently returns ~4–5% annually. • Treasury bonds or money market funds (for example VMFXX at Vanguard) – low risk, higher return than a bank. • Short-term bond ETFs – such as BIL or VGSH. They give a little more, but have some duration risk (interest). ⸻ 📊 3. Don't put everything in stocks with that money You already have good exposure to stocks (VOO, VUG, Nvidia, Apple), and that's great for the long term. But this inherited money should be treated differently, because if the market goes down just when you need that money, you could lose some of the value. ⸻ 🧾 4. Find out if that money has fiscal implications (taxes) It is worth confirming whether the inheritance is taxable. • If it comes from a regular investment account, you will probably receive what is called a “stepped-up basis,” which is very favorable. • If you are coming from an IRA or other tax-advantaged account, the rules change. It would be good to ask the executor or an accountant. It's worth it to stay calm. ⸻ 🎓 5. If you are going to study, save an emergency fund in cash If you're not going to work full time, it's a good idea to set aside 6 to 12 months of living expenses in a secure account (like a HYSA or money market). This gives you stability and prevents you from having to sell investments if there is volatility in the market. ⸻ ✅ Final thought: • You are in an excellent position: no debt, diversified portfolio and long-term mindset. • With that inherited money, the ideal is to prioritize security and flexibility. • Let your investments in VOO and VUG continue to grow in the long term, but protect short and medium term money from volatility.
Depends on when you will need the money. If it is many years out, visit r/Bogleheads and follow the sidebar links for investment advice. Maybe you should be bumping up your 401k contributions with the extra money. If it is nearby, stick to any of HYSAs, CDs, T-bills, or money market accounts and they are all going to float around the same rates. My go-to is VMFXX at Vanguard which has the advantage of being their settlement account and always available quickly. Or VUSXX is a similar fund that is all-treasuries and thus fully state tax exempt if you bother to report the dividends correctly instead of only partially like VMFXX. Or you can buy t-bills from the account with a little more trouble and have the income reported as state tax exempt interest in the first place.
I’ll look into moving some of it into VMFXX
The decision hinges on two variables you control: how soon you’ll need the down-payment and how much risk you’re willing to take in the meantime. If the house purchase is within the next one-to-three years, capital preservation normally matters more than chasing a few extra percentage points of return. A single 15 % drop in equities can wipe out several years of high-yield savings interest; by contrast, today’s top high-yield savings accounts are paying roughly 4 %–4.7 % annual yield, and that yield is virtually risk-free because deposits are FDIC-insured up to the usual limits.  You don’t actually have to leave Vanguard to get a comparable rate. Selling your stock positions and letting the proceeds sit in the settlement fund (Vanguard Federal Money Market, ticker VMFXX) would currently earn about a 4.2 % 7-day SEC yield, only a hair below the best online HYSAs.  Moving the cash to an external HYSA is therefore optional rather than mandatory—choose whichever platform is more convenient. Tax side-effects – When you sell the stocks you realize only the gain, not the whole $17 k. Long-term gains on assets held more than a year are taxed at 0 %, 15 % or 20 % federally, depending on total taxable income; in 2025 the 15 % bracket starts at about $48 k of taxable income for single filers and $96 k for married filing jointly.  – California treats long-term gains as ordinary income, so add your state bracket (potentially up to 13.3 %). – Any money-market or HYSA interest you earn afterward is also taxable as ordinary income each year. You won’t write a check immediately. Capital-gains tax on 2025 sales is due in April 2026, though you may owe estimated payments if the gain is large relative to your withholding. Vanguard will send you a 1099-B for the sale and a 1099-DIV for any money-market interest. Putting it together If the purchase date is close and you would lose sleep over another equity sell-off, locking in today’s gains and moving to cash-like instruments is the financially conservative move. The cost is whatever tax you owe on the gain plus the lost possibility—not the guarantee—of further market upside. If the house timeframe is still four or five years out and you are comfortable with volatility, keeping at least part of the portfolio in equities or a balanced fund could be reasonable. A practical compromise is to de-risk gradually: harvest enough gains to cover the down-payment you’ll need in the next 12–24 months and leave the rest invested until the date becomes clearer. You can also use short-term Treasury-bill ETFs or Vanguard’s Treasury money-market fund inside the brokerage account if you want zero default risk with a yield similar to HYSAs.
VMFXX until you decide north of 4% Doing some Vbil here myself for short term 4% plus interest
Sucks if you need liquidity. Like if you wanted buy during the April downturn. Happened to me. Fortunately I had funds in Vanguard too (VMFXX) that I could use immediately.
I do this with my business excess funds. I keep $100k in Vanguard VMFXX (MM fund) and then excess gets invested in Bogle style VTI/VXUS portfolio.
Topic: HYSA VS Vanguard’s MM account (VMFXX) Question: Understand some HYSA’s may have a slightly higher return and FDIC insurance (the latter seems like the kicker when comparing the two), but all things considered, how dumb am I to park $5,000-$10,000 in Vanguards MM fund as opposed to some of the other popular HYSAs?
Do you have a brokerage account with Chase? You'll need that for their MMF that offers 4% i believe. Can get the same from Fidelity (SPRXX) or Vanguard (VMFXX). Both are slightly above 4%. Ally and other banks offer HYSA also with varying rates. Any account can ACH transfer to other accounts.
The default Vanguard settlement fund is VMFXX, a federal money market mutual fund. Fidelity also uses a MMMF for settlement, SPAXX. Schwab does not use a MMMF as the settlement fund, so you would need to purchase a MMMF manually, like SNSXX.
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.
Look into money market funds such as Vanguard Money Market (VMFXX). They tend to pay slightly higher than most high yield savings accounts.
Appreciate the details about the default rates and risk. I was missing that. >What I have been doing is a money market for for Cash A mix of high yield stock dividend funds and loan obligations with a goal of about 10 separate funds. Like a mixture of VMFXX, SPYI/JEPI, and JAAA/CLOZ? Here is my updated scenario based on your info: name | old | new | change ----|---|---|------ SGOV | 50K | 40K | FLOT | 30K | 0K | dropped, underestimated JAAA's stability JAAA | 20K | 40K | CLOI | 20K | 0K | dropped, redundant JBBB | 10K | 0K | dropped, redundant CLOZ | 10K | 20K | SPYI | 0K | 40K | replaces some CLOs, tax efficient vs. JEPI/Q total | 140K | 140K | still 100K in fixed, now 40K in high-div. volatile stocks yield | 5.3% | 7.5% |
I don’t count my emergency savings in my investable assets. I park my emergency savings in VMFXX, and I have two brokerage accounts to keep the investing funds and emergency funds separated.
VTIAX, VMFXX, emergency fund in a HYSA.
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.
SGOV is a short term bond fund, not a money market fund. VMFXX is a MMF. Both make a reasonable substitute for a savings account. There are pros and cons to each. SGOV dividends are usually all or close to all state tax free. VMFXX has been \~50% state tax free. If you use VMFXX as your Vanguard settlement fund it is same day liquid to do an ACH transfer to someplace that you can spend it or use it to buy something else at Vanguard. SGOV settles one day after a sale so it takes 1-2 days before you can ACH transfer it out. The proceeds of SGOV can be used the day of the sale, but before settlement, to buy something else at Vanguard. But that triggers the first half of a good faith trading violation. You're ok as long as you don't sell what you bought with unsettled funds before the funds from the sale of SGOV settle. Recently SGOV yield has been less than VMFXX. SGOV being more state tax free may make the net/effective yield better than VMFXX depending on your state tax rate. VUSXX is a Vanguard Treasury bond MMF. Its yield recently has been as good or better than VMFXX. As a Treasury fund it has been all or nearly all state tax free. VUSXX can't be used as a settlement fund so it trades and transfers the same way as SGOV. Unless you have a huge amount of money in these the slight differences in yield doesn't amount to anything worth agonizing about optimizing. Pick one and get on with life.
SGOV is great, but it is an ETF which exposes it to some risks that VMFXX is not exposed to, at least in the same way. It also offers some potential benefits compared to VMFXX. Because it is bought and sold on the open market, SGOV’s market price can differ from the prices of its underlying securities. With VMFXX being a money market fund, this risk tends to be lower, because the trading happens by professionals at the end of the day and any loss of value would be a significant event for the fund. The benefit of SGOV is flexibility to sell it and buy another security intraday in your brokerage account. This can be useful, and many people are willing to deal with the small amount of risk associated with the ETF vehicle to have that ability. Money market funds do often have auto-liquidation features, so that benefit might not be relevant depending on the brokerage you use. Another benefit of SGOV is that it is transferable between brokerage accounts, if you ever moved to another brokerage firm.
VUSXX is pretty much the same yield as VMFXX but has the state income tax advantage as well.
Look at VUSXX. Same yield as VMFXX but since it's treasuries, more of the dividends are not subject to state income tax.
SGOV is an ETF made up of short-term U.S. Treasuries, so it’s about as safe and liquid as it gets, and it has the added benefit of being exempt from state and local taxes—huge if you’re in a high-tax state. VMFXX, on the other hand, is a traditional money market fund that often yields slightly more than SGOV but doesn’t offer the same tax benefits. It’s also very liquid and reliable, especially if you’re already using Vanguard’s platform. The tradeoff is really tax efficiency versus slightly higher yield. If you’re in a high-tax state or want simplicity in a brokerage account, SGOV is likely the better fit. If you just want to maximize yield and are in a low- or no-income-tax state, VMFXX might edge it out.
While you are wading through all of this conflicting advice you may want to consider putting it in VMFXX Vanguard Federal Money Market Fund. Currently earning 4.2% and about as safe as it gets, meaning you will not lose money. Now you can figure it out while earning $18k per year.
I have no problem getting money from Vanguard out of VMFXX. Current compound yield = 4.31% 7 day yield = 4.23% In 2024, it paid over 5% the entire year.
90+% cash in Vanguard VUSXX and the rest in the holding amount (VMFXX)
I sold half the Roth IRA this afternoon and moved it to VMFXX. I don't think the Fed can make a rate cut for a little while. If chaos ensues I think it happens very quickly and hopefully I can shift before I am losing money to inflation
depends on how close you are to retirement. Almost certainly no. plus, if you think through your thought experiment and there's an economic contraction, fed will cut rates and VMFXX will yield nothing.
Was holding almost 40% cash in VMFXX, still earning 4.3%. Bought gold on libration day up 10% as well as BRK-B … correction yesterday but it will do fine. Cash now around 25% …
Should I move my Roth IRA funds from my target date retirement fund into VMFXX? I'm highly bearish currently due to Trump stupidity. I need someone to reality check me. I feel like the tariff impact has not really even been seen yet and we are where we started before "liberation day". My Hope was to move my Roth IRA into vmfxx and capitalize on the steady 4% return (for now). Some gut check me.
It's all about the expense ratios the funds charge. VMFXX is 0.11%, SPAXX is 0.42%. Fidelity's ER really eats into the their MMFs yield.
They don't refer to it as a sweep, but in the transactions list it will show Sweep In and Sweep out. It appears that they have an invisible sweep account where things go before landing in or out of the settlement holding - typically VMFXX. It doesn't really matter. Deposits and share sales go to the settlement MMF. Purchases and withdrawals come from the settlement MMF.
\>(VMFXX). If you click here, you see the yield is 4.23% (minus 0.11% fee, is 4.12%). The quoted yield includes the expense ratio. Subtracting the ER to get the net yield is incorrect. The quoted yield is the net yield.
VMFXX has a 0.11% expense ratio and currently 4.27% 7 day yield, for anyone wondering.
That's a smart move! Both VMFXX and SWVXX are solid options for investing your home down payment money. Good luck with your investment journey!
It’s absolutely what I’ve been doing. I looked at tons of other options, but VMFXX still seemed like the best idea to me.
I realized some long-term capital gains and am feeling rather bearish with all the tariffs going on. I realized John Bogle would strike me down, but I'd like to sit in a safer more liquid position while I wait a couple months. To my understanding the settlement fund tracks the three-month t Bill rate. Is there any reason I shouldn't just wait hin VMFXX? Or do you have any other suggestions for sitting on ~45% of my portfolio?
If you want to buy in the next two years, VUSXX is great. It has better tax advantages than the cash sweep fund in a Vanguard brokerage account (VMFXX). Last year VUSXX dividends were 100% exempt from state tax.
1. Their cash plus sucks. Just put the cash into their normal settlement account. It's designed to sweep into their money market fund nightly (VMFXX). That's paying 4.12% now, which is some of the highest rates. 2. When you say 'best' fund, do you mean a long term investment? Or a shorter term investment for your house? If longer, can't go wrong with VOO/VTI/VT. Pick one and stick with it. If shorter, again, I'd recommend their money market auto-sweep. You don't even have to think about it!
Sure: https://investor.vanguard.com/investment-products/vanguard-cash-deposit They offer two different 'settlement funds'. One is their (rather lame) cash plus account, but it does have FDIC. The other (the standard one) is the Vanguard Federal Money Market Fund (VMFXX). If you click here, you see the yield is 4.23% (minus 0.11% fee, is 4.12%). https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx#undefined I know it works because my cash is swept whenever I transfer it over. When I buy anything, it buys the security, then sweeps out the amount needed to cover the buy the next day. So 'worst case' my emergency cash sits there earning 4.12%. I also see the interest payment hit every month end(like I did today! Woohoo!)