Vanguard Cash Plus Account Compared To The Best Alternatives
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- Опубликовано: 18 янв 2024
- Vanguard recently launched an FDIC-insured account called the Vanguard Cash Plus Account. We'll review this new account, compare it to other FDIC-insured options, and compare it to money market accounts.
Resources Mentioned in the Video:
Vanguard Cash Plus Account: investor.vanguard.com/account...
Vanguard Money Market Accounts: investor.vanguard.com/investm...
Fidelity Money Market Accounts: fundresearch.fidelity.com/mut...
Betterment Cash Account: go.robberger.com/betterment-c...
Wealthfront Cash Account: go.doughroller.net/wealthfron...
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Savings Accounts: www.doughroller.net/banking/h...
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ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (amzn.to/3by10EE)
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Thank you Rob! You reassured us in our decision to use the Vanguard Money Market fund thanks to this video!
Rob- as always, appreciate the great content!!
Thanks, this is timely. With ibonds and vanguard and apple there are a lot of easy ways to dip your toe in the shallow end. Your video helps a newbie like me fit these options into a wider context.
Thanks, Rob! First-time listener! I love Vanguard and I have been with them since the mid 80s. It is very hard to beat their management fees.
I’m late to the Vanguard fan club (although my current employer’s plan is there), but I’m now looking to move my other funds there too. The fees elsewhere really aren’t crushing the market with better returns. It’s hard to justify their fees.
Thanks Rob - I hadn't heard of this account. Great rundown of the myriad options for cash. 👏👏
Thanks for all you do Rob! Very helpful.
Whoa, that's good to know that they put your money into other bank accounts. I did not know this. THANK YOU for creating this video. I didn't realize all the terms either or about looking specifically for Federal Money Market Fund. So good to know. Such a good video. So glad I watched this!!
Appreciate the excellent content. Great review of these sweeps and risks.
I opened one of these accounts about 2 months ago. I had a Wells Fargo Savings account that paid 0.01%. Transferred the balance from WF to Vanguard. It fits in well with my other Vanguard accounts. Thanks for the video.
Did the same but moved to Schwab!
This is a classic Rob video. The reason I love this channel
Thank you for the information. Most definitely going to research these options.
Another option is if you are doing sweeps , something like DCA is to keep in the Brokerage account which by default will sit in VMFXX and do your sweeps from when buying ETFs of Mutual Funds if you are using Vanguard. I noticed this option is available for Regular accounts as well as IRAs. Not enough people are talking about this and I find it very useful. I thought thats where you were going in this video. Thanks again for the information keep up the good work sir.
Yes that’s exactly the way we do it.
VMFXX is a mutual fund, although money a market fund. I don't think a mutual fund is FDIC insured.
@@unebonnevie good point
@@FrankBurgos I think it is insured by SPIC
Thanks for the learnin Rob!
Thanks for another great video. Interesting footnote about one been required to check on accounts for FDIC not that i have that much but good to know
Very timely video, I was looking for a good place to park some cash when the notice popped up for your video. Thanks
I was in the process on making some investment decisions and came across this video. Since I use Vanguard, this was excellent advice. Thank you…
Helpful information. Thanks!
Hi Rob, unrealted to this paricular video but will you continue the New Retirement overviews? Thanks for your expertise and time. I'm continuing to learn.
Great information. Thanks for your help
Rob, every one of your video's is informative and helpful. Thank you so much for sharing with us - I've learned something new from every video and greatly value and appreciate the time you "invest" :). Do you have a video that explains what the better "Location" options are, meaning, where is it best to invest bonds, stocks, (Roth? Brokerage? IRA?)?
Thanks, Rob. I am just in the process of restructuring about 2.5M in cash and this info was exactly what I needed.
Thanks for the nice summary
Very knowledgeable tips. Thanks
Thank you. Good Presentation
Good segment, Rob. For the most part, I'm a very happy Vanguard client, for both my Roth IRA and brokerage account customer..and yes, I have their cash-mgt account, for some of my liquid holdings. However..one thing that I find incredibly FRUSTRATING, is that they will not do Federal (or State) tax backup-witholding. Without going into the specifics of my personal situation..this makes things needlessly complex for me, at tax time! I VERY MUCH, wish they would change their stance on that!
Interesting I will have to read up more on this
Long time vanguard user myself
Thanks Rob. I think there also could be tax differences between savings and money market alternatives. Savings as Ordinary Income and Money Market as dividends depending on how that may play out for each person.
I use VUSXX at Vanguard, FDLXX at Fidelity, and SNSXX at Schwab because much of the income is exempt from state income taxes - a second big advantage over the Vanguard savings account. Also note that the published yields are inclusive of expense ratios, and Vanguard’s considerably lower ERs is the main reason why Vanguards money market rates are better than Fidelity’s.
Hello, I'm very new to these sorts of accounts, and I was wondering -- if the expense ratio of Vanguard's account is so much lower, then why bother with Fidelity? I opened a cash management account with Fidelity and "invested" in FDLXX (for state tax exemption), but I guess I am "regretting" it, since I see that Vanguard has a much higher APY for VUSXX. I guess Fidelity's CMA is a checking account that I am treating like a savings account, but other than the debit card etc that Fidelity's CMA offers, are there any other advantages that the CMA has that Vanguard's Cash Plus Account doesn't have?
@@nashs.4206 I use a Fidelity brokerage account as my everyday checking account, so that’s why I use FDLXX. Vanguard, as far as I’m aware, does not have a genuine full checking account option. If I have other cash, I would either buy Treasury bills at Fidelity or hold the cash at Vanguard (in VUSXX or another govt MMF). Either of those would produce a better yield than FDLXX. None of this matters with small amounts, however.
@@nashs.4206 You can buy pretty much any investment in the Fidelity CMA. You could probably do VUSXX but I haven't checked. You can probably link the Fidelity credit card which has good cashback options. You can buy treasury bills, notes and bonds. You can buy brokered CDs.
I think that Fidelity allows you to keep most of your money in the MMF, and funds will sweep into the checking account if needed, but Vanguard doesn’t have anything close to that flexibility. I am thinking of opening a CMA at Fidelity. So if I am wrong, I would like to know!
@@24601jvj I do that at fidelity.
Hey Rob! Not sure where to ask you questions, so I'll just do here since it's your latest video. 8-) I'm wondering why one would not just replace (at least some of) the bonds in a stock/bond portfolio with a MYGA or CD or TIPS (or combination of these for diversification)? Seems those investment vehicles have more predictable/stable returns than bonds. What am I missing here? Thanks!
Hi Rob. Thanks for the video. Is there a reason Raisin did not make your list?
I've been watching myself Rob. Still holding in the money market fund. When should I move to treasuries? I'm gonna hold a little bit longer and I'll be tuned to your channel to see what you are saying. Thanks for sharing!
Nice video Rob!
Great content, always! Many thanks. With the Vanguard cash plus account or others, is the rate fluid or does it stay locked in at the level when you put in your money?
Fluid
Hi Rob, I watch you alot. Good information, Here's what is not clear to me. I currently am using aVanguard Cash Deposit Account (interest rate 3.7%) inside my Roth IRA account. Would I be able to convert that to a Cash Plus Account and use it as my investment sweep acount instead of what I am currently using thereby gtting 4.7% instead of 3.7% ?
I assume the attraction of a cash plus account are the bank like features such as bill pay, direct deposit, etc. Comparing the apy to other options is one way to assess but shouldn’t you also compare features and capabilities?
I use this account as my FDIC savings account because of the convenience of already having all my investments and money market funds with Vanguard. The small increase benefits I could gain going somewhere else aren’t worth the hassle for me
Don't put all your eggs in one basket. What if online security is jeopardize, and the thief have access to your vanguard account. The thief could quickly wire transfer all your money, and you left with nothing.💰
@@marcopolo3109if it’s that easy why bother with any of these accounts
Agree the Vanguard US Treas MMkt Acct is good for many reasons ... for those of us in Taxifornia, it is exempt from Uncle Gavin's state taxes & still pays 5.29% ... effectively raising the true yield a touch higher.
Rob liking your videos
1 question I have as I have VSAXX, GSY, GBIL, NEAR and Robinhood 5% on sweep account
I am assuming these are all ditros treated as interest and irdinary income
Is there a good 5% option that will be treated as qualified dividends/cap gains??
Thanks again
I have another Q or 2 that I will save for later
I'm getting 5.30% with American First Credit Union through Raisin. Moving money in and out is painless. I learned about Raisin from one of your videos. I always learn a lot from you. Thanks again.
how this works? Do you need to have opened account in both, Raisin and bank? Do they pay monthly?
@@user00165 No, you just open an account with Raisin. Everything else is handled by them invisibly. Makes it very convenient to chase after savings account yield.
I have been using Vanguards Fed MM instead of Bonds
I had an Ally savings and it was ok. I'm going to try this because it has bill pay so I can keep the money I have in my checking and my savings in this account and gain interest on both.
The smart phone login account *only* is questionable! When SHTF, do you think your phones would work?
Thanks, Rob. New follower. I have a question if any brokerage money market accounts that pay + or - 5% that tax wise is treated as capital gain rather than taxed as income? I have a large IRS credit against future capital gains from investments that I'd like to use with money market etfs if applicable. Thanks
Is there any advantage of buying a Vangaurd federal money market fund (like VMFXX) inside this cash account rather than a standard brokerage account or just a settlement fund for that matter?? Thanks
You never talked about it he account it self can you get bills paid from it or direct deposit?
Any safe funds that you could recommend that would yeild 6% or more a year? Any information would be appreciated.
Great show, as always Rob. Is this new Vanguard account open to all? I have been a Vanguard customer for 30 yrs, and have attempted to park cash in this new cash plus account since July of 2023 (for FDIC peace of mind) but the Vanguard site tells me it is not open to me. - yet. Is it now, finally, open to other than invitees?
Yes
My AmEx FDIC insured savings account is paying 5.05% as of January 26, 2023. But my SWVXX money market account currently has a 7 Day average return of around. 5.2%.
Love this account
Question-can you rollover pretax savings to a Vanguard cash plus account or will you need to pay taxes on the move? Thank You
I want it, I just don't see how you get it. Does it work for a brokerage account? Good topic. Reading the PDF on the Vanguard site it doesn't sound like this replaces your "sweep" account, it simply sounds like an FDIC savings account.
What would be your best 5 etfs for a beginner
Here are the options in no particular order: 1) VOO 2) QQQM 3) SCHG/VUG 4) VTI 5) SCHD/DGRO. Personally I put down 1.3m$ on few ETFs, still diversifying. it was this time last year I made my first million with a liquid 200k. Invested it in a trader here in CA, I get weekly pay out which I invest back on long term ETF's. Google will be a huge buy for me when the market bottoms.
In no order: 1) VOO 2) QQQM 3) SCHG/VUG 4) VTI 5) SCHD/DGRO. Personally I put down 1.3m$ on few ETFs, still diversifying. it was this time last year I made my first million with a liquid 200k. Invested it in a trader here in CA, I get weekly pay out which I invest back on long term ETF's. Google will be a huge buy for me when the market bottoms.
Thx Rob, you can also add Ally bank at 5.5%
Not true
I use CIT - but I have a question: The CIT rep said I'm covered for 250k for me AND each of the beneficiaries I have listed. She said I am covered to 750k. is this true? do listed beneficiaries increase coverage?
April 1, 2022, Empower officially acquired the full-service retirement business of Prudential. I remember their fees were high
I'm keeping it simple as I inch toward retirement by buying 2 Year Floating Rate Treasury Notes. Harness the power of "higher for longer".
Im the president of an HOA, and our treasurer has been searching for an fdic high yield account that can be opened in an the name of an HOA which is a C corp. Does anyone know if any of these accts mentioned(or any not mentioned) will allow titling to an HOA?
Hi Rob, money market accounts are not FDIC but they are SIPC right?
Something a little confusing on the Vanguard site: on the VMFXX it says YTD returns 1.26% and next to it it says Compound yield 5.41%. So the fund is going to return 1.26 or 5.41?
Rob can you revisit your Vanguard Robo advisor account in 2024 and give your opinion Thanks
What do you think about a municipal money market account for high income earners who can benefit from a better tax adjusted return?
Aren't treasury mutual funds and money market funds SIPC insured?
Is there an easy way to see how often these accounts change their APY rates? I wonder if some of these are teasers and will knock you back down to 4% range after a month or 2.
What the big print giveth the small print, in the footnotes, taketh away.
My first boss at my first "real" job taught me that! That was before law school, where I leaned to write in small print :)
not always...the footnotes are often times where the meat is.
Question. If you are 50 with $4 million invested having 50% in etfs based on broad indexes (Dow, Spy, Nasdaq) and 50% money market. Is this $ enough to retire? I rent a 2 bedroom apartment, no debt, no kids. I also ask because I have slight back pain sitting at PC 8 hours a day. I wonder how long I can endure it. I anticipate 6% returns but the past 30 years seem like a rosey picture. Thanks.
I retired last year at 58 yrs old, and I've been doing the CD ladder for managing my cash bucket. I have a rep at Chase bank who manages the $190k ladder, so it's been an easy process. However I am seriously considering moving the cash over to Vanguard and open a Cash Plus account once each of the current CD's mature.
Do Chase pressure clients to get into other accounts like private bank, or sapphire checking account if you have a higher balance with the bank?
Does Chase have "wealth managers"?
hope you aren't paying the rep at Chase to mangae CD ladders. That is just crazy. They require no management other than knowing when the CD matures.
I hate Chase.Their rates suck.If there is a problem you will definitely get screwed. Look up 'Chase Sucks' to read horror stories.
With these types of products, are the typical bond products even relevant anymore? Guaranteed 4.7+ sure is better than maybe bonds.
What do you think of BOXX etf?
Helpful information. Can't you just set the sweep account to go to Vanguard federal money market paying 5.29% in your video, rather than the 4.7% of Vanguard Cash plus default investment?
Yes, the VMFXX is the holding or sweep account paying over 5%. I pay my bills separately so no need for the Cash Plus Account.
to keep things streamlined. if i already have fidelity accounts, does keep my cash position as SPAXX accrue the same interest? Im guessing it isnt as liquid as a hysa
I currently use fidelity and it is indistinguishable from my experience with my local credit union. Very easy to get to if I need it. They gave me a debit card and everything.
As of 1/19/2024 SPAXX 7 day yield is 4.98%. I am keeping my short term cash in SPAXX but snagging a slightly higher return with shorter duration T-Bills.
I have some cash that I will need in the 2-3 year range so have been adding 2 and 3 year Treasury notes to mature when I need the cash. This will look like a great choice if interest rates drop significantly in the next couple of years and not completely suck if rates stay the same or even go higher.
Money market *accounts* ARE FDIC insured. Money market *funds* (as in, "mutual funds"), are not. The terms are not interchangeable.
MMAs are just FDIC insured bank account products. MMFs are mutual funds like VMFXX etc.
Correct. If I used the term MMA in the video, I meant MMF, and that's the type of accounts we looked it.
@rob_berger yes haha just wanted to mention it because you say MMA the whole video up until the very end when you switch to MMF. Could confuse some people. Cheers.
Also i noticed you just called them accounts again in your reply. MMFs are not accounts. They are funds held within a brokerage account.
@@user-cf1tm6fx4w oooh, LAWYERED! 🎤💧🤣I was gonna say the same. Technically, the FDIC insured ones are Money Market Deposit Accounts (MMDA).
What is the risk with SWVXX in 2024? Should switch SWVXX TO CD?
Which brokerage and portfolio do you recommend for a 30 year old ? Thanks!
What are you saving for? Retirement? Rob would recommend Vanguard, Fidelity, or Schwab. And he’d tell you to put it in a 3 fund portfolio with an allocation that fits your investment timeline and risk tolerance. Others would tell you to put it all in the S&P500. You can’t really go wrong as long as it’s a low cost broad market index. Personally I use Schwab and I’m in a passive target date fund set 15 years past my actual retirement date so I can chase the more aggressive returns.
What will happen to these suggestions when interest rates go down?
I’m about to sell my house and need a place to put the proceeds for 12-18 months before I buy a new home. Outside possibility I won’t buy another home for about 3 years. Should be around $400,000 and I can’t afford any risk to the money. Would either the cash plus account or money market funds be appropriate for this? Or would you recommend something else entirely in this situation?
I'm not a financial advisor, just a normal person- If you can't take any risk, then go with a high-yield savings program (e.g., Vanguard's Cash Plus Bank Sweep), as they offer FDIC coverage. Money Market Funds are not FDIC insured since they are an investment, but as mentioned in the video, their risk is apparently low.
With holding $400K for potentially three years, I would probably not go with Vanguard Cash Plus and would look elsewhere that offers a higher APY. Hope that helps.
1. For all intents and purposes, FDIC insurance is pointless in the discussion between savings vs money market funds.
2. For money market, Vanguard's VUSXX has been and is available for no cost at ETrade and Vanguard.
3. The best MMF at Schwab was only paying 4.7% so I moved my cash into JAAA that's close to AAA Corporate bonds in terms of risk but offers about 6% with no duration risk as it's all floating rate loans.
The Schwab MMfund SWVXX is payng about 5.25
@@eikoGoldstein ...but it has a giant .34% fee....so the net brings it down below 5%.
@@JohnDoe-xr5is thank you. every penny counts!
@@JohnDoe-xr5is Fees are already deducted in 5.25% return
Exactly..the expense ratio on Schwab non-FDIC insured mm accounts, is ridiclous..and their yield on their FDIC insured MM account, is LAUGHABLE. Unfortunately..I'm stuck with them, as my custodian in my self-directed 401K/457, for the time being..Schwab, CLEARLY does not like clients to be anything other than fully-invested, in non-cash, at ALL TIMES..regardlessof what the CLIENT'S wishes are. Pretty bad corporate mentality. No wonder, their stock-price, is in the TOLIET. People are getting wise, to their thuggish practices! @@JohnDoe-xr5is
We need more of this knowledge, young people know more about crypto
while they park their money in big bank savings accounts.
Why pay an expense ratio on a money market account when your local savings institution may have competitive rates to use your money for local projects? You have to factor in your cost when comparing rates.
I'm watching the screen that says 4.75% APY while you repeatedly said 5.75% on marker 2:57 and again at 3:14. What am I missing?
I was wondering the exact same thing
Any experience with SOFI Bank Rob? Pretty robust platform for a non brick and mortar bank. Thoughts appreciated.
No personal experience, but they have solid cash accounts as well.
for being a FINTECH company, SOFI's user interface (UI) stinks. I seem to be an idiot when I tried to figure out how to trade and find things like documents. I own lots of SOFI stock, but I have to admit I hate the UI.
i’ve moved all my cash/investments (besides a small amount in a brick and mortar as back up) and i’m EXTREMELY pleased. i personally have found the dashboards, income/cost tracking, transferring between accounts to be seamless. great customer service as well
Stay away from SOFI they are not doing well
Good video, Sir 👍
I wish you had calculated the impacts of the expense ratios when showing the money market funds. It seems like the straight APY comparisons don't tell the complete story.
The yields already account for expenses
SEC Rule 2a-7 has very strict rules for money market funds. The chances that any would “break the buck” is extremely low. Unless the government security MMF is very close to the corporate MMF, I don’t think it is worth giving up the yield difference.
Fidelity is paying 4.96% on their money market today. Someone below claims that Schwab pays even more. Not FDIC insured but almost every money planner I have ever listened to says it makes no difference. Is there a reason why Vanguard is paying almost 5% less than Fidelity?
You totally missed the point. Ach transactions are allowed. I can earn interest on the money I use to pay bills. What other high yeild account does that?
You don't mention the ability to have direct deposits and auto drafts for bill pay that you do not have with a mm fund
I know zero about investing but I just inherited 85k (thank you Dad!) I don't need the money, I want it for the future. Where would you put it? A friend said to buy treasury bonds because you don't pay state tax (I live in Ca.). I am unsure how to do this or if there is a smarter option.
1) set aside 3 months living expenses (emergency fund), put this into a brokerage account (Fidelity/Charles Schwab/Vanguard/Merril Edge etc) buy shares of etf USFR, it holds us treasuries (8 week floating rate tbills) for you and currently paying 5.42%, u don't ever need to worry about FDIC insurance etc as it holds US treasuries, never keep money that you don't need in 98% of the wallstreet money managers/fund managers over time, good Luck :)
What are your goals for investing? Is it retirement or short term? If short term you’re fine to park it in the account Rob just mentioned, or one of the many lucrative HYSA’s out there. Interest rates will remain high for at least a few more months. If for retirement, I’d recommend a target date fund if you know little about investing. You could max out your Roth IRA for 2023 and 2024 right now, and not worry about taxes. Schwab and Vanguard and I’m sure others have low cost target date funds, just make sure you’ve got an expense ratio under .10% and not an actively managed fund
If you don't need it, and don't know what to do with it, throw it the highest rate CD you can find and try to formulate a plan. Worst case scenario you are up 5%. If you made a plan, go for it. Still unsure, renew the CD. They can't tax more than you earned.
I don't think I have to worry about it being taxed because it is inherited cash. And from what little I understand anything under $12 million is not taxed. I was thinking of only using it as an emergency fund or for retirement 15 years from now.
Thank you for your response!@@TonyCox1351
You might want to short term put it in treasuries while there still paying the high rates and you pay less taxes if your younger you can then have it available to bye some stock buying on the dips
I use my cash plus account to pay an auto loan since there's a routing and account number. Was going to buy car in cash but at 0.9% loan, i now pocket almost 4%.
Isn’t the below market rate on the car loan somehow wrapped into a higher price for the car?
@@Stashmo on some deals, probably. After 6 months of research and watching tons of CarEdge videos, I knew what a good deal was on buying a new Accord (with no dealer add-ons).
Plus, many dealers will give you an incentive if you finance through them, because for low credit buyers, they make a lot of money on the high interest rate.
@@dustindodge5974 a good deal is whatever you end up (willingly) paying for the car. all the other crap CarEdge and people put out there is rather meaningless.
That 4.7% at Vanguard was at a certain date in 2023 but what I'd it now in 2024 getting 2/3 thru January.
Still 4.7%.
For me, I believe retirees who struggle to meet their basic needs are the ones who could not a lot of things. My Husband and I both spent same number of years in the civil service, he invested through a wealth manager and myself through the 401k.accumulate enough money during their active years to meet their needs. Retirement choices determine We both still earning after our retirement...
2023 is the only year VMFXX has offered a yield above 2.53%. Why suggest this as a better option?
FDIC insurance if that is important to you.
VMFXX is not restricted like CDs. It is available to withdraw immediately (takes about 2 days). And in the current environment VMFXX likely will continue to have one of the best yields.
@@TomC-fo5gx thank you. You just prompted me to take another look
Where is a good place to put your 401k when you retire? I would like to get out of high risk and put it in minimal or no risk account
Index funds
@@GoKU-xx2vg Thanks
Should we be concerned if the funds are deemed to be held in one of the states with an Estate or Inheritance Tax? I want my heirs to receive ALL of my holdings (which are below the Federal Estate Tax Exclusion amount). I looked at Pennsylvania's Inheritance tax law because I was offered 4.65% APY by PNC Bank in a high yield savings (online) account. I live out west, but the way I read the law, Pennsylvania would be able to tax any amount a beneficiary received from this account upon my death. This is not often spoken about, but it should be.
1.25m? Lemme guess - cash sweeps?
Is that a ROM comic book behind you???
Raisin has 5.3%.
Could you please tell me IF Vanguard collapses or goes bankrupt, what happens to my investment???
Will I recoup all my money in both portfolios and VMFXX ??
THANK YOU for your explanation and expertise 🙏🙏🙏
From Vanguard’s site -
Vanguard (the company) is actually owned by the Vanguard mutual funds and ETFs.**
Each fund also owns the individual securities (stocks and bonds, for example) that make up the fund, and there's no way for a fund to go bankrupt unless every security simultaneously loses all value (an event that would reach far beyond Vanguard if it were to occur).
The securities that underlie the funds are held by a custodian, not by Vanguard. Vanguard is paid by the funds to provide administration and other services. If Vanguard ever did go bankrupt, the funds would not be affected and would simply hire another firm to provide these services.
@@readyplayer2 thank you so much for this important information. Have a lovely day 🙏
I don’t like how it won’t let you auto invest
The Vanguard VMFXX 5.16% (5.27 - 0.11 Expense Ratio) putting my 4.35% Ally Savings to shame, I might want to move my emergency fund cash
I'm almost positive that the .11 is already taken out. The yield is net of the expense making the Vanguards money market funds that much better!
@@bobb4496 yes thanks, i've been reading that as well now. Learned something new. Thanks
@bobb4496 I talked to someone over the phone at vanguard it's actually taken out after so 5.16% is correct.
@@bobb4496Yes, that’s in the fine print somewhere on the Vanguard website. VMFXX is really exceptional.
Fidelity cash management has one killer fieature. You can put all your money in a fidelity money market fund and fidelity will autoliquidate the shares from the MM fund to pay any transaction. You should never put your money in FDIC insured cash and put it in a proper money market fund. Fidelity CM is unbeatable in its features.
@malaybasu961 - Pretty keen on opening a CMA account myself, do you just automatically convert all your pay check to the Fidelity MMF and pay all your bills, the one MM fund I was interested in holding was FDRXX, does that also auto-liquidate, since its a Money Market Fund?
@@rrcmha for automatic investment in mm fund it needs to be a core. You might want to use a brokerage account for that. CM accounts are basically brokerage account with core being FDIC sweep. The only advantage CM account has over a brokerage account is that ATM fees are reimbursed for debit card used in a CM fund. I buy MM fund manually. It has not been an issue for me. Almost all fidelity MM funds are auto liquidated.
Depending on how much money you have at Fidelity, there are other MM funds available. FMPXX has a 5.3% 7 day yield as of today.
We had our retirement accounts in all cash. Went to Fidelity and the agent said we should put our money to work. His people in Boston said the market would continue to run. In a very short while, we were down 70K. Once again, “Where are the customer’s yachts?”
@@tomlee4841 The stock market fluctuates, but over time has increased. Diversification in both cash / bonds and stocks in a ratio that lets you sleep at night is a good choice for most.
Where is the best place to buy a 3mo or 6mo T bill on my own instead of through my financial planner charging me 1% on funds he manages?
Open a treasury direct account, buy straight from the government auction
@@SP-wg5pn that isn't necessary. You get the same auction rate from your brokerage as you do from treasury direct.
Treasury Direct is handy especially if you want to purchase in smaller amounts, ex:$100. I use Fidelity and you have to purchase in $1000 increments. Especially with shorter duration T-bills I like Treasury direct. The advantage of using a brokerage is that if you need to sell before maturity, you can. I have bought Treasury Notes (2 and 3 year) at fidelity for that reason.
My plan was to buy short-term t-bills at a pretty hefty dollar amount but I'd rather do it on my own then go through my financial advisor who charges 1% to oversee my money.