Emigrant Direct now at 4.65%

[justin]

Quote:

Originally Posted by lazyday Sounds pretty safe to me. I don't have an issue comparing yield of FDIC account to yield of a VG Treasury fund. It's prime money market vs. FDIC, without noting the difference, that I was a little concerned with.

The VG Treasury fund has an additional benefit that usual FDIC bank accounts don't have - state tax-free income. Almost all of my interest from VG Treasury MM is free from state income tax. That pushes the effective yield for me over 4.9%, which is why I chose it over FDIC bank accounts.

On a different note, I think worrying about risk w/ the VG prime MM versus FDIC insured accounts is like splitting hairs.

[Helen]

Quote:

Originally Posted by justin The VG Treasury fund has an additional benefit that usual FDIC bank accounts don't have - state tax-free income.* Almost all of my interest from VG Treasury MM is free from state income tax.* That pushes the effective yield for me over 4.9%, which is why I chose it over FDIC bank accounts.* *

I checked the VG website but could not find tax information. Are any other MM funds besides the Treasury fund state tax free ? I live in Oregon with a 9% state tax rate.

Thanks,

-helen

[mathjak107]

fidelity us treasury mm is too

[justin]

Quote:

Originally Posted by Helen I checked the VG website but could not find tax information. Are any other MM funds besides the Treasury fund state tax free ? I live in Oregon with a 9% state tax rate.

VG has the treasury MM, the treasury MM admiral class and the federal MM. The Treasury produces income that is almost completely state tax free. The federal MM produces income that is ~30-40% free from state income tax.

I don't know where it is located, but VG has a document on their website somewhere that lists all their mutual funds and shows what percentage of dividends are from federal government obligations (which are exempt from state income taxation).

Treasury is ~100% from federal obligations, and Federal MM is ~30-40% from federal obligations IIRC.

[lazyday]

Quote:

Originally Posted by justin worrying about risk w/ the VG prime MM versus FDIC insured accounts is like splitting hairs.

Ignoring the very unlikely, usually works quite well.

As long as we're not around for a "hundred year flood," then it will be just splitting hairs.