pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I simply don't consider them equivalent.
We agree on that, but IMO the difference in credit risk is essentially imperceptible.
I simply don't consider them equivalent.
Even a few basis point difference in MM funds is something to note and take advantage of, so ER are very important. Vanguard has the lowest ER of all of them. Even Schwab is lower then Fidelity. Why you ask? Because the yield on MM moves very quickly as noted by the 7 day yield. So vanguard with the lowest ER will follow the interest rate rise slightly ahead of all other MM funds and has so far always stayed that way. Also they are the only fund company to continue to lower cost, others do but only because they have to follow Vanguard.
Another Reader often takes the opportunity to warn people that Fidelity MM funds have high expense ratios compared to say Vanguard. Of course this difference is simply reflected in the yields quoted when comparing Fidelity MM funds to Vanguard MM funds.
The 0.26% difference in ER between SPRXX(ER of 0.42%) and VMMXX (ER of 0.16%) is mostly reflected in their respective yields of 1.86% versus 2.04%. The fact that the Fidelity makes up about 8 basis points of the difference in expense ratios as the yield difference is only 0.18% perhaps leads him/her to think that the Fidelity Prime MM is taking on more risk.
It appears to be a complaint about Fidelity MM funds having high expense ratios as compared to their yields in general.
Some of us don’t have Vanguard Brokerage Accounts and are instead comparing Fidelity MM yields and risks against high yield savings accounts and maybe 4 week T-bills.
Note that CDs and high yield savings accounts aren’t required to publish expense ratios, so we don’t know what they are. All we can do is compare yields. MM funds, because they are mutual funds, are required to publish ERs, even though they target an unchanging $1 share price.
Just curious brewer... why Redneck Bank when Vanguard Prime MM is paying the same rate?
Just curious brewer... why Redneck Bank when Vanguard Prime MM is paying the same rate?
Our family’s been in bankin’ since 1927, way before this here Interweb took over the bayou. We started Redneck Bank to give folks the best darn deal online — with higher interest, lower fees and a whole lot more fun.
Redneck Bank is the Internet Banking Division of All America Bank, a well-respected country bank established in Mustang, Oklahoma in 1969.
Three reasons:
- I don't have an account with Vanguard and I don't want one
- FDIC insured is full faith and credit. MM is not. If they are paying the same and I have to open an account anyway, I will take the full faith and credit option.
- I can tell friends I am a (debit) card carrying redneck
I see. Since I have a lot consolidated at Vanguard it is easier in my case and IMO the credit risk difference is negligible. My friends already know that I'm a redneck so no advantage there.