Where to hold cash at Vanguard

[GreenER]

I'm wondering where best to hold a moderate chunk of liquid funds at Vanguard for best returns. I want this to be a safe harbor and don't expect much in the way of interest these days, but am just hoping to find the best of their offerings for a stable placement of cash in my Roth account.

 

[RunningBum]

Perhaps VUBFX, ultra-short-term bonds, is right for you. A little bit of return and very little risk. If it's not enough return for you, you probably need to be willing to take more risk.

 

[Another Reader]

I dumped Vanguard for my cash holdings after they quietly changed their treasuries only money market fund to include products designed to juice the yield with more risk. If principal preservation is paramount, look for a pure treasury money market fund. Fidelity has one.

 

[Retireby45ish]

I dumped Vanguard for my cash holdings after they quietly changed their treasuries only money market fund to include products designed to juice the yield with more risk. If principal preservation is paramount, look for a pure treasury money market fund. Fidelity has one.

What’s the fidelity one you speak of? Want to make sure I have mine in the right place (I wanted to check this is what I had my cash (core account) in)

 

[RunningBum]

I agree that you should probably look outside of VG as well.

 

[tulak]

I agree that you should probably look outside of VG as well.

Probably hard to do with a Roth. I keep my Roths invested mostly in equities to maximize their growth and hold FI/cash in tax sheltered/after-tax accounts.

Might be helpful to readjust your account holdings based on your AA so you can hold cash in after-tax accounts, then invest those in a high-yield savings account or T-Mobile bank. That’s assuming that you can readjust.

Otherwise a short-term bond fund is about as good as it gets without more risk.

 

[RunningBum]

Probably hard to do with a Roth.

I overlooked the Roth part, thanks.

 

[Another Reader]

What’s the fidelity one you speak of? Want to make sure I have mine in the right place (I wanted to check this is what I had my cash (core account) in)

It's not available as a core account. The return is essentially zero, but it is invested in treasuries exclusively. No repurchase agreements, swaps or other nonsense that exposes you to more risk. FDLXX.

 

[GreenER]

Probably hard to do with a Roth. I keep my Roths invested mostly in equities to maximize their growth and hold FI/cash in tax sheltered/after-tax accounts.

Might be helpful to readjust your account holdings based on your AA so you can hold cash in after-tax accounts, then invest those in a high-yield savings account or T-Mobile bank. That’s assuming that you can readjust.

Otherwise a short-term bond fund is about as good as it gets without more risk.

Yes, I've always held only equities in my Roth too in the past. I don't have much in the way of after tax investments as the majority of my investments are either in IRA or Roth accounts. I have spent down the cash reserves I had in savings and CDs over the last couple years as the rates have been so paltry it seemed silly to hold as much as I had been there. But, I still want to have a chunk of money that I can access for emergencies without effecting income for ACA and wanted to have the peace of mind of having something available to withdraw in a down market.

 

[GreenER]

I dumped Vanguard for my cash holdings after they quietly changed their treasuries only money market fund to include products designed to juice the yield with more risk. If principal preservation is paramount, look for a pure treasury money market fund. Fidelity has one.

I do have a Fidelity account but it's mostly IRA. The lion's share of my Roth money is at Vanguard. I guess I could withdraw this chunk of money now from the Vanguard Roth and just put it into my brokerage account at Fidelity but I was wanting to keep it in the Roth so that I could reinvest it if things feel like they aren't so volatile in the near future.

 

[FLSUnFIRE]

I'm using my CU's MMSA for cash now. Not much but a better yield than cash at Vanguard and instant transfers to checking if needed. Depending on how much cash I raise next December (will be driven more by MAGI than spending needs), I may shop around a bit for better yields if it will last me more than a year.

 

[Another Reader]

I do have a Fidelity account but it's mostly IRA. The lion's share of my Roth money is at Vanguard. I guess I could withdraw this chunk of money now from the Vanguard Roth and just put it into my brokerage account at Fidelity but I was wanting to keep it in the Roth so that I could reinvest it if things feel like they aren't so volatile in the near future.

You could rollover that portion of your Roth at Vanguard into a new rollover Roth at Fidelity. That way you preserve the Roth status of those funds.

 

[Surewhitey]

We have a chunk in VIPSX for inflation hedge and safety... If such a beast exists.

 

[pb4uski]

I use VSGDX for Vanguard cash... 0.8% SEC yield, 0.5% distribution yield, 0.8% portfolio yield to maturity less 0.1% ER. 2.8 year duration and no credit risk.

But I don't keep a lot in cash.

 

[GreenER]

I use VSGDX for Vanguard cash... 0.8% SEC yield, 0.5% distribution yield, 0.8% portfolio yield to maturity less 0.1% ER. 2.8 year duration and no credit risk.

But I don't keep a lot in cash.

This sounds like the ticket as the yield is similar to current interest rates on Ally savings where I would usually hold cash if it weren't still in the Roth. However, it looks like minimum investment is $50,000 for the Admiral shares and that's more cash than I plan to hold there. Sounds like regular investor shares would be VSGBX with an ER if .20% rather than .10%.

 

[OverThinkMuch]

I dumped Vanguard for my cash holdings after they quietly changed their treasuries only money market fund to include products designed to juice the yield with more risk. If principal preservation is paramount, look for a pure treasury money market fund. Fidelity has one.

Vanguard also has a pure treasury money market fund. It's not only higher quality than their default pick, it has a slightly lower expense ratio. I'm using it now. But the yield on any money market is zero right now, so not much of a difference either way.

Perhaps VUBFX, ultra-short-term bonds, is right for you. A little bit of return and very little risk. If it's not enough return for you, you probably need to be willing to take more risk.

Those bonds are 1/3rd barely investment grade. They've increased the yield by allocating much lower quality bonds, so personally I avoid that. I take my risk in equities, and stick with higher quality bonds.