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There are currently two options for the settlement fund: Vanguard Federal Money Market Fund is a mutual fund that provides dividends based on its 7-day SEC yield and may be eligible for SIPC coverage securities in your brokerage account are protected up to $500,000. Vanguard Cash Deposit is a bank product that provides interest based on its ...
Folks, Is the Vanguard settlement fund better to hold cash Vs the Vanguard cash plus account? This is what I see, Vanguard Federal Money Market Fund. Expense ratio 0.11%. 7 day SEC yield 5.27% (average annualized based on last 7 days) Vanguard Cash Plus. No expenses. APY as of August 24, 2023 - 4.70%.
A settlement fund is a money market fund that's used to pay for and receive proceeds from brokerage transactions. If your settlement fund is in a mutual fund account linked to your brokerage account, the accounts work together to complete transactions. Money moves or "sweeps" between the two accounts. If you have a brokerage account that holds ...
The settlement value is kept in the Federal Money Market Fund, a.k.a. VMFXX. (I believe that Vanguard's "prime" money-market fund no longer exists with that name.) There is no benefit from taking the money in your settlement fund and explicitly buying VMFXX. It is allowed, but that just clutters things up.
If you are selling from a Vanguard mutual fund, you can choose to receive the funds directly to your bank account. Vanguard directly controls the mutual fund and can be certain they can get the money. For ETFs, the money has to land in the settlement fund first. ETFs are purchased on the open market from another seller, most likely not Vanguard.
Settlement fund A Settlement Fund is used to pay for and receive proceeds from brokerage transactions. Total credits and debits A credit or debit will appear in your brokerage account when a transaction is pending. If you're owed money—for example, you're expecting proceeds from the sale of a security or receipt of a dividend—you'll see a ...
Funds settlement is an important 'back-office' function, and the faster it occurs, the more it reduces market risk by ensuring that trades are executed properly. Fast funds settlement also increases investor confidence in the markets by ensuring that their trades are completed on time and that they won't lose their funds to bankrupt brokerage ...
A settlement fund is as you describe, "like a middle ground between where money is coming from/going to" When you have a brokerage account, your purchases and sales inside it have a settlement period, which can be a couple days, and you need some highly-liquid and safe place to keep the cash while the financial institutions work in the background to transfer the ownership of whatever ...
VartAndelay wrote: ↑ Wed Sep 14, 2022 4:08 pm How safe is it to leave cash in this Vanguard brokerage account settlement fund (as compared to a bank account)? The 12% that is in T-bills is safer than a bank account, if anything.
On the "Profile & account settings" page click on "Banking". At the lower-right of the "Banking" page is "Change my settlement fund". You can switch between VMFXX and Cash Deposit for each of your accounts. More evidence that Vanguard don't spend our money on the website user experience.