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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.
There are currently two options for the settlement fund: Vanguard Federal Money Market 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
What it is: A bank sweep option you can use for your settlement fund. Your settlement fund holds money in your Vanguard Brokerage Account before or after you make trades. At Vanguard, your settlement fund options are either Vanguard Federal Money Market Fund or Vanguard Cash Deposit. Vanguard Cash Deposit is a bank product and offers FDIC ...
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 ...
Most transactions go through the settlement fund (except in-kind). So, when you exchange fund A for fund B (a single transaction at Vanguard), fund A is sold and the proceeds go into the settlement fund and then fund B is bought with proceeds from the settlement fund. The last column in the Transaction list is movement to/from the settlement fund.
PinotGris wrote: ↑ Tue Nov 05, 2024 9:29 pm We received a check from "Qualified Settlement Fund " (GE ERISA Settlement). It mentions the claims upon which litigation was based involved allegations of violations of the employees retirement plan. My spouse retired from GE.
In my brokerage account, Vanguard says "Vanguard Federal Money Market Fund (Settlement fund)." 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 ...
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.
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 ...