Explore our 2 cash investment options
Make your cash count with a money market fund or certificate of deposit (CD).
Vanguard money market funds
Our money market funds invest in cash, cash equivalents, and high-quality, short-term debt securities. They also:
- May be appropriate for money you'll need within the next 3 to 6 months.
- Allow you to access your money without penalty.
- Focus on maintaining a stable share price.
- Have a $3,000 minimum investment requirement.
CDs
Banks and credit unions issue CDs to investment firms at a premium interest rate in return for a lump-sum deposit. If you're considering investing in a CD, please note that they:
- Are FDIC-insured for up to $250,000 per account owner for each ownership category at each institution.
- Offer maturities that vary from a few weeks to several years.
- Have a minimum investment requirement of $1,000
Additional short-term investments
If you're looking for funds that are a little less conservative than money market funds and are willing to take on more risk, you may be interested in our:
Vanguard Ultra-Short Bond ETF
Short-term bond ETFs can offer higher returns than cash investments or ultra-short-term bond funds at higher levels of risk. You may want to consider investing in one of our short-term bond ETFs if:
- You plan to invest your money for 6–18 months.
- You have a short-term savings goal, such as a vacation, car, or down payment on a home.
- You're willing to take on slightly more risk than you'd get with cash investments.
Vanguard short-term bond ETFs
Short-term bond funds can offer higher returns than cash investments or ultra-short-term bond funds. You may want to consider investing in one of our short-term bond funds if:
- You plan to invest your money for 18 months to 3 years.
- You have a short-term savings goal, such as a wedding or a down payment on a home.
- You're getting close to retirement.
Benefits of cash and short-term investments
Reduce market risk
With short-term bond and money market funds, you can invest your cash with less risk than with stock or long-term bond funds.
Get easy access to your cash
As our most liquid investment options, short-term bond and money market funds allow you to easily transfer money between your bank and Vanguard accounts.
Earn interest on your savings
Whether the money you set aside is for emergency savings or a big vacation, you still have the potential to earn interest while reducing market risk.
Bank accounts can offer more liquidity, ATM access, and overdraft protection. You should consider all material differences before choosing to invest. Bank deposits and CDs are guaranteed (within limits) as to principal and interest by an agency of the federal government.
All investing is subject to risk, including the possible loss of the money you invest.
Bonds are subject to the risk that an issuer will fail to make payments on time and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments. Investments in bonds are subject to interest rate, credit, and inflation risk.
All brokered CDs may fluctuate in value between purchase date and maturity date. CDs may be sold on the secondary market, which may be limited, prior to maturity subject to market conditions. Any CD sold prior to maturity may be subject to a substantial gain or loss. Vanguard Brokerage does not make a market in brokered CDs. The original face amount of the purchase is not guaranteed if the position is sold prior to maturity. CDs are subject to availability. As of July 21, 2010, all CDs are federally insured up to $250,000 per depositor, per bank. In determining the applicable insurance limits, the FDIC aggregates accounts held at the issuer, including those held through different broker-dealers or other intermediaries. For additional details regarding coverage eligibility, visit fdic.gov. Vanguard Brokerage imposes a $1,000 minimum for CDs purchased through Vanguard Brokerage. Yields are calculated as simple interest, not compounded. Brokered CDs do not need to be held to maturity, charge no penalties for redemption, and have limited liquidity in a secondary market. If a CD has a step-rate, the interest rate of the CD may be higher or lower than prevailing market rates. Step-rate CDs are subject to secondary-market risk and often will include a call provision by the issuer that would subject the investor to reinvestment risk. The initial rate of a step-rate CD cannot be used to calculate the yield to maturity. If a CD has a call provision, the issuer has sole discretion whether to call the CD. If an issuer calls a CD, there is a risk to the investor that the investor will be forced to reinvest at a less favorable interest rate. Vanguard Brokerage makes no judgment as to the creditworthiness of the issuing institution and does not recommend or endorse CDs in any way.
Vanguard Municipal Money Market Fund: The Fund is only available to retail investors (natural persons). You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time. Vanguard Municipal Money Market Fund is only available to retail investors (natural persons). Vanguard Municipal Money Market Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund's liquidity falls below required minimums because of market conditions or other factors.
Vanguard Cash Reserves Federal Money Market Fund and Vanguard Federal Money Market Fund: You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
For more information about Vanguard funds, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.