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Vanguard Cash Deposit

An FDIC-insured option to hold the money you're waiting to invest.

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What's Vanguard Cash Deposit?

It's an alternative settlement fund option to Vanguard Federal Money Market Fund.1 You can use the cash in your Vanguard Cash Deposit to place trades in your brokerage account. Brokerage accounts have a built-in settlement fund that facilitates all your buying and selling. Using Vanguard Cash Deposit means your cash is eligible for FDIC insurance.

Settlement fund

At Vanguard, settlement fund refers to the sweep program option used to pay for and receive proceeds from trades. Vanguard Brokerage Service's sweep program automatically transfers ("sweeps") any uninvested funds, such as new deposits or the proceeds from securities transactions, into a money market fund or bank product sweep option. Funds are swept out to pay for transactions.

{{VCD.apy}}%

annual percentage yield2

Vanguard Cash Deposit offers a competitive annual percentage yield (APY) of {{VCD.apy}}% as of {{VCD.effectiveDateLong}}. The APY will vary and may change at any time.

$1.25 M

FDIC coverage3

The cash in your Vanguard Cash Deposit is eligible for FDIC coverage up to $1.25 million for individual accounts and $2.5 million for joint accounts.

$0

no additional fees4 and no minimum balance requirement

There are no additional fees to maintain Vanguard Cash Deposit as a settlement fund option. In addition, there are no limits on how often you can transfer money.

We offer 2 choices for your settlement fund

See the differences between having each product as your settlement fund.5

Vanguard Cash Deposit

Insurance coverage
Eligible for FDIC insurance up to $1.25 million for individual accounts and $2.5 million for joint accounts.3

To learn more, visit the FDIC's website.

Checkmark. $0 initial minimum investment

Checkmark. $1 additional investment amount

Checkmark. Access your money (liquidity) without penalty

Choose Vanguard Cash Deposit

Vanguard Federal Money Market Fund (VMFXX)

Insurance coverage
Money market funds held in the Vanguard Brokerage Account are eligible for SIPC coverage. Securities in your brokerage account are protected up to $500,000.

Note: SIPC doesn’t cover losses related to decline in market value.

To learn more, visit the SIPC's website.

Checkmark. $0 initial minimum investment

Checkmark. $1 additional investment amount

Checkmark. Access your money (liquidity) without penalty

Learn more about VMFXX
 

Vanguard Cash Deposit

Vanguard Federal Money Market Fund (VMFXX)

Insurance coverage

Eligible for FDIC insurance up to $1.25 million for individual accounts and $2.5 million for joint accounts.3

To learn more, visit the FDIC's website.

Money market funds and other securities held in the Vanguard Brokerage Account are eligible for SIPC coverage. Securities in your brokerage account are protected up to $500,000.

To learn more, visit the SIPC's website.
$0 initial minimum investment Checkmark. Checkmark.
$1 additional investment amount Checkmark. Checkmark.
Access your money (liquidity) without penalty Checkmark. Checkmark.
Choose Vanguard Cash Deposit
Learn more about VMFXX
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View transcript

How does the settlement fund work?

See why it plays a key role in your brokerage account.

Settlement fund

At Vanguard, settlement fund refers to the sweep program option used to pay for and receive proceeds from trades. Vanguard Brokerage Service's sweep program automatically transfers ("sweeps") any uninvested funds, such as new deposits or the proceeds from securities transactions, into a money market fund or bank product sweep option. Funds are swept out to pay for transactions.

How the settlement fund works

All Vanguard brokerage accounts come with a settlement fund. Cash in your account that's waiting to be invested gets swept to the settlement fund, paving the way for buying and selling brokerage products.

When you buy, the purchase price comes out of your settlement fund.

[A man sits on his couch with a laptop. Images on the screen show a sample brokerage transaction of buying shares and his settlement fund balance decreasing.]

And when you sell, the money goes to your settlement fund, where it stays until you're ready to transact.

[Another man sits on his couch with a laptop. Images on the screen show a sample brokerage transaction of selling shares and his settlement fund balance increasing.]

Keeping some money in your settlement fund can help trading activity run smoothly, and Vanguard Brokerage's two settlement fund options were chosen to help preserve your capital when you're between transactions.

[Text on the screen shows two settlement fund options: 1. Vanguard Cash Deposit and 2. Vanguard Federal Money Market Fund. The Vanguard wordmark and disclosures appear on the screen.]

Helpful resources

The role of your settlement fund

Investing strategies
The role of your settlement fund
Your settlement fund paves the way for buying and selling brokerage products.
Education
Online trading

FDIC vs. SIPC insurance: Understanding the differences

Investing strategies
FDIC vs. SIPC insurance: Understanding the differences
The FDIC and SIPC protect consumers in different ways. Find out more about the key differences in coverage and insurance limits.
Article
How to invest

What are money market funds?

Understanding investment types
What are money market funds and how do they work?
Money market funds can give you the opportunity to get a better return on your cash, including your emergency fund, money sitting in a savings account, or a spending fund.
Education
Cash investments

Frequently asked questions

All brokerage trades and account transactions go through a broker, like Vanguard Brokerage. Money to pay for your purchases is taken from your sweep account and proceeds from your sales are received in your sweep account.

Learn more about the sweep account

Vanguard Cash Deposit is a bank product that offers FDIC insurance (subject to applicable limits). Vanguard Federal Money Market Fund is a mutual fund that may be eligible for SIPC protection. Both options strive to provide capital preservation. However, because they’re different types of products, the income they provide may be different. For additional considerations, refer to the Vanguard Bank Sweep Products Terms of Use (PDF).

No. A settlement fund is the same as a sweep account or a cash sweep account.

Vanguard Cash Deposit is a bank product. This means your cash is held at banks in our network that offer FDIC insurance (subject to applicable limits).

Money market funds are mutual funds that are invested in highly liquid short-term debt, such as cash, cash equivalents, and high-quality, short-term debt securities.

Vanguard Bank Sweep Products Terms of Use (PDF)
Participating Program Banks (PDF)

Vanguard Cash Deposit is neither a high-yield savings account nor a brokerage account. It’s an alternate option for your settlement fund, which sits within your brokerage account.

Vanguard Cash Deposit: An FDIC-insured option for your settlement fund within your Vanguard Brokerage Account. Vanguard Cash Deposit offers an APY and can be used as a place to hold your cash for future trades or transactions.

Vanguard Cash Plus Account: An FDIC-insured savings account alternative that offers a bank sweep with a competitive APY and its own unique account and routing number. The account can be linked to payment apps like PayPal or Venmo to access your money.

Learn more about how these products differ
Learn more about Cash Plus

1You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1 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.

2The annual percentage yield (APY) on Vanguard Cash Deposit is {{VCD.apy}}% as of {{VCD.effectiveDateLong}}. The APY will vary and may change at any time.

3Bank Sweep program balances are held at one or more Program Banks and are not cash balances held by Vanguard Brokerage Services® (VBS®), earn a variable rate of interest, and are not securities covered by SIPC. Bank Sweep deposits are covered by FDIC insurance up to $250,000 per insurable category of ownership at each Program Bank, when aggregated with all other deposits held by you at such bank and in the same insurable category. VBS will aggregate and allocate Bank Sweep deposits to Program Banks across Vanguard Cash Plus and Vanguard Cash Deposit with identically registered accounts to offer maximum FDIC coverage up to $1.25 million for individual and trust accounts and $2.5 million for joint accounts when at least 5 Program Banks are utilized. VBS will aggregate and allocate Bank Sweep deposits for trust accounts at the account level and not at the beneficiary level. FDIC coverage may be decreased based on Program Bank limits and whether you've opted out of any Program Banks and is subject to applicable FDIC coverage limits. You are solely responsible for monitoring the aggregate amount that you have on deposit at each Program Bank in connection with FDIC limits, including through other accounts at VBS. See the Vanguard Bank Sweep Products Terms of Use (PDF) and list of participating Program Banks (PDF) for more information. For more information about FDIC insurance coverage, please visit fdic.gov.

4There are no fees or minimum balance requirements associated with Vanguard Cash Deposit as a settlement fund. See the Vanguard Brokerage Services commission and fee schedules for commission and fees applicable to the Vanguard Brokerage Account.

5You can choose between Vanguard Cash Deposit and Vanguard Federal Money Market Fund as your settlement fund. Both options strive to provide capital preservation. However, they may perform differently depending on the interest rate environment.

When you are enrolled in the Vanguard Cash Deposit program, Eligible Deposits that are swept to Program Banks are not securities, are not cash balances held by VBS, and are not covered by SIPC. Assets swept to Vanguard Federal Money Market Fund are held by VBS, are not covered by FDIC insurance, and are eligible for SIPC coverage. See the Vanguard Bank Sweep Products Terms of Use (PDF) and Vanguard Brokerage Account Agreement (PDF) for more information.

Vanguard Federal Money Market Fund has an expense ratio of 0.11% as of December 22, 2023. Vanguard Cash Deposit's Program Banks pay a fee to VBS for Bank Sweep deposits that is retained by VBS as revenue and reduces the amount of interest paid to depositors.

There may be other material differences between these products that must be considered prior to investing.

For more information about Vanguard funds or ETFs, obtain a Vanguard mutual fund or Vanguard ETF 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.

All investing is subject to risk, including the possible loss of the money you invest.