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treat your cash like an investment

Interest rates are rising. That means you should be earning more interest on your cash savings. If you're not, you may not be getting your fair share of earnings.

What they're doing and the difference it makes

Bank savings accounts

Offering low returns. When interest rates rise, banks can either increase their profits or pass higher earnings on to you. Some banks have been slow to pass on those earnings. Below you can see the current difference between putting your cash in a bank account instead of a Vanguard money market fund.

2.48% Vanguard Money Market Funds Average - 0.09% Savings Accounts Average
Brokerage sweep accounts

Moving your money to low-yield accounts. Some brokerage firms automatically sweep idle cash from your brokerage settlement fund into a low-yield bank account. Compare the difference between Vanguard's settlement fund and Schwab's sweep account.

2.31% Vanguard Federal Money Market Fund** - 0.33% Schwab Sweep Account***

*The 7-day SEC yield as of January 31, 2019, on Vanguard Prime Money Market Fund (Investor Shares) is 2.48% and, according to the FDIC Weekly National Rates and Rate Caps, the national average of savings account rates, which doesn’t include credit unions, is 0.09% as of January 31, 2019.

**Vanguard Federal Money Market Fund serves as the sweep account for Vanguard’s retail brokerage and has a 7-day SEC yield of 2.31% on all balances as of January 31, 2019.

***The Schwab Bank Sweep feature for retirement and brokerage pays 0.33% on uninvested cash balances less than $1 million as of January 31, 2019.

The SEC yield is the average amount earned by a money market fund's investors (after expenses) over the past 7 days and then multiplied into an annual figure. APY is the total interest earned on a bank product in one year, assuming no funds are added or withdrawn. One big difference is that SEC yields don't take into account compounding, which makes them seem lower when compared directly to APYs. To account for that, money market funds also report a "compound yield" which can be compared with an APY.

To be fair, bank sweep and savings accounts can have characteristics that differentiate them from other cash investments. For example, bank accounts have FDIC protection, which means bank deposits are guaranteed (within limits) as to principal and interest by an agency of the federal government. Additionally, they may offer overdraft protection, ATM access (immediate access to your money), and other convenience features. Each company's products differ, so it's important to ask questions to understand account features, minimums, and potential withdrawal fees.

Ready to make the switch?

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We're taking a stand for investors

Some people–and companies–have your best interests at heart. Vanguard's one of them. Our company structure is designed to align our interests with those of our investors.

This is about more than cash returns. It's about doing the right thing for investors. We're urging you to check your accounts. This is the first time in years you've had the opportunity to earn higher rates on your cash. Make sure you're the one getting the benefits.

Know your options

When interest rates rise, Vanguard money market funds send the financial benefits right back to you in the form of higher yields.

What difference does it make where you're stashing your cash? Here's how Vanguard money market funds stack up against other investment options.

100%

100% of Vanguard money market funds performed better than their peer-group averages over the past 10 years.1

50%

The average expense ratio on Vanguard's money market funds is 50% less than the industry average.2

27X

The Vanguard Prime Money Market fund returns 27x more than the national savings account average.3

7X

The Vanguard Federal Money Market fund returns 7x more than our competitor's sweep account.4

1For the 10-year period ended December 31st, 2018, 9 of 9 Vanguard money market funds outperformed their Lipper peer-group averages. Results will vary for other time periods. Only money market funds with a minimum 10-year history were included in the comparison. Source: Lipper, a Thomson Reuters Company. The competitive performance data shown represent past performance, which is not a guarantee of future results. View fund performance

2Vanguard average money market expense ratio: 0.13%. Industry average money market expense ratio: 0.26%. All averages are asset-weighted. Industry averages exclude Vanguard. Sources: Vanguard and Morningstar, Inc., as of December 31, 2018.

3The 7-day SEC yield as of January 31, 2019, on Vanguard Prime Money Market Fund (Investor Shares) is 2.48% and, according to the FDIC Weekly National Rates and Rate Caps, the national average of savings account rates, which doesn’t include credit unions, is 0.09% as of January 31, 2019.

4Vanguard Federal Money Market Fund serves as the sweep account for Vanguard’s retail brokerage and has a 7-day SEC yield of 2.31% on all balances as of January 31, 2019. The Schwab Bank Sweep feature for retirement and brokerage pays 0.33% on uninvested cash balances less than $1 million as of January 31, 2019.

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

Vanguard Prime, Federal, and Treasury Money Market Funds: You could lose money by investing in the Funds. Although the Funds seek to preserve the value of your investment at $1.00 per share, they cannot guarantee they will do so. An investment in the Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Funds' sponsor has no legal obligation to provide financial support to the Funds, and you should not expect that the sponsor will provide financial support to the Funds at any time. Vanguard Prime Money Market Fund is only available to retail investors (natural persons). Vanguard Prime 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 is client-owned, meaning the company is owned by its funds, which in turn are owned by their shareholders.

REFERENCE CONTENT

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Vanguard's Settlement Fund and Schwab's Sweep Account

Vanguard Federal Money Market Fund has a 0.11% expense ratio (as of December 31, 2018) and invests mostly in short-term U.S. government securities, including treasuries and agencies. A $3,000 minimum initial investment is required for a mutual fund account (no minimum if you're using the fund as your brokerage settlement fund). Account service fees may apply. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee that 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 Schwab Bank Sweep account feature is FDIC-insured up to $250,000 per depositor per insured institution, based on account ownership type, and has no account service fees. The Bank Sweep feature includes access to additional features such as ATM access, online bill pay, and free checks and other cash management features. APY: 0.33%–0.70% for retirement and brokerage accounts as of January 31st, 2019.