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*The average SEC yield (as of November 30. 2018) of Vanguard taxable money market funds is 2.26%. According to bankrate.com, bank savings accounts had a national average annual percentage yield (APY) of 0.09% (as of November 30. 2018).
**As of November 30, 2018, the 7-day SEC yield for Vanguard Federal Money Market Fund was 2.19%.
***The Schwab Bank Sweep feature for retirement and brokerage paid 0.30% on univested cash balances less than $1 million as of Nov. 30, 2018.
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 APY is the total interest earned on a bank product in one year, assuming no funds are added or withdrawn.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 yeilds 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 yeild" which can be compared with an APY.
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.
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% of Vanguard money market funds performed better than their peer-group averages over the past 10 years.1
The average expense ratio on Vanguard's money market funds is 50% less than the industry average.2
Vanguard money market funds return 20X the national savings account average.3
Vanguard money market funds return 6X more than our competitor's sweep account.4
1For the 10-year period ended September 30, 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 September 30, 2018.
3The average SEC yield (as of November 30, 2018) of Vanguard taxable money market funds is 2.26%. According to bankrate.com, bank savings accounts had a national average annual percentage yield (APY) of 0.09% (as of November 30. 2018).
4As of November 30, 2018, the 7-day SEC yield for Vanguard Federal Money Market Fund was 2.19%. The Schwab Bank Sweep feature for retirement and brokerage paid 0.30% on uninvested cash balances less than $1 million as of November 30, 2018.
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.
Vanguard Federal Money Market Fund has a 0.11% expense ratio (as of November 30, 2018) and invests mostly in short-term, U.S. government securities, including Treasures 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.
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: 0.30%–0.60% for retirement and brokerage accounts as of November 30, 2018.