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Introducing Vanguard Cash Deposit

New this year, you can choose Vanguard Cash Deposit as the settlement fund in your IRA. It offers:

FDIC insurance

This insurance protects your money in the unlikely event of a bank failure. Coverage is automatic and free of charge.*

A different rate of return

Now you have a choice for the settlement fund in your IRA. Choose between Vanguard Federal Money Market Fund, which invests in short-term U.S. government securities, and Vanguard Cash Deposit, which is a bank product. Both options strive to provide capital preservation. However, they may perform differently depending on the interest rate environment.

Vanguard
Cash Deposit

0.05% APY±


±The Annual Percentage Yield (APY) on Vanguard Cash Deposit is 0.05% as of 12/01/2021. APY will vary.

Vanguard Cash Deposit Terms of Use

Participating Program Banks

Eligibility requirements for Vanguard Cash Deposit

Make the switch to Vanguard Cash Deposit in your IRA today.

FAQs about the cash in your IRA

What is a settlement fund, and why do I need one?

A settlement fund is the vehicle that holds funds or money in your Vanguard Brokerage Account before or after you make trades. You need a settlement fund to pay for and receive proceeds from brokerage transactions. Your settlement fund can hold your funds or money while recently deposited money clears or while you choose which security to purchase.

Should I keep a balance in my settlement fund?

You're not required to have a balance in your settlement fund at all times. But you might want to keep some money in the fund for trading or other purposes. One benefit: It can make the trading process go more smoothly as you'll be more likely to have money to pay for purchases on the settlement date (when your account will be debited for the amount you owe).

What are some of the differences between the 2 options?

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 Cash Deposit Terms of Use.

*Vanguard Cash Deposit balances are held at one or more participating banks, earn a variable rate of interest, and are not covered by SIPC. Balances are eligible for FDIC insurance subject to coverage limits as detailed in Vanguard Cash Deposit Terms of Use.

For more information about Vanguard funds or Vanguard ETFs, 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.

You 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.

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

When you are enrolled in the Vanguard Cash Deposit program, Eligible Deposits that are swept to Program Banks are not securities: they are not covered by the Securities Investor Protection Corporation (SIPC), but are eligible for FDIC insurance. Eligible Deposits swept to Program Banks are the obligations of each Program Bank, and are not cash balances held by Vanguard Brokerage Services® (VBS). See the Vanguard Cash Deposit Terms of Use for more information. Assets swept to the Vanguard Federal Money Market Fund are held by VBS, a division of Vanguard Marketing Corporation, member FINRA and SIPC. These assets are not covered by FDIC insurance. See the Vanguard Brokerage Account Agreement for more information. You are responsible for monitoring the total assets you hold at each Program Bank for FDIC coverage and limitations. These total assets will include not only Eligible Deposits under the Bank Sweep, but also any other deposits you may hold at those banks. For more information about FDIC insurance coverage, please visit the FDIC website at FDIC.gov.

Bank deposits are guaranteed (within limits) as to principal and interest by an agency of the federal government.


Bank accounts can offer more liquidity, ATM access, and overdraft protection. You should consider all material differences before choosing to invest.