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Post by yogibearbull on Nov 20, 2022 23:16:36 GMT
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Post by yogibearbull on Nov 20, 2022 23:40:09 GMT
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Post by Fearchar on Nov 21, 2022 1:46:45 GMT
I guess Treasuries are not exactly FDIC insured.
However, all durations of up to ~7 years are paying more than 4%.
Rates on the shorter durations may edge up higher early next year.
That'd depress prices for the longer durations, but eventually their rates will fall.
So, I can see why Vanguard is planning to roll this out.
But I would hope that most people on this board could noodle out a better option.
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Post by yogibearbull on Nov 21, 2022 5:26:26 GMT
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Post by Deleted on Nov 21, 2022 12:26:52 GMT
I had a Vanguard Advantage account, direct deposit, billpay, checking, and debit card. When Vanguard ended theirs, I switched the direct deposit to Fidelity. So a loss to Vanguard for new money. As far as the cash+ account they are beta testing, I don't trust them. One of the banks is in India. Don't know who owns it, but I want a U.S. bank located on U.S. soil.
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Post by Capital on Nov 22, 2022 13:06:10 GMT
I just opened a Cash Plus Account. Very easy process. All my transfer accounts I have set up for my Brokerage Account are available in the Cash Plus Account. I plan to use this as my FDIC Savings vehicle. Rates are competitive with other online competitors; and, I have no need to have a separate login.
I have already begun the process to convert my Core Brokerage account from the MM to the Cash Sweep Option. That process should be complete tomorrow. My thinking is that by converting I now have the ability to use the Cash Sweep as well as the ability to purchase MM Shares.
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Post by Deleted on Nov 22, 2022 14:01:58 GMT
I just opened a Cash Plus Account. Very easy process. All my transfer accounts I have set up for my Brokerage Account are available in the Cash Plus Account. I plan to use this as my FDIC Savings vehicle. Rates are competitive with other online competitors; and, I have no need to have a separate login. I have already begun the process to convert my Core Brokerage account from the MM to the Cash Sweep Option. That process should be complete tomorrow. My thinking is that by converting I now have the ability to use the Cash Sweep as well as the ability to purchase MM Shares. I read YBB links before posting, and they influenced my personal decision to continue using the federal money market as the settlement fund. Vanguard has reported additional insurance beyond SIPC for brokerage accounts. With other brokerages and banks I have FDIC accounts. |
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Post by Capital on Nov 22, 2022 20:57:57 GMT
I just opened a Cash Plus Account. Very easy process. All my transfer accounts I have set up for my Brokerage Account are available in the Cash Plus Account. I plan to use this as my FDIC Savings vehicle. Rates are competitive with other online competitors; and, I have no need to have a separate login. I have already begun the process to convert my Core Brokerage account from the MM to the Cash Sweep Option. That process should be complete tomorrow. My thinking is that by converting I now have the ability to use the Cash Sweep as well as the ability to purchase MM Shares. I read YBB links before posting, and they influenced my personal decision to continue using the federal money market as the settlement fund. Vanguard has reported additional insurance beyond SIPC for brokerage accounts. With other brokerages and banks I have FDIC accounts. @haven , I am not faulting what yogibearbull has posted. I made my decisions based on what works for me. I'm sure that you have done the same and commend you for that. I still have the option of buying the MM Fund. |
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Post by bizman on Nov 22, 2022 21:02:04 GMT
I understand the attractiveness of FDIC insurance versus money market funds backed by commercial paper, and I did all sorts of machinations in the 2007-2009 time frame to use Treasuries and FDIC insurance.
But is $250k FDIC insurance really better than Vanguard's Federal Money Market Fund in a financial crisis? You could quibble a bit about Gov't Agencies not explicitly having the full faith and credit of the US Treasury, but it seems to me if VMFXX is close to going down, the Feds are going to have to guarantee all money market fund and bank account assets like in 2008-2009 to keep the financial system from imploding. Am I way off base here?
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Post by FD1000 on Nov 23, 2022 4:53:57 GMT
I keep it simple and use Schwab Schwab Value Advantage Money Fund® Investor Shares (SWVXX). It pays now 3.74%. There is no min to buy.
This is not a sweep MM, when I trade a fund I have to initiate the opposite order from this MM. Really not a big deal. Example: if I want to buy $500K of SPY, I create first a sell order to sell SWVXX for the same amount.
If this fund fails, we should all worry about a real calamity.
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Post by anitya on Nov 23, 2022 7:10:55 GMT
I keep it simple and use Schwab Schwab Value Advantage Money Fund® Investor Shares (SWVXX). It pays now 3.74%. There is no min to buy. This is not a sweep MM, when I trade a fund I have to initiate the opposite order from this MM. Really not a big deal. Example: if I want to buy $500K of SPY, I create first a sell order to sell SWVXX for the same amount. If this fund fails, we should all worry about a real calamity. When I click on the Trade Details for SWVXX, I see that the settlement date is T+1. Per SEC rule, all money market funds are supposed to settle on the date of trade (i.e., T+0). How does Schwab get away with T+1? When interest rates are 4+%, even 1 day interest could be a non-trivial amount? Thought you might want to look into this. (Does not affect me as I drew down my balances at Schwab because I did not like their T+1 and the requirement to place the additional sell order does not work well for me.) As an aside, When you buy SPY, which settles on T+2, you could wait until the next day to sell your SWVXX, instead of selling SWVXX first and then place the buy order. In fact, you could place the sell order after the market close on the date you buy SPY, in case you are worried about forgetting to sell SWVXX the next day. |
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Post by FD1000 on Nov 23, 2022 14:15:16 GMT
I keep it simple and use Schwab Schwab Value Advantage Money Fund® Investor Shares (SWVXX). It pays now 3.74%. There is no min to buy. This is not a sweep MM, when I trade a fund I have to initiate the opposite order from this MM. Really not a big deal. Example: if I want to buy $500K of SPY, I create first a sell order to sell SWVXX for the same amount. If this fund fails, we should all worry about a real calamity. When I click on the Trade Details for SWVXX, I see that the settlement date is T+1. Per SEC rule, all money market funds are supposed to settle on the date of trade (i.e., T+0). How does Schwab get away with T+1? When interest rates are 4+%, even 1 day interest could be a non-trivial amount? Thought you might want to look into this. (Does not affect me as I drew down my balances at Schwab because I did not like their T+1 and the requirement to place the additional sell order does not work well for me.) As an aside, When you buy SPY, which settles on T+2, you could wait until the next day to sell your SWVXX, instead of selling SWVXX first and then place the buy order. In fact, you could place the sell order after the market close on the date you buy SPY, in case you are worried about forgetting to sell SWVXX the next day. I have used SWVXX for months. I always sell and buy on the same date, but I use mainly mutual funds that settle withing one day. It's a good habit to sell first and buy later. Years ago, I did what you posted, bought SPY, and sold a mutual fund that had one settlement date, not SWVXX, the next day. I got a warning from Schwab, if I do it again, they would require me to have cash or sweep MM in the account. That's not good for me, because I trade mutual funds all the time, on the same day. "When interest rates are 4+%, even 1 day interest could be a non-trivial amount?" it's peanuts. It's the first time in my investment history that I used MM for months. The longest periods were 3-4 weeks in 03/2020 + Q1/2018 (SP500 down 20+%). FZDXX($100K min) with similar yield to SWVXX at Fidelity works better. You don't need to sell, Fidelity would do it for you, but I sell anyway. Ho well, one thing thing is better at Fidelity.  |
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