Vanguard Question

[fritzo489]

Recently I sent money from bank account to Vanguard, & not the first time I've done this. It seems to me previous amounts ended up in their settlement fund, VMFXX . So when I bought something the purchase price was removed from that fund.

It appears to me that as of the last transfer (shares) were bought in VMFXX, Vanguard Federal Money Market Fund.  Thus I would need to sell shares & then make a purchase.

  I'm now wondering if I'm reading this process correctly.  The question arises as to why VG went in this direction?

  Account show $xx,xxx in settlement fund & $yy,yyy or shares in VMFXX. The y amount is total dollars sent to VG. Amount in settlement fund should show the total of both amounts, but only previous amount prior to transfer shows.

                                                                      Thanks for your time , fritzo489

[johnsmith]

fritzo489,

Are you saying the settlement fund is now different?
It's not clear what the question is.

[fritzo489]

johnsmith,  I called VG & didn't get what I would call a correct reason answer.  Was told something about changing into their Brokerage platform was causing the question. I told the gal I had done transfers before & it showed in the settlement fund.

  Tomorrow I'll try a purchase for more than what shows in the available to trade & see if any pop ups show saying not enough $$ to make the purchase.

                                                     Wish me luck, fritzo489

[fishingrod]

fritzo489 ,

In my Vanguard brokerage account, VMFXX Federal money market fund IS the settlement fund. I don't have to sell shares of VMFXX in order to buy something. It comes directly out of the settlement fund VMFXX for purchases. When I sell something, the proceeds go directly into VMFXX settlement fund. When I do a bank transfer, the money goes directly into VMFXX. 

The question you pose is kind of hard to understand.

I believe it is because of the change to brokerage platform. It seems that you now have both your settlement fund from before AND the new settlement fund VMFXX with the brokerage acct.

Good Luck.

[fritzo489]

johnsmith, fishingrod,
I tried selling VMFXX this morning & moving to settlement fund, one in the same. Maybe I should have used exchange ?
IT didn't work. I also tried to purchase an amount more that what settlement fund showed to buy another fund, but would have been covered easily with VMFXX added in. NO go there also !

So I called again & transfer to settlement fund is now done. From what I understand when transferring money into your account, a pop up shows where to place the transfer. I guess I chose VMFXX instead of settlement fund.

Long story short, They're both the same, ( VMFXX - Settlement fund ) but yet different.

End of story, fritzo489

[chang]

See this post, I think it's on-topic:

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big-bang-investors.proboards.com/post/21550/thread

I just noticed what seems like a bug on VG's website. VMFXX is the settlement fund, but it can also be held as a separate position. I made a mistake the other day and "exchanged" a fund for VMFXX instead of "selling" the fund *to* the settlement fund. So, VMFXX showed up as a new position, alongside the settlement fund. (Easy enough to correct: today I am selling VMFXX to the settlement fund. Hopefully VG won't actually do anything other than just adjust my account display.)

I don't think anybody would want to hold VMFXX as a separate position, thereby tying up the money and requiring an extra day to sell it and buy something else.

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You might want to read the entire thread.

[habsui]

Apr 18, 2023 15:14:11 GMT fritzo489 said:

johnsmith , fishingrod ,
I tried selling VMFXX this morning & moving to settlement fund, one in the same. Maybe I should have used exchange ?
IT didn't work. I also tried to purchase an amount more that what settlement fund showed to buy another fund, but would have been covered easily with VMFXX added in. NO go there also !

So I called again & transfer to settlement fund is now done. From what I understand when transferring money into your account, a pop up shows where to place the transfer. I guess I chose VMFXX instead of settlement fund.

Long story short, They're both the same, ( VMFXX - Settlement fund ) but yet different.

End of story, fritzo489

Just close out the non settlement VMFXX.  Move it all to the VMFXX settlement fund.  Done. 

[Fearchar]

Over the weekend, I transferred some funds from my Credit Union checking account into a Vanguard account.
The funds are listed as "Total Credits and Debits".

Here is how Vanguard describes that:

Total credits and debits
A credit or debit will appear in your brokerage account when a transaction is pending.

If you're owed money—for example, you're expecting proceeds from the sale of a security or receipt of a dividend—you'll see a credit.

If you owe money—for example, you've bought securities that haven't settled yet or an account-level fee is pending—you'll see a debit.

Generally, the day after the transaction settles, the credit or debit amount will be zero, as a result of a sweep to or from your Settlement Fund. If you have multiple pending transactions, the credit or debit amount reflects the net result of all of those transactions.

[Fearchar]

The credit along with that in Vanguard Federal Money Market Fund (Settlement Fund) is available for trade.
However, the credit amount is not available to be withdrawn.

[habsui]

Apr 19, 2023 0:19:00 GMT Fearchar said:

The credit along with that in Vanguard Federal Money Market Fund (Settlement Fund) is available for trade.
However, the credit amount is not available to be withdrawn.

As it should be. This is the same everywhere else. I believe you can only buy VG funds with non settled proceeds.

[Fearchar]

Probably at Vanguard you can not, but etrade or similar probably would.

Also, if I were to buy VFMXX right away, it would probably show up as a separate holding. Maybe I would get a day or 2 more income... do not really know. The amount is not enough for me to fret about


I am just glad to have less in the credit union as their savings account was paying only about 0.5%.

[yogibearbull]

It seems that the issue has been resolved.

Basically, one should use ("Transfer funds to Vanguard" option and then there is a click for the core/settlement VMFXX.

If you use Buy VMFXX, then a NEW position in VMFXX will be established (i.e. core/settlement VMFXX won't be involved). Similar for Exchange - core/settlement won't even show among the options shown, but you can force VMFXX purchase and that will be treated as a separate fund.

This is not just at VG, but also at Fido (although Buy/Sell default to core/settlement), Schwab. It's most confusing when switching from mutual funds a/c to brokerage a/c - in mutual fund a/c, as there is no core/settlement fund, EVERYTHING is Buy/Sell/Exchange.