$300k Cash - Where to put for 3 months?

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cbr shadow
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$300k Cash - Where to put for 3 months?

Post by cbr shadow »

I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
muffins14
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Re: $300k Cash - Where to put for 3 months?

Post by muffins14 »

Depends on your tax bracket

If it were me, I’d put in in whatever money market has the highest after-tax return, like a treasury money market or muni money market
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pizzy
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Re: $300k Cash - Where to put for 3 months?

Post by pizzy »

cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
I don't think you can pick the wrong savings account/money market with a 3 month time horizon. I'd just put it wherever you already have an account.
Vanguard/Fidelity | 76% US Stock | 16% Int'l Stock | 8% Cash
Topic Author
cbr shadow
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Re: $300k Cash - Where to put for 3 months?

Post by cbr shadow »

pizzy wrote: Thu May 04, 2023 11:19 am
cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
I don't think you can pick the wrong savings account/money market with a 3 month time horizon. I'd just put it wherever you already have an account.
Excuse my ignorance but I'm not sure what a money market account is. We use Chase for checking accounts and use Vanguard for all investments.
pizzy
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Re: $300k Cash - Where to put for 3 months?

Post by pizzy »

cbr shadow wrote: Thu May 04, 2023 11:26 am
pizzy wrote: Thu May 04, 2023 11:19 am
cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
I don't think you can pick the wrong savings account/money market with a 3 month time horizon. I'd just put it wherever you already have an account.
Excuse my ignorance but I'm not sure what a money market account is. We use Chase for checking accounts and use Vanguard for all investments.
The wiki knows all: https://www.bogleheads.org/wiki/Money_m ... arket_fund

Transfer to Vanguard and stick in their money market. Others can advise which MM at Vanguard is "best". Again, it's not going to matter with a 3 month time horizon.
Last edited by pizzy on Thu May 04, 2023 11:29 am, edited 1 time in total.
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Tom_T
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Re: $300k Cash - Where to put for 3 months?

Post by Tom_T »

cbr shadow wrote: Thu May 04, 2023 11:26 am
pizzy wrote: Thu May 04, 2023 11:19 am
cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
I don't think you can pick the wrong savings account/money market with a 3 month time horizon. I'd just put it wherever you already have an account.
Excuse my ignorance but I'm not sure what a money market account is. We use Chase for checking accounts and use Vanguard for all investments.
On Vanguard, VUSXX is one such fund. They have others.
peteyboy
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Re: $300k Cash - Where to put for 3 months?

Post by peteyboy »

cbr shadow wrote: Thu May 04, 2023 11:26 am
pizzy wrote: Thu May 04, 2023 11:19 am
cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
I don't think you can pick the wrong savings account/money market with a 3 month time horizon. I'd just put it wherever you already have an account.
Excuse my ignorance but I'm not sure what a money market account is. We use Chase for checking accounts and use Vanguard for all investments.
Move the money into Vanguard and let it sit there. The settlement fund (VMFXX) is a money market fund - currently paying about 4.75%. See the link below.

https://investor.vanguard.com/investmen ... file/vmfxx

If you wanted, you could also put it in VUSXX (Vanguard Treasury money market fund). You'd save a some on state taxes on VUSXX vs VMFXX, depending on what state you live in.
swylie
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Re: $300k Cash - Where to put for 3 months?

Post by swylie »

If you have a taxable account at Vanguard, you can stash all the money into your settlement fund VMFXX Federal Money Market. Current SEC yield is 4.77% which is pretty competitive with any high yield savings account. Only consideration might be that VMFXX is not FDIC insured and also the risk if Congress doesn't resolve the debt ceiling issue who knows what will happen to money markets (or the whole economy) in the short term. Do you have a large mattress?

Chase might also have a high yield savings account where you could put it, just make sure you read the fine print.
maze1on1
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Re: $300k Cash - Where to put for 3 months?

Post by maze1on1 »

I would just buy a 13 week treasury bill. You can get around 5.3% and it is guaranteed. That would give you around $4,200 in interest and still allow you to sleep at night in these markets. Disclaimer, I am 100% invested in short term t-bills.
Last edited by maze1on1 on Thu May 04, 2023 11:44 am, edited 1 time in total.
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Chip Munk
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Re: $300k Cash - Where to put for 3 months?

Post by Chip Munk »

cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something.
Given you wrote "I" and not "We", keep in mind the FDIC insurance on an individual account is limited to $250,000.
Topic Author
cbr shadow
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Re: $300k Cash - Where to put for 3 months?

Post by cbr shadow »

Tom_T wrote: Thu May 04, 2023 11:28 am
cbr shadow wrote: Thu May 04, 2023 11:26 am
pizzy wrote: Thu May 04, 2023 11:19 am
cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
I don't think you can pick the wrong savings account/money market with a 3 month time horizon. I'd just put it wherever you already have an account.
Excuse my ignorance but I'm not sure what a money market account is. We use Chase for checking accounts and use Vanguard for all investments.
On Vanguard, VUSXX is one such fund. They have others.
Just so that I'm clear, I can 'purchase' VUSXX in my taxable brokerage account with the plans to sell it a couple months from now. Is that right?
Topic Author
cbr shadow
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Re: $300k Cash - Where to put for 3 months?

Post by cbr shadow »

swylie wrote: Thu May 04, 2023 11:38 am If you have a taxable account at Vanguard, you can stash all the money into your settlement fund VMFXX Federal Money Market. Current SEC yield is 4.77% which is pretty competitive with any high yield savings account. Only consideration might be that VMFXX is not FDIC insured and also the risk if Congress doesn't resolve the debt ceiling issue who knows what will happen to money markets (or the whole economy) in the short term. Do you have a large mattress?

Chase might also have a high yield savings account where you could put it, just make sure you read the fine print.
Sorry for the newbie question here, but how do I purchase directly into the settlement fund? I've moved the ~$300k from my Vanguard brokerage account to my Chase checking account, but I'd like to put it into VUSXX. Do I make a purchase through the Brokerage account, or does it need to be sitting in my settlement account? If it needs to be in the settlement account how do I make that purchase in Vanguard? I'm wondering because I notice that the purchase screen doesn't have a settlement account option.
Tom_T
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Re: $300k Cash - Where to put for 3 months?

Post by Tom_T »

cbr shadow wrote: Fri Jun 02, 2023 3:45 pm
Tom_T wrote: Thu May 04, 2023 11:28 am
cbr shadow wrote: Thu May 04, 2023 11:26 am
pizzy wrote: Thu May 04, 2023 11:19 am
cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
I don't think you can pick the wrong savings account/money market with a 3 month time horizon. I'd just put it wherever you already have an account.
Excuse my ignorance but I'm not sure what a money market account is. We use Chase for checking accounts and use Vanguard for all investments.
On Vanguard, VUSXX is one such fund. They have others.
Just so that I'm clear, I can 'purchase' VUSXX in my taxable brokerage account with the plans to sell it a couple months from now. Is that right?
Yes.
Tom_T
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Re: $300k Cash - Where to put for 3 months?

Post by Tom_T »

cbr shadow wrote: Fri Jun 02, 2023 3:49 pm
swylie wrote: Thu May 04, 2023 11:38 am If you have a taxable account at Vanguard, you can stash all the money into your settlement fund VMFXX Federal Money Market. Current SEC yield is 4.77% which is pretty competitive with any high yield savings account. Only consideration might be that VMFXX is not FDIC insured and also the risk if Congress doesn't resolve the debt ceiling issue who knows what will happen to money markets (or the whole economy) in the short term. Do you have a large mattress?

Chase might also have a high yield savings account where you could put it, just make sure you read the fine print.
Sorry for the newbie question here, but how do I purchase directly into the settlement fund? I've moved the ~$300k from my Vanguard brokerage account to my Chase checking account, but I'd like to put it into VUSXX. Do I make a purchase through the Brokerage account, or does it need to be sitting in my settlement account? If it needs to be in the settlement account how do I make that purchase in Vanguard? I'm wondering because I notice that the purchase screen doesn't have a settlement account option.
The money is at Chase? First you need to transfer it to the settlement fund. Then...

https://investor.vanguard.com/investor- ... ent%20fund.
Topic Author
cbr shadow
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Re: $300k Cash - Where to put for 3 months?

Post by cbr shadow »

Tom_T wrote: Fri Jun 02, 2023 4:19 pm
cbr shadow wrote: Fri Jun 02, 2023 3:49 pm
swylie wrote: Thu May 04, 2023 11:38 am If you have a taxable account at Vanguard, you can stash all the money into your settlement fund VMFXX Federal Money Market. Current SEC yield is 4.77% which is pretty competitive with any high yield savings account. Only consideration might be that VMFXX is not FDIC insured and also the risk if Congress doesn't resolve the debt ceiling issue who knows what will happen to money markets (or the whole economy) in the short term. Do you have a large mattress?

Chase might also have a high yield savings account where you could put it, just make sure you read the fine print.
Sorry for the newbie question here, but how do I purchase directly into the settlement fund? I've moved the ~$300k from my Vanguard brokerage account to my Chase checking account, but I'd like to put it into VUSXX. Do I make a purchase through the Brokerage account, or does it need to be sitting in my settlement account? If it needs to be in the settlement account how do I make that purchase in Vanguard? I'm wondering because I notice that the purchase screen doesn't have a settlement account option.
The money is at Chase? First you need to transfer it to the settlement fund. Then...

https://investor.vanguard.com/investor- ... ent%20fund.
I think my disconnect here is that when I go to make the purchase there's not an option for putting the money in a settlement fund. I have to pick an account to buy it from, which I believe should be my taxable brokerage account, but I want to confirm that I'm not doing something dumb by putting it in that account buying VUSXX.
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ruralavalon
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Re: $300k Cash - Where to put for 3 months?

Post by ruralavalon »

cbr shadow wrote: Thu May 04, 2023 11:26 am
pizzy wrote: Thu May 04, 2023 11:19 am
cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
I don't think you can pick the wrong savings account/money market with a 3 month time horizon. I'd just put it wherever you already have an account.
Excuse my ignorance but I'm not sure what a money market account is. We use Chase for checking accounts and use Vanguard for all investments.
Vanguard Money Market Funds, you can get a 5% yield.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Charles Joseph
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Re: $300k Cash - Where to put for 3 months?

Post by Charles Joseph »

Three-month T-Bills.
"The big money is not in the buying and selling, but in the waiting." - Charles Munger
chassis
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Re: $300k Cash - Where to put for 3 months?

Post by chassis »

cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
3 month Treasury or FZDXX money market at Fidelity.
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Chip Munk
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Re: $300k Cash - Where to put for 3 months?

Post by Chip Munk »

cbr shadow wrote: Sat Jun 03, 2023 10:17 am
Tom_T wrote: Fri Jun 02, 2023 4:19 pm
cbr shadow wrote: Fri Jun 02, 2023 3:49 pm
swylie wrote: Thu May 04, 2023 11:38 am If you have a taxable account at Vanguard, you can stash all the money into your settlement fund VMFXX Federal Money Market. Current SEC yield is 4.77% which is pretty competitive with any high yield savings account. Only consideration might be that VMFXX is not FDIC insured and also the risk if Congress doesn't resolve the debt ceiling issue who knows what will happen to money markets (or the whole economy) in the short term. Do you have a large mattress?

Chase might also have a high yield savings account where you could put it, just make sure you read the fine print.
Sorry for the newbie question here, but how do I purchase directly into the settlement fund? I've moved the ~$300k from my Vanguard brokerage account to my Chase checking account, but I'd like to put it into VUSXX. Do I make a purchase through the Brokerage account, or does it need to be sitting in my settlement account? If it needs to be in the settlement account how do I make that purchase in Vanguard? I'm wondering because I notice that the purchase screen doesn't have a settlement account option.
The money is at Chase? First you need to transfer it to the settlement fund. Then...

https://investor.vanguard.com/investor- ... ent%20fund.
I think my disconnect here is that when I go to make the purchase there's not an option for putting the money in a settlement fund. I have to pick an account to buy it from, which I believe should be my taxable brokerage account, but I want to confirm that I'm not doing something dumb by putting it in that account buying VUSXX.
When you transfer money into your taxable brokerage account, it is deposited into your settlement fund. It's been a while since I've done this -- look for an option to transfer funds to Vanguard from an outside account.

Edited to add: I just took a look in my Vanguard account. Under "Holdings", scroll down to your taxable account. Over on the right, click on the three dots next to "Transfer money". Select "I'll send Vanguard money". In the next screen, your settlement fund should be one of the funds listed under "Where's the money going?". You can also select a different fund already in your account or add a new fund.
HomeStretch
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Re: $300k Cash - Where to put for 3 months?

Post by HomeStretch »

Are you planning to do the wire for the house purchase from Chase or Vanguard? I’d probably park the funds at that institution.
the_wiki
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Re: $300k Cash - Where to put for 3 months?

Post by the_wiki »

Personally, with only 3 months and knowing I really need this money at closing time, I'd just leave it where it is.
bltn
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Re: $300k Cash - Where to put for 3 months?

Post by bltn »

With your Vanguard account, you re already affiliated with the brokerage that offers the highest money market account rates or very close to it. Leave the money in the settlement fund attached to your Vanguard Brokerage account. When you need the funds transfer them to your bank checking account.

Simple.
CuriousGeorgeTx
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Re: $300k Cash - Where to put for 3 months?

Post by CuriousGeorgeTx »

Open an account at Treasurydirect.gov and buy 13 week T Bills.
bradinsky
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Re: $300k Cash - Where to put for 3 months?

Post by bradinsky »

bltn wrote: Sun Jun 04, 2023 8:08 pm With your Vanguard account, you re already affiliated with the brokerage that offers the highest money market account rates or very close to it. Leave the money in the settlement fund attached to your Vanguard Brokerage account. When you need the funds transfer them to your bank checking account.

Simple.
Does the settlement account at Vanguard pay the same rate as their MMA?
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tetractys
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Re: $300k Cash - Where to put for 3 months?

Post by tetractys »

cbr shadow wrote: Thu May 04, 2023 11:11 am I have $300k in cash that I'm going to be using to purchase a home August 1st. I'm wondering if I should put that in a high yield savings account or something. I want to be sure I'm being smart about what I do with the cash even with such a short time period.
If it should go into a high yield savings account, where do you recommend I open an account? Do high yield savings accounts have a minimum time period that you have to have the money there for? For example is there small print that says I need to have at least $100k in the account for 12 months or similar?
It sounds like your at Vanguard? I suggest you call them, tell them your situation, and instruct them to find you the best interest. Sorry this forum can't do that for you.
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NateH
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Re: $300k Cash - Where to put for 3 months?

Post by NateH »

bradinsky wrote: Sun Jun 04, 2023 9:04 pm
bltn wrote: Sun Jun 04, 2023 8:08 pm With your Vanguard account, you re already affiliated with the brokerage that offers the highest money market account rates or very close to it. Leave the money in the settlement fund attached to your Vanguard Brokerage account. When you need the funds transfer them to your bank checking account.

Simple.
Does the settlement account at Vanguard pay the same rate as their MMA?
Your VG settlement account IS a money market fund. VMFXX is currently yielding 5%.
If you would like a different money market fund, such as VUSXX or VMSXX, it can be purchased with the money in your settlement account simply by placing a buy order for the fund you want and shares will be held in your same brokerage account.
4X top-twenty S&P 500 prognosticator. I'd start a newsletter, but it would only have one issue per year. | dumb investor during 1999 tech bubble, current slice & dicer.
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ruralavalon
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Re: $300k Cash - Where to put for 3 months?

Post by ruralavalon »

bradinsky wrote: Sun Jun 04, 2023 9:04 pm
bltn wrote: Sun Jun 04, 2023 8:08 pm With your Vanguard account, you re already affiliated with the brokerage that offers the highest money market account rates or very close to it. Leave the money in the settlement fund attached to your Vanguard Brokerage account. When you need the funds transfer them to your bank checking account.

Simple.
Does the settlement account at Vanguard pay the same rate as their MMA?
Their settlement is a money market fund, specifically Vanguard Federal Money Market Fund (VMFXX).

Vanguard Money Market Funds.

VMFXX currently has a SEC Yield = 5.04%
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
bradinsky
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Re: $300k Cash - Where to put for 3 months?

Post by bradinsky »

ruralavalon wrote: Mon Jun 05, 2023 9:17 am
bradinsky wrote: Sun Jun 04, 2023 9:04 pm
bltn wrote: Sun Jun 04, 2023 8:08 pm With your Vanguard account, you re already affiliated with the brokerage that offers the highest money market account rates or very close to it. Leave the money in the settlement fund attached to your Vanguard Brokerage account. When you need the funds transfer them to your bank checking account.

Simple.
Does the settlement account at Vanguard pay the same rate as their MMA?
Their settlement is a money market fund, specifically Vanguard Federal Money Market Fund (VMFXX).

Vanguard Money Market Funds.

VMFXX currently has a SEC Yield = 5.04%
Thank you! Curious Schwab client
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ruralavalon
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Re: $300k Cash - Where to put for 3 months?

Post by ruralavalon »

bradinsky wrote: Mon Jun 05, 2023 6:17 pm
ruralavalon wrote: Mon Jun 05, 2023 9:17 am
bradinsky wrote: Sun Jun 04, 2023 9:04 pm
bltn wrote: Sun Jun 04, 2023 8:08 pm With your Vanguard account, you re already affiliated with the brokerage that offers the highest money market account rates or very close to it. Leave the money in the settlement fund attached to your Vanguard Brokerage account. When you need the funds transfer them to your bank checking account.

Simple.
Does the settlement account at Vanguard pay the same rate as their MMA?
Their settlement is a money market fund, specifically Vanguard Federal Money Market Fund (VMFXX).

Vanguard Money Market Funds.

VMFXX currently has a SEC Yield = 5.04%
Thank you! Curious Schwab client
Lower yields (4.53-4.92%) on the Schwab money market funds with low/no minimums.

Schwab Money Market Funds
bradinsky
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Re: $300k Cash - Where to put for 3 months?

Post by bradinsky »

ruralavalon wrote: Mon Jun 05, 2023 6:53 pm
bradinsky wrote: Mon Jun 05, 2023 6:17 pm
ruralavalon wrote: Mon Jun 05, 2023 9:17 am
bradinsky wrote: Sun Jun 04, 2023 9:04 pm
bltn wrote: Sun Jun 04, 2023 8:08 pm With your Vanguard account, you re already affiliated with the brokerage that offers the highest money market account rates or very close to it. Leave the money in the settlement fund attached to your Vanguard Brokerage account. When you need the funds transfer them to your bank checking account.

Simple.
Does the settlement account at Vanguard pay the same rate as their MMA?
Their settlement is a money market fund, specifically Vanguard Federal Money Market Fund (VMFXX).

Vanguard Money Market Funds.

VMFXX currently has a SEC Yield = 5.04%
Thank you! Curious Schwab client
Lower yields on Schwab money market funds with low/no minimums.

Schwab Money Market Funds
Thanks! We’re actually in SWVXX at Schwab & happy with it. I was not aware that the settlement account was actually a MMF.
bltn
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Re: $300k Cash - Where to put for 3 months?

Post by bltn »

bradinsky wrote: Sun Jun 04, 2023 9:04 pm
bltn wrote: Sun Jun 04, 2023 8:08 pm With your Vanguard account, you re already affiliated with the brokerage that offers the highest money market account rates or very close to it. Leave the money in the settlement fund attached to your Vanguard Brokerage account. When you need the funds transfer them to your bank checking account.

Simple.
Does the settlement account at Vanguard pay the same rate as their MMA?
Their settlement account is one of their severall money market acvounts. All pay about the same.

Edit: posted when looking at my account responses, before I looked at other thread posts made before this in answer to your question.
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