Vanguard Direct Deposit

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bmelikia
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Vanguard Direct Deposit

Post by bmelikia »

Am I able to set up Direct Deposit “deposits” into a taxable money market fund at Vanguard? Or possibly even a Direct Deposit investment into say. . .the Vanguard Total Stock Marker Index Fund in my taxable account?
"I would rather die with money, than live without it...." - Bogleheads member Ron | | A time to EVALUATE your jitters https://www.bogleheads.org/forum/viewtopic.php?p=1139732#p1139732
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JoMoney
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Re: Vanguard Direct Deposit

Post by JoMoney »

Vanguard Federal Money Market Fund (VMFXX) is the "settlement fund" for any Vanguard brokerage account. That's where your direct deposits or other transfers will automatically go to if you have a brokerage account.

Unless you have an old-style mutual fund only account (which Vanguard has been pushing people out of, into a brokerage account platform), you can't direct deposit into any other fund. You direct deposit into the settlement fund, and then can make purchases of other funds from there.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
exodusNH
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Re: Vanguard Direct Deposit

Post by exodusNH »

bmelikia wrote: Tue May 17, 2022 10:45 pm Am I able to set up Direct Deposit “deposits” into a taxable money market fund at Vanguard? Or possibly even a Direct Deposit investment into say. . .the Vanguard Total Stock Marker Index Fund in my taxable account?
If you own mutual funds on the brokerage platform, you can setup recurring buys for those funds directly from your bank account.
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bmelikia
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Re: Vanguard Direct Deposit

Post by bmelikia »

exodusNH wrote: Tue May 17, 2022 10:59 pm
bmelikia wrote: Tue May 17, 2022 10:45 pm Am I able to set up Direct Deposit “deposits” into a taxable money market fund at Vanguard? Or possibly even a Direct Deposit investment into say. . .the Vanguard Total Stock Marker Index Fund in my taxable account?
If you own mutual funds on the brokerage platform, you can setup recurring buys for those funds directly from your bank account.
Can I set it up so that - for example - $250 goes directly from my employers payroll into my Vanguard account?
"I would rather die with money, than live without it...." - Bogleheads member Ron | | A time to EVALUATE your jitters https://www.bogleheads.org/forum/viewtopic.php?p=1139732#p1139732
Fogbank
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Re: Vanguard Direct Deposit

Post by Fogbank »

bmelikia wrote: Tue May 17, 2022 11:24 pm
Can I set it up so that - for example - $250 goes directly from my employers payroll into my Vanguard account?
Yes. IIRC there is a direct deposit setup process on Vanguard's website which will generate a form with a routing and account # for you to give to your company's payroll office.
johnubc
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Re: Vanguard Direct Deposit

Post by johnubc »

Yes. Profile and account settings -> Banking - Direct Deposit.

This will allow you to set up an account that can be shared with your employer so that they can direct deposit into your account. You then choose to which funds and what percentage is added each time a deposit is made.

This is assuming your employer will allow this direct deposit. My employer allows me to choose two direct deposit accounts for my payroll - so that I can direct a portion of each payroll to my Vanguard investment account and the remainder into my local bank checking account.
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bmelikia
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Re: Vanguard Direct Deposit

Post by bmelikia »

johnubc wrote: Wed May 18, 2022 6:46 am Yes. Profile and account settings -> Banking - Direct Deposit.

This will allow you to set up an account that can be shared with your employer so that they can direct deposit into your account. You then choose to which funds and what percentage is added each time a deposit is made.

This is assuming your employer will allow this direct deposit. My employer allows me to choose two direct deposit accounts for my payroll - so that I can direct a portion of each payroll to my Vanguard investment account and the remainder into my local bank checking account.
Great - thank you for your help!
"I would rather die with money, than live without it...." - Bogleheads member Ron | | A time to EVALUATE your jitters https://www.bogleheads.org/forum/viewtopic.php?p=1139732#p1139732
crefwatch
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Re: Vanguard Direct Deposit

Post by crefwatch »

I'm not telling you not to do this, but I want to observe that you can't make something that is "not a bank" walk, talk, or quack like a bank. I don't "like" Bank of America or Chase, but they do perform certain jobs fairly well.

I had a recent problem with (a deceased parent's) tax extension request. The big-name tax preparer told me I absolutely, positively had to use automatic account withdrawal to pay her very large pre-payment with the extension request. I was still setting up the estate's bank account at Chase, and they told me that for 60 days, it was "probationary" so every check deposit would be held for a week!

The point is, when I called Vanguard to make sure, the human explicitly told me that treating my Vanguard MM check info as if it were a bank account would cause a "fail" then the IRS tried to take the money from the account. It is not like a book of checks at a bank. I'm just pointing out that the opposite movement is not possible, so I think it's a bad practice to treat your Vanguard account in any way like a bank.

Bottom line, I had Vanguard wire the money to Chase, (no delay or hold for Wires) and both Vanguard and Chase waived the wire fees (!), because the account balances were so large. And I used a paper check eventually, when the (late) purely-electronic extension submission was rejected by the accounting firm's software or the IRS.
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bmelikia
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Re: Vanguard Direct Deposit

Post by bmelikia »

crefwatch wrote: Wed May 18, 2022 10:48 am I'm not telling you not to do this, but I want to observe that you can't make something that is "not a bank" walk, talk, or quack like a bank. I don't "like" Bank of America or Chase, but they do perform certain jobs fairly well.

I had a recent problem with (a deceased parent's) tax extension request. The big-name tax preparer told me I absolutely, positively had to use automatic account withdrawal to pay her very large pre-payment with the extension request. I was still setting up the estate's bank account at Chase, and they told me that for 60 days, it was "probationary" so every check deposit would be held for a week!

The point is, when I called Vanguard to make sure, the human explicitly told me that treating my Vanguard MM check info as if it were a bank account would cause a "fail" then the IRS tried to take the money from the account. It is not like a book of checks at a bank. I'm just pointing out that the opposite movement is not possible, so I think it's a bad practice to treat your Vanguard account in any way like a bank.

Bottom line, I had Vanguard wire the money to Chase, (no delay or hold for Wires) and both Vanguard and Chase waived the wire fees (!), because the account balances were so large. And I used a paper check eventually, when the (late) purely-electronic extension submission was rejected by the accounting firm's software or the IRS.
I think I would benefit by "removing myself" from seeing the money hit my traditional checking account and would like the psychological benefit of just never seeing the money in the first place and just know that its going to work for me at Vanguard
"I would rather die with money, than live without it...." - Bogleheads member Ron | | A time to EVALUATE your jitters https://www.bogleheads.org/forum/viewtopic.php?p=1139732#p1139732
johnubc
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Re: Vanguard Direct Deposit

Post by johnubc »

bmelikia wrote: Wed May 18, 2022 11:21 am

I think I would benefit by "removing myself" from seeing the money hit my traditional checking account and would like the psychological benefit of just never seeing the money in the first place and just know that its going to work for me at Vanguard
THIS - exactly - just another deduction and it moves over into my Investment account. Have never had an issue and have even moved employers.
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bmelikia
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Re: Vanguard Direct Deposit

Post by bmelikia »

johnubc wrote: Wed May 18, 2022 4:52 pm
bmelikia wrote: Wed May 18, 2022 11:21 am

I think I would benefit by "removing myself" from seeing the money hit my traditional checking account and would like the psychological benefit of just never seeing the money in the first place and just know that its going to work for me at Vanguard
THIS - exactly - just another deduction and it moves over into my Investment account. Have never had an issue and have even moved employers.
How does your Direct Deposit to Vanguard flow:
1) Does your Direct Deposit go into a Vanguard Money Market fund and then you manually invest it?
2) Does your Direct Deposit go into a Vanguard Money Market fund and then you have auto investments setup to pull from the Money Market Fund and invest into a Vanguard fund every week or so?
3) Does your Direct Deposit go immediately into the Vanguard Mutual Fund of your choice? (Ex: Vanguard Total Stock Market Index Fund, etc.)?
"I would rather die with money, than live without it...." - Bogleheads member Ron | | A time to EVALUATE your jitters https://www.bogleheads.org/forum/viewtopic.php?p=1139732#p1139732
mikejuss
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Re: Vanguard Direct Deposit

Post by mikejuss »

bmelikia wrote: Wed May 18, 2022 11:21 amI think I would benefit by "removing myself" from seeing the money hit my traditional checking account and would like the psychological benefit of just never seeing the money in the first place and just know that its going to work for me at Vanguard
The money from your employer will have to hit your checking (or savings) account before you then send it to Vanguard.

But your desire raises the question: are you maxing out whatever retirement account your employer provides? That's one way to never "see" the money before you invest it.

In my own case, I am able--and do--purchase specific stock and bond funds (VTSAX, etc.) automatically on the first of every month. The money isn't routed through my Money Market Fund.
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8foot7
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Re: Vanguard Direct Deposit

Post by 8foot7 »

mikejuss wrote: Thu May 19, 2022 5:45 pm
bmelikia wrote: Wed May 18, 2022 11:21 amI think I would benefit by "removing myself" from seeing the money hit my traditional checking account and would like the psychological benefit of just never seeing the money in the first place and just know that its going to work for me at Vanguard
The money from your employer will have to hit your checking (or savings) account before you then send it to Vanguard.

But your desire raises the question: are you maxing out whatever retirement account your employer provides? That's one way to never "see" the money before you invest it.

In my own case, I am able--and do--purchase specific stock and bond funds (VTSAX, etc.) automatically on the first of every month. The money isn't routed through my Money Market Fund.
OP is using the Vanguard direct deposit functionality so the money never hits his checking or savings account. That’s the entire point of the thread. It goes straight to Vanguard.
mikejuss
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Re: Vanguard Direct Deposit

Post by mikejuss »

8foot7 wrote: Thu May 19, 2022 6:16 pm
mikejuss wrote: Thu May 19, 2022 5:45 pm
bmelikia wrote: Wed May 18, 2022 11:21 amI think I would benefit by "removing myself" from seeing the money hit my traditional checking account and would like the psychological benefit of just never seeing the money in the first place and just know that its going to work for me at Vanguard
The money from your employer will have to hit your checking (or savings) account before you then send it to Vanguard.

But your desire raises the question: are you maxing out whatever retirement account your employer provides? That's one way to never "see" the money before you invest it.

In my own case, I am able--and do--purchase specific stock and bond funds (VTSAX, etc.) automatically on the first of every month. The money isn't routed through my Money Market Fund.
OP is using the Vanguard direct deposit functionality so the money never hits his checking or savings account. That’s the entire point of the thread. It goes straight to Vanguard.
My apologies. Is this something that an employee sets up through his or her employer? Also, is there any benefit to setting up direct deposit vs automatic investments (from a bank account)?
50% VTSAX | 25% VTIAX | 25% VBTLX (retirement), 25% VTEAX (taxable)
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anon_investor
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Re: Vanguard Direct Deposit

Post by anon_investor »

8foot7 wrote: Thu May 19, 2022 6:16 pm
mikejuss wrote: Thu May 19, 2022 5:45 pm
bmelikia wrote: Wed May 18, 2022 11:21 amI think I would benefit by "removing myself" from seeing the money hit my traditional checking account and would like the psychological benefit of just never seeing the money in the first place and just know that its going to work for me at Vanguard
The money from your employer will have to hit your checking (or savings) account before you then send it to Vanguard.

But your desire raises the question: are you maxing out whatever retirement account your employer provides? That's one way to never "see" the money before you invest it.

In my own case, I am able--and do--purchase specific stock and bond funds (VTSAX, etc.) automatically on the first of every month. The money isn't routed through my Money Market Fund.
OP is using the Vanguard direct deposit functionality so the money never hits his checking or savings account. That’s the entire point of the thread. It goes straight to Vanguard.
So it gets direct deposited into Vanguard and auto invested into say VTSAX?
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8foot7
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Re: Vanguard Direct Deposit

Post by 8foot7 »

anon_investor wrote: Thu May 19, 2022 6:52 pm
8foot7 wrote: Thu May 19, 2022 6:16 pm
mikejuss wrote: Thu May 19, 2022 5:45 pm
bmelikia wrote: Wed May 18, 2022 11:21 amI think I would benefit by "removing myself" from seeing the money hit my traditional checking account and would like the psychological benefit of just never seeing the money in the first place and just know that its going to work for me at Vanguard
The money from your employer will have to hit your checking (or savings) account before you then send it to Vanguard.

But your desire raises the question: are you maxing out whatever retirement account your employer provides? That's one way to never "see" the money before you invest it.

In my own case, I am able--and do--purchase specific stock and bond funds (VTSAX, etc.) automatically on the first of every month. The money isn't routed through my Money Market Fund.
OP is using the Vanguard direct deposit functionality so the money never hits his checking or savings account. That’s the entire point of the thread. It goes straight to Vanguard.
So it gets direct deposited into Vanguard and auto invested into say VTSAX?
I believe that was possible with the old mutual fund platform. Now, with a brokerage account, it hits your settlement fund and you have to manually buy whatever securities you want. But at least the funds are segregated and you have to think twice about transferring cash OUT of Vanguard to your regular banking. (It may be possible to set up automated investing from the settlement account; I just log on every payday and click buy - it takes 2 minutes and that includes the time it takes for me to find my phone so I can put in the two-factor code it texts me.)

This was the simplest way I found to have a 50% savings rate. I split my direct deposit at my employer between checking and Vanguard brokerage, 50% to each. I live on the 50% that gets deposited to my bank account. The other 50% gets invested every two weeks. (Now structuring our life to live on that 50% took some effort, but the plan itself is simple. :happy )
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