{"id":436,"date":"2007-04-08T18:35:18","date_gmt":"2007-04-08T23:35:18","guid":{"rendered":"https:\/\/stockherd.com\/blog\/?p=436"},"modified":"2011-01-17T18:36:19","modified_gmt":"2011-01-17T23:36:19","slug":"parking-your-safe-money-2","status":"publish","type":"post","link":"https:\/\/stockherd.com\/blog\/?p=436","title":{"rendered":"Parking Your Safe Money"},"content":{"rendered":"<p>This is a response to a question by one of my young adult children.  She was looking for a place to put some safe money (i.e., funds that she might need in the next 1-3 years) and wanted to obtain a better rate of interest than that offered by her bank.<\/p>\n<p>Vanguard Money market funds are a good place to park money that you  may need in the next 1-3 years.\u00c2\u00a0  At at low tax bracket, I would not  worry about finding a tax-free fund.\u00c2\u00a0  Tax free money market funds don&#8217;t  become advantageous until you reach the 28% tax bracket or higher.\u00c2\u00a0   You can ask Vanguard for a check book for your money market account and  redeem shares by check.  However, the check has to be $250 or more.<\/p>\n<p>Here are three suggestions.  The fund are listed with the safest  funds first.  The spread between the Treasury-based fund and the prime  rate fund is very small.  It comes out to about a $25 per year  difference on $10,000.  So you might want to stay with safety (either  Treasury or Federal).  That way if the world goes nuts, your funds will  be secure.<\/p>\n<p><a href=\"https:\/\/flagship.vanguard.com\/VGApp\/hnw\/FundsSnapshot?FundId=0050&amp;FundIntExt=INT\" target=\"_blank\"><img decoding=\"async\" title=\"More...\" src=\"..\/..\/mic\/wp-includes\/js\/tinymce\/plugins\/wordpress\/img\/trans.gif\" alt=\"\" \/> Vanguard Treasury Money Market Fund<\/a> (VMPXX).  It is currently yielding 4.84%.<\/p>\n<p><span style=\"text-decoration: underline;\">Description<\/span>:  The  Fund invests solely in high-quality, short-term money market securities  whose interest and principal payments are backed by the full faith and  credit of the U.S. government.  At least 80% of the Fund&#8217;s assets will always be invested in U.S.  Treasury securities; the remainder of the assets may be invested in  securities issued by U.S. governmental agencies.  The Fund maintains a  dollar-weighted average maturity of 90 days or less.<\/p>\n<p><a href=\"https:\/\/flagship.vanguard.com\/VGApp\/hnw\/FundsSnapshot?FundId=0033&amp;FundIntExt=INT\" target=\"_blank\">Vanguard Federal Money Market Fund<\/a> (VMFXX).  It is currently yielding 5.06%.<br \/>\n<span style=\"text-decoration: underline;\"><span style=\"text-decoration: underline;\"><br \/>\n<\/span>Description<\/span>:  The Fund invests primarily in  high-quality, short-term money market instruments. At least 80% of the  Fund&#8217;s assets are invested in securities issued by the U.S. government and its agencies and instrumentalities.  Although these securities are high-quality, most of the securities held by the Fund are neither guaranteed by the U.S.  Treasury nor supported by the full faith and credit of the U.S.  government.  To be considered high-quality, a security generally must be  rated in one of the two highest credit-quality  categories for short-term securities by at least two nationally  recognized rating services (or by one, if only one rating service has  rated the security).  The Fund maintains a dollar-weighted average maturity of 90 days or less.<\/p>\n<p><a href=\"https:\/\/flagship.vanguard.com\/VGApp\/hnw\/FundsSnapshot?FundId=0030&amp;FundIntExt=INT\" target=\"_blank\"> Vanguard Prime Money Market Fund<\/a> (VMMXX).  It is currently yielding 5.09%.<span style=\"text-decoration: underline;\"><span style=\"text-decoration: underline;\"><span style=\"text-decoration: underline;\"><\/span><\/span><\/span><\/p>\n<p>Description:  The Fund invests primarily in high-quality, short-term  money market instruments, including certificates of deposit, banker&#8217;s  acceptances, commercial paper, and other money  market securities. To be considered high-quality, a security generally  must be rated in one of the two highest credit-quality categories for  short-term securities by at least  two nationally recognized rating services (or by one, if only one  rating service has rated the security). If unrated, the security must be  determined by Vanguard to be of  quality equivalent to securities in the two highest credit-quality  categories. The Fund invests more than 25% of its assets in securities  issued by companies in the financial services industry. The Fund  maintains a dollar-weighted average maturity of 90 days or less.<\/p>\n<p>The expense ratio is 0.29%.  Other mutual fund families have similar offerings.  For example, see Fidelity&#8217;s <a href=\"http:\/\/personal.fidelity.com\/products\/funds\/funds_frame.shtml.cvsr\">offerings<\/a>.   Since Vanguard is the only large mutual fund family that is owned by  its share holders, I tend to prefer it.  Vanguard also offers some of  the best index funds and exchange traded funds (ETFs) available.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This is a response to a question by one of my young adult children. She was looking for a place to put some safe money (i.e., funds that she might need in the next 1-3 years) and wanted to obtain a better rate of interest than that offered by her bank. Vanguard Money market funds [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,3],"tags":[],"class_list":["post-436","post","type-post","status-publish","format-standard","hentry","category-etfs","category-investing"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/436","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=436"}],"version-history":[{"count":1,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/436\/revisions"}],"predecessor-version":[{"id":437,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/436\/revisions\/437"}],"wp:attachment":[{"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=436"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=436"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockherd.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=436"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}