Amazon Prime Deals - Beat the Inflation!

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Vanguard Federal Money Market Fund offers 4.24% yield and Same Day Accessibility for Stock Investments

 The US interest rates have been stubbornly high for more than 18 months.  In the past, I looked for high-yield savings account or Certificate of Deposits (CD).  I put most of my cash in CDs.  Lesson learned - annual return was only about 5% and money was parked and locked in the CD accounts until accounts matured.  When there was opportunity to invest in a dividend-paying stock, I had no good cash available on-hand.

Fast-forward to the year 2024.  I found an almost equivalently CD-safe altenartive - high-yield money market funds offered by Charles Schwab - Schwab Prime Advantage Money Fund (SWVXX) and Schwab Prime Advantage Money Fund - Ultra Shares (SNAXX).  The money market funds are more risky than CD, yet can become available to you after one business day.


Collecting 5% interest by simply waiting was quite appealing and effortless, until the one-business day delay waiting requirement started to point to the opportunity loss to be able to bottom-fish stock equities.  In late 2023,  looked into money market funds offered by Vanguard Brokerage, as I like Vanguard mutual funds and ETFs.


In my opinion, Vanguard money market funds are the most appealing, because of

  • the funds' low fee
  • the high interest rate return
  • the immediate availability of the money to invest in stock equities - no 1-day wait requirement
  • by default, cash in Vanguard Brokerage account is deposited into Vanguard Federal Money Market Fund automatically.

Here is an example:
  • Say you have $5k in your Vanguard Brokerage Account.  By default, the money is automatically into Vanguard Federal Money Market Fund.
  • On Day 1, you do not know what to buy, thus simply earn interest.
  • On Day 2, you are interested to purchase $2k of ABC shares.  In Vanguard, the Federal Money Market Fund would be available to you on the same business day.  
There is no more 1 business-day wait.

***A catch is that US citizenship is required to open a Vanguard Brokerage account.

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