Prime Money Market vs Federal Money Market?

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Prime Money Market vs Federal Money Market?

Post by vnatale » Tue Sep 12, 2017 7:16 pm

How have you handled Vanguard transferring money from your Prime Money Market accounts to the Federal Money Market accounts in response to the new rules that went into effect about a year ago?

Did you leave it there?

Did you move it back?

Do you, on any kind of regular basis, transfer into the Prime account what gets swept into the Federal account?

Do you so value the increased safety of the Federal account that you accept the lower rate it pays compared to the Prime account?

Any other thoughts on this?



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Re: Prime Money Market vs Federal Money Market?

Post by Artsdoctor » Tue Sep 12, 2017 7:36 pm

The Federal Money Market fund is nothing more than a settlement fund and I keep money there only in transit to somewhere else. The added security means nothing to me.

All of that said, the difference between Federal Money Market and Prime Money Market is very small and I'd only worry about this if I needed to park a very large amount of cash for a while. If you had a lot of cash, then you might want to do the math and see if one of the tax-exempt money market funds would work out better for you.

I doubt very seriously that any of Vanguard's money market funds would "break the buck" but if you're worried, then you can go with a FDIC-insured online account.

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Re: Prime Money Market vs Federal Money Market?

Post by beardsworth » Tue Sep 12, 2017 8:08 pm

It's nearly always a good idea to use that search box at the top of each forum page to see what's already been discussed about a topic.

A search for money market federal prime produces several previous threads which you may find helpful. ... ney+market

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