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Vanguard New York Long-Term Tax-Exempt Fund

Posted: Wed Jul 11, 2018 1:33 pm
by learningLady
Hello All,

I follow boglehead for some years now and love this forum.

I have around 130K in cash which is in Ally Bank account get 1.75%. Rest 580K is in various vanguard funds.
Out of this 580K - around 54K is in VNYTX - vanguard NY tax exempt fund. I live in NY.

I do want feel comfortable having good amount to be in saving account - but since some time I have been wondering of putting more money in VNYTX. Could please somebody recommend if this is a better choice than Ally - 1.75% or I am increasing my risk a lot by moving more money in VNYTX

Thank you in advance.

Re: Vanguard New York Long-Term Tax-Exempt Fund

Posted: Wed Jul 11, 2018 2:19 pm
by JoeRetire
learningLady wrote:
Wed Jul 11, 2018 1:33 pm
since some time I have been wondering of putting more money in VNYTX.
Why VNYTX?

What is your goal with this choice?

Re: Vanguard New York Long-Term Tax-Exempt Fund

Posted: Thu Jul 12, 2018 8:57 am
by learningLady
I save on ny state tax as I live in NY. That was my goal in taxable account.

Re: Vanguard New York Long-Term Tax-Exempt Fund

Posted: Thu Jul 12, 2018 11:24 am
by Rob5TCP
While the credit quality is high (70% AA or better) the duration is 6 1/2 years.
If interest rates rise, the value of the fund most probably will go down.
As long as your ok with interest rate risk; this could be a good choice.

Re: Vanguard New York Long-Term Tax-Exempt Fund

Posted: Thu Jul 12, 2018 12:20 pm
by learningLady
Is there any other option which is better than Ally bank and still be conservative?

Re: Vanguard New York Long-Term Tax-Exempt Fund

Posted: Thu Jul 12, 2018 8:30 pm
by BlackcatCA
Tax exempt muni only makes sense if your federal tax rate is >22-24% and high state tax rate. There are numerous posts about "best cash saving" on the board. You may find it interesting to read a few threads.

Otherwise you may earn more using prime money market fund, which is yielding 2.05% right now, better than Ally. If you need FDIC insurance, there are a few banks offering 2% savings or money market accounts.

Re: Vanguard New York Long-Term Tax-Exempt Fund

Posted: Fri Jul 13, 2018 5:53 am
by learningLady
Yes I am in higher federal tax bracket but i do not know what will happen in 2018 with new tax laws.

NY state tax rate is 6.65%. I will search for other best cash saving in the board.