MM fund interest starts on what date?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
zeugmite
Posts: 1057
Joined: Tue Jul 22, 2008 11:48 pm

MM fund interest starts on what date?

Post by zeugmite » Fri Nov 16, 2018 3:11 pm

Not sure if this is answered, but do MM funds start earning interest on the trade date or the settlement date?

Likewise when do they stop earning interest?

alex_686
Posts: 4019
Joined: Mon Feb 09, 2015 2:39 pm

Re: MM fund interest starts on what date?

Post by alex_686 » Fri Nov 16, 2018 3:24 pm

Settlement Date.

zeugmite
Posts: 1057
Joined: Tue Jul 22, 2008 11:48 pm

Re: MM fund interest starts on what date?

Post by zeugmite » Sun Nov 18, 2018 3:42 pm

It turns out it is neither. MM fund settlement is apparently on the same day as the purchase or redemption date (T+0), but interest starts and stops accruing generally with a one business day delay (day after purchase/settlement), and appears consistent with when money changes hands. In other words, on the settlement day the money hasn't moved yet but on the next business day it moves. So there is no positive or negative float.

https://personal.vanguard.com/pub/Pdf/p030.pdf under "Earning Dividends"

This checks out with what happens at Fidelity as well.

Post Reply