Vanguard Money Market (VMMXX)

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TerribleGolfer
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Joined: Fri Jun 28, 2019 12:18 pm

Vanguard Money Market (VMMXX)

Post by TerribleGolfer » Fri Jun 28, 2019 12:31 pm

How does this fund make its interest payments?

Does it payout every month?

Also - does interest rate risk apply to money market accounts (just talking about the principal amount invested)?

Thanks.

bloom2708
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Re: Vanguard Money Market (VMMXX)

Post by bloom2708 » Fri Jun 28, 2019 2:07 pm

Monthly interest.

The NAV of a Money Market is always (almost) 1.00. You do not have gains and losses. $1 = 1 share.

Interest moves up and down based on interest rate trends.

Vanguard has the Federal Money Market and the Prime Money Market. Also, a few others. The default for your Settlement account is the Federal Money Market.
"People want confirmation, not advice" Unknown | "We are here to provoke thoughtfulness, not agree with you" Unknown | Four words. Whole food, plant based. Bing it.

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sperry8
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Re: Vanguard Money Market (VMMXX)

Post by sperry8 » Fri Jun 28, 2019 2:07 pm

TerribleGolfer wrote:
Fri Jun 28, 2019 12:31 pm
How does this fund make its interest payments?

Does it payout every month?

Also - does interest rate risk apply to money market accounts (just talking about the principal amount invested)?

Thanks.
Welcome to Bogleheads!
Interest earned is paid monthly
BH contest results: 2018: #150 of 493 | 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

Trader Joe
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Re: Vanguard Money Market (VMMXX)

Post by Trader Joe » Fri Jun 28, 2019 4:49 pm

TerribleGolfer wrote:
Fri Jun 28, 2019 12:31 pm
How does this fund make its interest payments?

Does it payout every month?

Also - does interest rate risk apply to money market accounts (just talking about the principal amount invested)?

Thanks.
Welcome to the forum. Yes, the payout is monthly.

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SquawkIdent
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Location: Planet Earth

Re: Vanguard Money Market (VMMXX)

Post by SquawkIdent » Fri Jun 28, 2019 5:35 pm

TerribleGolfer wrote:
Fri Jun 28, 2019 12:31 pm
How does this fund make its interest payments?

Does it payout every month?

Also - does interest rate risk apply to money market accounts (just talking about the principal amount invested)?

Thanks.
Tonight. :sharebeer

lukestuckenhymer
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Joined: Wed May 30, 2018 11:53 am

Re: Vanguard Money Market (VMMXX)

Post by lukestuckenhymer » Fri Jun 28, 2019 5:56 pm

A small semantic detail: though it's interest for all intents and purposes, it's categorized as a "dividend" and you'll receive a 1099-DIV. Either way, it's taxed as ordinary income.

rasta
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Re: Vanguard Money Market (VMMXX)

Post by rasta » Fri Jun 28, 2019 6:20 pm

interest is earned daily, but paid at least monthly. you will get an interest payment off cycle if you move all funds out.

yoyo6713
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Re: Vanguard Money Market (VMMXX)

Post by yoyo6713 » Fri Jun 28, 2019 7:48 pm

I have some cash parked in a roth ira and they are all in VMMXX for a month and two. I actually noticed my balance goes down in several occasions last month and this month. Does anyone know why?

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grabiner
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Re: Vanguard Money Market (VMMXX)

Post by grabiner » Fri Jun 28, 2019 8:52 pm

yoyo6713 wrote:
Fri Jun 28, 2019 7:48 pm
I have some cash parked in a roth ira and they are all in VMMXX for a month and two. I actually noticed my balance goes down in several occasions last month and this month. Does anyone know why?
Are you paying a low-balance fee (which Vanguard charges for investors who receive paper statements and who have assets under $50,000)?
Wiki David Grabiner

MotoTrojan
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Re: Vanguard Money Market (VMMXX)

Post by MotoTrojan » Fri Jun 28, 2019 9:23 pm

yoyo6713 wrote:
Fri Jun 28, 2019 7:48 pm
I have some cash parked in a roth ira and they are all in VMMXX for a month and two. I actually noticed my balance goes down in several occasions last month and this month. Does anyone know why?
Curious why you’re holding cash in a Roth...?

yoyo6713
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Re: Vanguard Money Market (VMMXX)

Post by yoyo6713 » Fri Jun 28, 2019 9:34 pm

MotoTrojan wrote:
Fri Jun 28, 2019 9:23 pm
yoyo6713 wrote:
Fri Jun 28, 2019 7:48 pm
I have some cash parked in a roth ira and they are all in VMMXX for a month and two. I actually noticed my balance goes down in several occasions last month and this month. Does anyone know why?
Curious why you’re holding cash in a Roth...?
Trying to figure out what to buy and trying to decide if I should retire. I am 85% cash.

yoyo6713
Posts: 42
Joined: Thu May 10, 2018 8:48 pm

Re: Vanguard Money Market (VMMXX)

Post by yoyo6713 » Fri Jun 28, 2019 9:36 pm

grabiner wrote:
Fri Jun 28, 2019 8:52 pm
yoyo6713 wrote:
Fri Jun 28, 2019 7:48 pm
I have some cash parked in a roth ira and they are all in VMMXX for a month and two. I actually noticed my balance goes down in several occasions last month and this month. Does anyone know why?
Are you paying a low-balance fee (which Vanguard charges for investors who receive paper statements and who have assets under $50,000)?
Nope as it is over 100K. Talked to vanguard flagship and they didn't see it so next time I see it I will talk to them.

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MNGopher
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Re: Vanguard Money Market (VMMXX)

Post by MNGopher » Fri Jun 28, 2019 10:38 pm

yoyo6713 wrote:
Fri Jun 28, 2019 9:34 pm
MotoTrojan wrote:
Fri Jun 28, 2019 9:23 pm
yoyo6713 wrote:
Fri Jun 28, 2019 7:48 pm
I have some cash parked in a roth ira and they are all in VMMXX for a month and two. I actually noticed my balance goes down in several occasions last month and this month. Does anyone know why?
Curious why you’re holding cash in a Roth...?
Trying to figure out what to buy and trying to decide if I should retire. I am 85% cash.
The beauty of a Roth IRA is you won't be taxed on any gains. By holding cash in a Roth you won't have any gains to speak of so you are defeating the purpose of having that account in the first place. Even if you retire you should keep your highest risk/reward investments in the Roth. Keep cash or cash equivalents in money markets, CD's, or regular bank savings accounts for your short term needs.

yoyo6713
Posts: 42
Joined: Thu May 10, 2018 8:48 pm

Re: Vanguard Money Market (VMMXX)

Post by yoyo6713 » Sat Jun 29, 2019 5:16 am

MNGopher wrote:
Fri Jun 28, 2019 10:38 pm
yoyo6713 wrote:
Fri Jun 28, 2019 9:34 pm
MotoTrojan wrote:
Fri Jun 28, 2019 9:23 pm
yoyo6713 wrote:
Fri Jun 28, 2019 7:48 pm
I have some cash parked in a roth ira and they are all in VMMXX for a month and two. I actually noticed my balance goes down in several occasions last month and this month. Does anyone know why?
Curious why you’re holding cash in a Roth...?
Trying to figure out what to buy and trying to decide if I should retire. I am 85% cash.
The beauty of a Roth IRA is you won't be taxed on any gains. By holding cash in a Roth you won't have any gains to speak of so you are defeating the purpose of having that account in the first place. Even if you retire you should keep your highest risk/reward investments in the Roth. Keep cash or cash equivalents in money markets, CD's, or regular bank savings accounts for your short term needs.
You are probably right that I should never keep cash in the roth ira but it is a very small account. You forgot that by holding cash in a Roth (short term) I won't have any loss to speak of either.

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MNGopher
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Location: Minnesota

Re: Vanguard Money Market (VMMXX)

Post by MNGopher » Sat Jun 29, 2019 6:23 am

yoyo6713 wrote:
Sat Jun 29, 2019 5:16 am
MNGopher wrote:
Fri Jun 28, 2019 10:38 pm
yoyo6713 wrote:
Fri Jun 28, 2019 9:34 pm
MotoTrojan wrote:
Fri Jun 28, 2019 9:23 pm
yoyo6713 wrote:
Fri Jun 28, 2019 7:48 pm
I have some cash parked in a roth ira and they are all in VMMXX for a month and two. I actually noticed my balance goes down in several occasions last month and this month. Does anyone know why?
Curious why you’re holding cash in a Roth...?
Trying to figure out what to buy and trying to decide if I should retire. I am 85% cash.
The beauty of a Roth IRA is you won't be taxed on any gains. By holding cash in a Roth you won't have any gains to speak of so you are defeating the purpose of having that account in the first place. Even if you retire you should keep your highest risk/reward investments in the Roth. Keep cash or cash equivalents in money markets, CD's, or regular bank savings accounts for your short term needs.
You are probably right that I should never keep cash in the roth ira but it is a very small account. You forgot that by holding cash in a Roth (short term) I won't have any loss to speak of either.
Your cash won't take a loss (other than inflation) no matter where you keep it. Roth space is very limited and therefore very valuable. Even if you want to be super conservative with your portfolio, like 15% stock funds/85% cash, you should keep the stocks in your Roth and the cash in other accounts where tax efficiency doesn't matter as much.

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jeffyscott
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Re: Vanguard Money Market (VMMXX)

Post by jeffyscott » Sat Jun 29, 2019 8:41 am

bloom2708 wrote:
Fri Jun 28, 2019 2:07 pm
Vanguard has the Federal Money Market and the Prime Money Market. Also, a few others. The default for your Settlement account is the Federal Money Market.
VMMXX is the prime money market.

Perhaps you meant to say they have Federal and Treasury.
Time is your friend; impulse is your enemy. - John C. Bogle

FOGU
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Re: Vanguard Money Market (VMMXX)

Post by FOGU » Sat Jun 29, 2019 9:17 am

SquawkIdent wrote:
Fri Jun 28, 2019 5:35 pm
TerribleGolfer wrote:
Fri Jun 28, 2019 12:31 pm
How does this fund make its interest payments?

Does it payout every month?

Also - does interest rate risk apply to money market accounts (just talking about the principal amount invested)?

Thanks.
Tonight. :sharebeer
Didn't hit last night.

User avatar
SquawkIdent
Posts: 525
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Location: Planet Earth

Re: Vanguard Money Market (VMMXX)

Post by SquawkIdent » Sat Jun 29, 2019 11:07 am

FOGU wrote:
Sat Jun 29, 2019 9:17 am
SquawkIdent wrote:
Fri Jun 28, 2019 5:35 pm
TerribleGolfer wrote:
Fri Jun 28, 2019 12:31 pm
How does this fund make its interest payments?

Does it payout every month?

Also - does interest rate risk apply to money market accounts (just talking about the principal amount invested)?

Thanks.
Tonight. :sharebeer
Didn't hit last night.
Are you reinvesting or having it deposited to an outside account? If reinvesting then yes it should be in there already. If depositing to an outside account, look for it to be in there on Tuesday.

FOGU
Posts: 262
Joined: Tue Apr 24, 2018 9:41 pm

Re: Vanguard Money Market (VMMXX)

Post by FOGU » Sat Jun 29, 2019 12:50 pm

SquawkIdent wrote:
Sat Jun 29, 2019 11:07 am
FOGU wrote:
Sat Jun 29, 2019 9:17 am
SquawkIdent wrote:
Fri Jun 28, 2019 5:35 pm
TerribleGolfer wrote:
Fri Jun 28, 2019 12:31 pm
How does this fund make its interest payments?

Does it payout every month?

Also - does interest rate risk apply to money market accounts (just talking about the principal amount invested)?

Thanks.
Tonight. :sharebeer
Didn't hit last night.
Are you reinvesting or having it deposited to an outside account? If reinvesting then yes it should be in there already. If depositing to an outside account, look for it to be in there on Tuesday.
Roger that. It is directed to settlement account. Thanks. :sharebeer

Prudence
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Re: Vanguard Money Market (VMMXX)

Post by Prudence » Sat Jun 29, 2019 1:20 pm

TerribleGolfer wrote:
Fri Jun 28, 2019 12:31 pm
How does this fund make its interest payments?

Does it payout every month?

Also - does interest rate risk apply to money market accounts (just talking about the principal amount invested)?

Thanks.
Investors should lose no principal although it is not guaranteed.

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