Is VCTXX (Ca muni MM) a good place to park money?

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ilan1h
Posts: 803
Joined: Mon Oct 22, 2007 3:40 pm

Is VCTXX (Ca muni MM) a good place to park money?

Post by ilan1h »

I need to park a large amount of cash in a safe fund in vanguard. Currently the cash is in Vang Federal Money market (settlement fund). Would the CA muni MM fund (VCTXX) be a little better for CA residents in hi fed tax brackets to park their cash? The yield seems very similar but it's totally tax free. Not sure if this is even worth the effort.
dkturner
Posts: 1608
Joined: Sun Feb 25, 2007 7:58 pm

Re: Is VCTXX (Ca muni MM) a good place to park money?

Post by dkturner »

ilan1h wrote: Sat Oct 17, 2020 10:55 pm I need to park a large amount of cash in a safe fund in vanguard. Currently the cash is in Vang Federal Money market (settlement fund). Would the CA muni MM fund (VCTXX) be a little better for CA residents in hi fed tax brackets to park their cash? The yield seems very similar but it's totally tax free. Not sure if this is even worth the effort.
Why not take a look at U.S. Treasury Bills? You can buy them at auction through your Vanguard brokerage account. They yield about 1/10 of 1%, are exempt from California state tax and are supported by the full faith and credit of the Treasury. Higher after tax yield and higher quality than the California money market fund.
rkhusky
Posts: 10164
Joined: Thu Aug 18, 2011 8:09 pm

Re: Is VCTXX (Ca muni MM) a good place to park money?

Post by rkhusky »

With an SEC yield of 0.03%, not worth the effort to move from Fed MM, unless you are investing millions.

CD's offer a lot more than that for the ordinary investor.
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