Highest muni mm rates

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txranger
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Highest muni mm rates

Post by txranger » Wed May 02, 2018 3:24 pm

Hi all — which brokerage providest highest muni mm rates — assume vanguard at 1.53? Schwab is at 1.46 or about 10 np lower. And I can’t find anything good for muni mm at Fido — a lot lower. Any recommendations?
Tnx appr

PFInterest
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Re: Highest muni mm rates

Post by PFInterest » Wed May 02, 2018 3:26 pm

They are pretty much the same.

txranger
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Re: Highest muni mm rates

Post by txranger » Wed May 02, 2018 3:28 pm

No Fido is a lot lower at 1.3, unless I m lookin at wrong one. 20 bp is not chump change in my book...

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neurosphere
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Re: Highest muni mm rates

Post by neurosphere » Wed May 02, 2018 4:01 pm

txranger wrote:
Wed May 02, 2018 3:24 pm
Hi all — which brokerage providest highest muni mm rates — assume vanguard at 1.53? Schwab is at 1.46 or about 10 np lower. And I can’t find anything good for muni mm at Fido — a lot lower. Any recommendations?
Tnx appr
Can you clarify exactly what it is you would like a recommendation for? Higher MM yields can only result from two things:

1) low fees (because fees are subtracted from the yield...note that the reported yields are AFTER the subtraction though)
2) higher risk

Do you want a MM fund which is riskier than the ones you've listed?

Also, I see that at least one schwab muni MM fund has fee waivers, without which the yield would be lower. Also note that I have no idea how much difference is allowed between MM funds. That is, how much leeway any one firm has to extend the duration or credit quality in order to "offer" a higher yield than otherwise.

I'm very happy with Vanguard as a muni MM fund provider. :D
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".

Sidney
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Re: Highest muni mm rates

Post by Sidney » Wed May 02, 2018 5:04 pm

txranger wrote:
Wed May 02, 2018 3:28 pm
No Fido is a lot lower at 1.3, unless I m lookin at wrong one. 20 bp is not chump change in my book...
really depends how much you leave lying around idle, I guess.
I always wanted to be a procrastinator.

ZinCO
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Re: Highest muni mm rates

Post by ZinCO » Wed May 02, 2018 5:08 pm

Fidelity's FZEXX is 1.39 today, so better than 1.3 but not as good as Vanguard's. No fee waiver on FZEXX as far as I know.

MnD
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Re: Highest muni mm rates

Post by MnD » Wed May 02, 2018 5:10 pm

neurosphere wrote:
Wed May 02, 2018 4:01 pm
Also, I see that at least one schwab muni MM fund has fee waivers, without which the yield would be lower.
The Schwab MM fee waivers, now applied to most or all of their purchased MM funds (per the prospectus) will be maintained as long as Charles Schwab Investment Management Inc. is the adviser. So I wouldn't hold your breath about those going away.

The investment adviser and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) of each share class to 0.35% for Investor Shares and 0.19% for Ultra Shares for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement).

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neurosphere
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Re: Highest muni mm rates

Post by neurosphere » Thu May 03, 2018 12:46 pm

MnD wrote:
Wed May 02, 2018 5:10 pm
neurosphere wrote:
Wed May 02, 2018 4:01 pm
Also, I see that at least one schwab muni MM fund has fee waivers, without which the yield would be lower.
The Schwab MM fee waivers, now applied to most or all of their purchased MM funds (per the prospectus) will be maintained as long as Charles Schwab Investment Management Inc. is the adviser. So I wouldn't hold your breath about those going away.

The investment adviser and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes and certain non-routine expenses) of each share class to 0.35% for Investor Shares and 0.19% for Ultra Shares for so long as the investment adviser serves as the adviser to the fund (contractual expense limitation agreement).
Good point about the waiver probably not going away. Although it's notable that even with the waiver the fee is "high". I'm not so much worried about the fee jumping in this case, but mostly pointing out that there is a such a thing as a fee waiver. I can imagine situations at some fund companies where the waiver might indeed go away if rates climb enough as to make the fee less obvious.

tenkuky
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Re: Highest muni mm rates

Post by tenkuky » Thu May 03, 2018 1:36 pm

What is the decision point in a taxable account between an AMT-free muni MM fund and one which is just muni?
At Schwab at least, both are at 1.42%.
I have consistently been trapped in AMT land last several years, though the bite was somewhat less this year.

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neurosphere
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Re: Highest muni mm rates

Post by neurosphere » Thu May 03, 2018 1:58 pm

tenkuky wrote:
Thu May 03, 2018 1:36 pm
What is the decision point in a taxable account between an AMT-free muni MM fund and one which is just muni?
At Schwab at least, both are at 1.42%.
I have consistently been trapped in AMT land last several years, though the bite was somewhat less this year.
The new tax law will result in substantially fewer people subject to the AMT. So your question may no longer be relevant to you. For example for the past many years I paid significant AMT. This year, I don't expect to.

Another thing to note is that even funds which are not "AMT free" don't always have much/any income subject to AMT. This varies from year to year, but it's potentially worth checking any funds you are interested in to see what the historical AMT-taxable amounts have been.

But one way to think about the AMT issue is simply to note that some (usually small) portion of otherwise tax-free income from the fund would not be tax free if you pay AMT in the year of the AMT-taxable distributions. Calculating what your marginal rate would be on this AMT-taxable income can get tricky in some situations, and I won't attempt to explain what the rate could be under which situations. :D
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".

tenkuky
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Re: Highest muni mm rates

Post by tenkuky » Thu May 03, 2018 3:41 pm

neurosphere wrote:
Thu May 03, 2018 1:58 pm
tenkuky wrote:
Thu May 03, 2018 1:36 pm
What is the decision point in a taxable account between an AMT-free muni MM fund and one which is just muni?
At Schwab at least, both are at 1.42%.
I have consistently been trapped in AMT land last several years, though the bite was somewhat less this year.
The new tax law will result in substantially fewer people subject to the AMT. So your question may no longer be relevant to you. For example for the past many years I paid significant AMT. This year, I don't expect to.

Another thing to note is that even funds which are not "AMT free" don't always have much/any income subject to AMT. This varies from year to year, but it's potentially worth checking any funds you are interested in to see what the historical AMT-taxable amounts have been.

But one way to think about the AMT issue is simply to note that some (usually small) portion of otherwise tax-free income from the fund would not be tax free if you pay AMT in the year of the AMT-taxable distributions. Calculating what your marginal rate would be on this AMT-taxable income can get tricky in some situations, and I won't attempt to explain what the rate could be under which situations. :D
Thanks!
When in doubt, go with the product I understand better, so for minimal difference, I'll "settle" for a non-AMT-free aka regular muni mm fund.

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