Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

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gavinsiu
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Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by gavinsiu »

I acquire a sum of cash this year and need to park it somewhere until I figure what to do with it. I also should re-evaulate where I should park my emergency cash. I haven't thought much about cash since for a while the interest rate was hovering near zero, but now I am seeing more increase of late. I am trying to stick with vendors that I already have a relationship with if just to avoid dealing with too many vendors.

Currently the emergency fund sits in Capital one, which appears to be yielding 2.00% at the moment. Marcus appears to be yielding 2.15%. Fidelity Treasury SPRXX appears to have a 7 day yield of 2.08%. Vanguard appears to have a VFXX at 2.17% and VUSXX at 2.36%.

Capital one and Macrus are FDIC bank accounts. The other accounts are money market. All appear to be treasury so I might get a break from state taxes, but IL taxes are not particularly high.

I don't know, I am thinking of incline with going with VUSXX for now. Do you think I am wrong?
mongstradamus
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by mongstradamus »

gavinsiu wrote: Thu Sep 22, 2022 4:46 pm I acquire a sum of cash this year and need to park it somewhere until I figure what to do with it. I also should re-evaulate where I should park my emergency cash. I haven't thought much about cash since for a while the interest rate was hovering near zero, but now I am seeing more increase of late. I am trying to stick with vendors that I already have a relationship with if just to avoid dealing with too many vendors.

Currently the emergency fund sits in Capital one, which appears to be yielding 2.00% at the moment. Marcus appears to be yielding 2.15%. Fidelity Treasury SPRXX appears to have a 7 day yield of 2.08%. Vanguard appears to have a VFXX at 2.17% and VUSXX at 2.36%.

Capital one and Macrus are FDIC bank accounts. The other accounts are money market. All appear to be treasury so I might get a break from state taxes, but IL taxes are not particularly high.

I don't know, I am thinking of incline with going with VUSXX for now. Do you think I am wrong?
A few thought Sprxx has a bit of commercial paper and cd and yields between prime money market fund and treasury only money market fund is shrinking. The difference right now is 2.14 vs 2.09 is pretty small , and treasury only money market fund is almost entirely state tax exempt.

On topic of Vusxx it’s also state tax exempt the only thing you need to be aware of is 3000 min balance its probably best option for treasury money market at a broker.

Hysa are also good option but they aren’t state tax exempt if that’s important to you.

The only other option I would suggest is look at tbills and cds depending on how liquid you need money to be 4 week tbill are around 2.5 and 3 month is around 3 percent. Don’t know how comfortable you are with buying tbill.
Topic Author
gavinsiu
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by gavinsiu »

mongstradamus wrote: Thu Sep 22, 2022 4:57 pm A few thought Sprxx has a bit of commercial paper and cd and yields between prime money market fund and treasury only money market fund is shrinking. The difference right now is 2.14 vs 2.09 is pretty small , and treasury only money market fund is almost entirely state tax exempt.

On topic of Vusxx it’s also state tax exempt the only thing you need to be aware of is 3000 min balance its probably best option for treasury money market at a broker.

Hysa are also good option but they aren’t state tax exempt if that’s important to you.

The only other option I would suggest is look at tbills and cds depending on how liquid you need money to be 4 week tbill are around 2.5 and 3 month is around 3 percent. Don’t know how comfortable you are with buying tbill.
Well, the amount is over $3K. I wanted some place to park money until I am figuring out what to do, I think Tbills are going to be pretty complicated, but thanks for the suggestion.
Mainlandjones
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by Mainlandjones »

Citizens Access HYS is now at 2.35%.
marcopolo
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by marcopolo »

gavinsiu wrote: Thu Sep 22, 2022 4:46 pm I acquire a sum of cash this year and need to park it somewhere until I figure what to do with it. I also should re-evaulate where I should park my emergency cash. I haven't thought much about cash since for a while the interest rate was hovering near zero, but now I am seeing more increase of late. I am trying to stick with vendors that I already have a relationship with if just to avoid dealing with too many vendors.

Currently the emergency fund sits in Capital one, which appears to be yielding 2.00% at the moment. Marcus appears to be yielding 2.15%. Fidelity Treasury SPRXX appears to have a 7 day yield of 2.08%. Vanguard appears to have a VFXX at 2.17% and VUSXX at 2.36%.

Capital one and Macrus are FDIC bank accounts. The other accounts are money market. All appear to be treasury so I might get a break from state taxes, but IL taxes are not particularly high.

I don't know, I am thinking of incline with going with VUSXX for now. Do you think I am wrong?
How much cash?
FZDXX usually has a pretty good yield compared to other MM funds.
It has a $100k minimum purchase requirement. But, you can then hold it with much lower balance once you are in it.
Once in a while you get shown the light, in the strangest of places if you look at it right.
HomeStretch
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by HomeStretch »

If you already have an account with Vanguard, VUSXX is a great choice especially with a state tax benefit.

Buying T-Bills at auction for a higher yield than VUSXX is fairly uncomplicated. TheFinanceBuff has a tutorial on how to buy T-Bill’s at various brokerages, including Vanguard, here:
https://thefinancebuff.com/treasury-bil ... arket.html
MattB
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by MattB »

gavinsiu wrote: Thu Sep 22, 2022 5:19 pm I think Tbills are going to be pretty complicated, but thanks for the suggestion.
I wouldn't sell yourself short. I've been able to figure it out at both fidelity and treasury direct over in the past couple days, with no experience buying bonds in my life. Treasury direct was slightly easier, but fidelity wasn't that bad. It's probably worth figuring out if you're looking at 6 figure money; maybe not for less than that.
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BL
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by BL »

If you are comfortable buying any funds/etfs in your brokerage account, I doubt you would have trouble buying treasury bills, etc. I followed instructions from the Finance Buff (see above) which was very helpful. Also, I decided to experiment a few times by buying just one unit ($1,000) at a time from cash sitting in the settlement fund (federal MM).

Be sure you have the available cash sitting in your settlement fund to avoid complications. Also be sure of the amount you are purchasing before you complete the purchase. Some have trouble remembering that buying one unit is buying a $1,000 bill (if you picked 1,000 units, that would be buying $1,000,000 in bills/notes/bonds.

Buying at auction may require some waiting. Buying treasuries on the secondary market has no extra charge but I believe you can only do it during business hours. Treasuries come under the Buy and Sell category of "bonds and CDs", at least at Vanguard.
FellsGuy
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by FellsGuy »

MattB wrote: Thu Sep 22, 2022 7:05 pm
gavinsiu wrote: Thu Sep 22, 2022 5:19 pm I think Tbills are going to be pretty complicated, but thanks for the suggestion.
I wouldn't sell yourself short. I've been able to figure it out at both fidelity and treasury direct over in the past couple days, with no experience buying bonds in my life. Treasury direct was slightly easier, but fidelity wasn't that bad. It's probably worth figuring out if you're looking at 6 figure money; maybe not for less than that.
They are not complicated at all just a bit of time with the resources available mentioned by other posters
At fidelity and probably the others I buy T-bills regularly and once you understand they only show the latest auctions v TD which lets you book orders months out it gets very easy. And both let you automatically reinvest e.g. 4 week t-bill matures and then buys another 4 week t-bill or 8 week etc. It really is very simple and 100% safe
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JoMoney
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by JoMoney »

Personally, I don't use Tbills for reasons similar to why I'm not using brokered CDs, I don't want a whole bunch of individual securities to deal with. If we were talking about several hundred thousand dollars+ I can see it being maybe worthwhile, but at those amounts that's more than I need in liquid cash and I'd be comparing it to a short-term bond fund rather than a money market/bank account, and something like a .05% ER on a short-term bond fund seems quite reasonable. Another issue, is I want my short-term cash to be liquid cash - Tbills are quite liquid, but there is some amount of market risk selling them early, and in a brokerage account there will likely be a brief settlement period before the cash be drawn against. I can debit/ACH withdraw/write checks/bill pay against my money market fund or bank account.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Topic Author
gavinsiu
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by gavinsiu »

FellsGuy wrote: Fri Sep 23, 2022 4:03 am They are not complicated at all just a bit of time with the resources available mentioned by other posters
At fidelity and probably the others I buy T-bills regularly and once you understand they only show the latest auctions v TD which lets you book orders months out it gets very easy. And both let you automatically reinvest e.g. 4 week t-bill matures and then buys another 4 week t-bill or 8 week etc. It really is very simple and 100% safe
Thanks, but that will require me to more reading. I hate getting into stuff I don't know enough about. I can park the money on MM and then look into Tbill later. That is actually on my agenda. I already invested the maximum per year into Ibonds.
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ruralavalon
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by ruralavalon »

gavinsiu wrote: Thu Sep 22, 2022 4:46 pm I acquire a sum of cash this year and need to park it somewhere until I figure what to do with it. I also should re-evaulate where I should park my emergency cash. I haven't thought much about cash since for a while the interest rate was hovering near zero, but now I am seeing more increase of late. I am trying to stick with vendors that I already have a relationship with if just to avoid dealing with too many vendors.

Currently the emergency fund sits in Capital one, which appears to be yielding 2.00% at the moment. Marcus appears to be yielding 2.15%. Fidelity Treasury SPRXX appears to have a 7 day yield of 2.08%. Vanguard appears to have a VFXX at 2.17% and VUSXX at 2.36%.

Capital one and Macrus are FDIC bank accounts. The other accounts are money market. All appear to be treasury so I might get a break from state taxes, but IL taxes are not particularly high.

I don't know, I am thinking of incline with going with VUSXX for now. Do you think I am wrong?
In my opinion (VUSXX) Vanguard Treasury Money Market Fund is a very reasonable choice, for the short-term while you formulate a long-term plan.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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anon_investor
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by anon_investor »

As of 9/22/2022:

Capital One: 2.00% APY
Marcus: 2.15% APY
SPRXX: 2.18% 7 day SEC yield (2.56% 1 day SEC yield)
VMFXX: 2.24% 7 day SEC yield
VUSXX: 2.38% 7 day SEC yield

Since SPRXX and VMFXX invest in Fed Bank repos, their yields will likely shoot up faster.

VUSXX is exempt from state/local income taxes.

If one lives in a high tax state VUSXX is a winner.
mongstradamus
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by mongstradamus »

anon_investor wrote: Fri Sep 23, 2022 10:37 am As of 9/22/2022:

Capital One: 2.00% APY
Marcus: 2.15% APY
SPRXX: 2.18% 7 day SEC yield (2.56% 1 day SEC yield)
VMFXX: 2.24% 7 day SEC yield
VUSXX: 2.38% 7 day SEC yield

Since SPRXX and VMFXX invest in Fed Bank repos, their yields will likely shoot up faster.

VUSXX is exempt from state/local income taxes.

If one lives in a high tax state VUSXX is a winner.
I think vmfxx and spaxx or fzfxx are better comparisons , as since sprxx owns commercial paper and cds which isn’t vmfxx. Fzfxx is mostly treasuries and repos just like vmfxx.

I personally think fdlxx yield is at 2.10 is good enough to use for main cash holding at fidelity. I would rather not hold all the junk that’s in prime money market funds.
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anon_investor
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by anon_investor »

mongstradamus wrote: Fri Sep 23, 2022 10:48 am
anon_investor wrote: Fri Sep 23, 2022 10:37 am As of 9/22/2022:

Capital One: 2.00% APY
Marcus: 2.15% APY
SPRXX: 2.18% 7 day SEC yield (2.56% 1 day SEC yield)
VMFXX: 2.24% 7 day SEC yield
VUSXX: 2.38% 7 day SEC yield

Since SPRXX and VMFXX invest in Fed Bank repos, their yields will likely shoot up faster.

VUSXX is exempt from state/local income taxes.

If one lives in a high tax state VUSXX is a winner.
I think vmfxx and spaxx or fzfxx are better comparisons , as since sprxx owns commercial paper and cds which isn’t vmfxx. Fzfxx is mostly treasuries and repos just like vmfxx.

I personally think fdlxx yield is at 2.10 is good enough to use for main cash holding at fidelity. I would rather not hold all the junk that’s in prime money market funds.
I moved most of my emergency fund that is not in T-Bills and I Bonds into FSIXX (Fidelity Treasury Only Money Market Fund - Class I) at Merrill Edge, which currently has a 7 day SEC yield of 2.38% (1 day SEC yield of 2.44%), only a $1k minimum initial purchase at Merrill Edge, but a $1 million minimum initial purchase at Fidelity. At Fidelity you can get FDLXX (retail share class of the Fidelity Treasury Only Money Market Fund) which has no minimum initial purchase amount, and has a 7 day SEC yield of 2.09% (1 day SEC yield of 2.17%).

I view "treasury only" money market funds as good as FDIC insurance.
leland
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by leland »

Obligatory reference to doc: https://www.doctorofcredit.com/high-int ... gs-to-get/

Assume most rates mentioned here closer to 2% will start to approach 3% pretty soon.
chassis
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by chassis »

gavinsiu wrote: Thu Sep 22, 2022 4:46 pm I acquire a sum of cash this year and need to park it somewhere until I figure what to do with it. I also should re-evaulate where I should park my emergency cash. I haven't thought much about cash since for a while the interest rate was hovering near zero, but now I am seeing more increase of late. I am trying to stick with vendors that I already have a relationship with if just to avoid dealing with too many vendors.

Currently the emergency fund sits in Capital one, which appears to be yielding 2.00% at the moment. Marcus appears to be yielding 2.15%. Fidelity Treasury SPRXX appears to have a 7 day yield of 2.08%. Vanguard appears to have a VFXX at 2.17% and VUSXX at 2.36%.

Capital one and Macrus are FDIC bank accounts. The other accounts are money market. All appear to be treasury so I might get a break from state taxes, but IL taxes are not particularly high.

I don't know, I am thinking of incline with going with VUSXX for now. Do you think I am wrong?
I just opened a position in FZDXX. We shall see how that goes.
FellsGuy
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Re: Short term cash Fidelity vs Vanguard vs Marcus vs Capital one

Post by FellsGuy »

gavinsiu wrote: Fri Sep 23, 2022 7:45 am
FellsGuy wrote: Fri Sep 23, 2022 4:03 am They are not complicated at all just a bit of time with the resources available mentioned by other posters
At fidelity and probably the others I buy T-bills regularly and once you understand they only show the latest auctions v TD which lets you book orders months out it gets very easy. And both let you automatically reinvest e.g. 4 week t-bill matures and then buys another 4 week t-bill or 8 week etc. It really is very simple and 100% safe
Thanks, but that will require me to more reading. I hate getting into stuff I don't know enough about. I can park the money on MM and then look into Tbill later. That is actually on my agenda. I already invested the maximum per year into Ibonds.
If you can handle i-bonds on TD you wont have any issue buying t-bills at auction from fidelity!
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