- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
CD vs Vanguard Federal Money Market Fund (VMFXX) vs T - bills
Posted on 10/2/23 at 9:44 am
Posted on 10/2/23 at 9:44 am
What would the be advantages of cds or tbills over VMFXX in taxable account for modest rainy day fund? Vmfxx has a 5.3% 7 day sec yield (been similar for a while now). I feel like those rates are similar or better than the ither options and Vmfxx would be more liquid?
My understanding is a large portion of VMFXX's holdings would be tbills and other secure government debt.
I guess with cds and t bills you give up a little liquidity for guaranteed/stable returns?
My understanding is a large portion of VMFXX's holdings would be tbills and other secure government debt.
I guess with cds and t bills you give up a little liquidity for guaranteed/stable returns?
5
Posted on 10/2/23 at 9:56 am to Gator feather
Remember that the CD term binds both sides—you and the bank. A long term CD makes sense if you think there is a chance of rates coming down. Those high money market rates can disappear with the quickness.
Posted on 10/2/23 at 9:58 am to Gator feather
IMO the good thing about VMFXX, and others like it, is you get interest paid every month. That is key to me. I like to reinvest those funds.
Just so you know, some brokerages will charge you a fee to buy VMFXX. Others won't. Schwab will want you to buy SNOXX instead which is a similar product.
Just so you know, some brokerages will charge you a fee to buy VMFXX. Others won't. Schwab will want you to buy SNOXX instead which is a similar product.
Posted on 10/2/23 at 10:49 am to Gator feather
Duration. Money Markets are great as the rates have risen and stayed higher. But CDs can lock a rate with surety for a longer period of time.
One is not 'better'...they just have tradeoffs.
One is not 'better'...they just have tradeoffs.
Posted on 10/2/23 at 12:01 pm to Gator feather
CDs - you pay local and state tax.
Posted on 10/2/23 at 12:36 pm to Gator feather
In LA you save up to 4.25% in state taxes on a government money market and/or treasuries.
A 5.3% yield can be as high as 5.53% in tax equivalent yield. States with higher income taxes benefit even more vs CDs.
A 5.3% yield can be as high as 5.53% in tax equivalent yield. States with higher income taxes benefit even more vs CDs.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News