Author Topic: Vanguard Money Market (Default Fund)  (Read 428 times)

Getmeouttahere

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Vanguard Money Market (Default Fund)
« on: March 27, 2020, 09:56:37 AM »
All, during volatile times like this how safe is cash parked in the Money Market tied to my taxable account? Im continuing to DCA into the market and want to ship over another 25k or so to park there in order to deploy money to VTI over roughly the next year. Is my money better suited in a basic savings acc thats FDIC insured through my bank? Im not worried about losing a few dollars, just want to make sure wherever I leave my hard earned cash is a safe place to do so (so I can sleep better at night).

Thanks

Radagast

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Re: Vanguard Money Market (Default Fund)
« Reply #1 on: March 27, 2020, 11:10:08 AM »
The Federal Money Market Fund is approximately as safe as FDIC. At the end of the day it does have its pricing set by the market, so is <not guaranteed to be perfectly stable, though it has been so far>. Even a FDIC bank may not be able to guarantee money will not be frozen ever for even a day, which is equivalent. The Federal Reserve and Treasury have an extreme interest in maintaining the perfect stability and liquidity of their short term debt at all times and will do literally anything in their power to make that happen. Federal Money Market, Federal Deposit Insurance, guess who is behind both of those...

Often FDIC savings accounts have better yields.
« Last Edit: March 27, 2020, 11:19:09 AM by Radagast »

Getmeouttahere

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Re: Vanguard Money Market (Default Fund)
« Reply #2 on: March 27, 2020, 11:47:10 AM »
Thank you for your insightful and well thought out response. That certainly helps clear things up!