Money market funds are a great choice because they're safe investments with values that don't change from day to day.
Protect your cash
For your emergency fund, you'll want to choose investments that are:
Safe from market risk. You want to know that your money will be there when you need it—especially in times of market or economic turbulence.
Easy to access. This will ensure you'll be able to take care of your emergency quickly!
Interest-bearing. The point of an emergency fund isn't to make money, but don't turn down the opportunity to earn interest on your savings.
Your fund choices
Vanguard Prime Money Market Fund* is a great option for your emergency stash. Like all our money market funds, it's a low-risk investment that offers a competitive yield and easy access.
The interest you earn on your money market fund will be taxable, unless you choose a tax-exempt money market fund*. You can save even more if you live in one of the following states:
It's important to note that yields on tax-exempt funds are usually lower, so they only make sense if you're in one of the highest tax brackets.
The money market settlement fund
In addition to the money market fund you select for your emergency cash, all new accounts will include Vanguard Federal Money Market Fund** as the settlement fund.
This fund is used to pay for and receive proceeds from brokerage transactions, including Vanguard ETFs®, and other account activity.
We'll set up this fund with a zero balance, and you'll need to put money into it to pay for any buy orders you place.
Disclaimer: The content on this site is provided for information and discussion purposes only. It is not intended to be professional financial advice and should not be the sole basis for your investment, financial or tax planning decisions. Under no circumstances does this information represent a recommendation to buy or sell securities, or any other products, or services. All content and information is subject to change at anytime.