Executive Summary: Vanguard offers nine ways to hold cash—six money market funds, two bank-sweep programs and a Treasury ETF. I break down how each works, how safe they are and how their yields differ. Ultimately these leads to a clear verdict: skip the newer, flashier options and stick with a tried-and-true money market fund.
Parking your cash is supposed to be relatively simple. But with nine different ways to do it, Vanguard doesn’t make it easy.
This article is your map. I'll walk through what each cash option actually is, how safe it is, what it yields and—most importantly—which one best earns your investment.
The short version: Vanguard's money market funds remain the gold standard. They're rock-solid, competitively priced, highest-yielding and easy to understand. The newer cash programs and the Treasury ETF each have a role to play—and I'll tell you exactly what those are. But that doesn’t mean they are the best, by any means.
To be clear, none of this is a call to abandon your long-term investment strategy and pile into cash. But cash is a real piece of most portfolios, and it's worth understanding your options and maximizing your returns—especially now that cash is a legitimate competitor to bonds, not just a place to park spare change.
KEY POINTS
- All of Vanguard’s money market funds are rock-solid and low-cost
- Consider a municipal money market if you are in the top three tax brackets
- Stick with Federal Money Market over Cash Deposit for your settlement fund
- Cash Plus Account has some attractions but still falls short
- 0-3 Month Treasury Bill ETF is a cash-like option for ETF investors
Yields at a Glance
To set the stage, here are your nine cash options and their yields as of July 31.
| Option | Ticker | Type | Jul7 31 Yield |
| Treasury Money Market | VUSXX | Taxable Money Market | 3.68% |
| Cash Reserves Federal Money Market | VMRXX | Taxable Money Market | 3.63% |
| Federal Money Market | VMFXX | Taxable Money Market | 3.62% |
| 0–3 Month T-Bill ETF | VBIL | ETF | 3.59% |
| Cash Plus Account | — | Bank Sweep | 3.35% |
| Municipal Money Market | VMSXX | Tax-Exempt Money Market | 2.35% |
| NY Municipal Money Market | VYFXX | State-Specific Tax-Exempt Money Market | 2.32% |
| CA Municipal Money Market | VCTXX | State-Specific Tax-Exempt Money Market | 2.13% |
| Cash Deposit | — | Bank Sweep | 1.75% |
I’ve sorted them by yield. The three taxable money market funds and 0-3 Month Treasury Bill ETF (VBIL) are neck and neck. Cash Plus Account comes in a clear step behind, even with its 0.25% yield “boost.” Given that their income is federally tax-free, municipal money markets' lower yields are expected. (I’ll put the tax-free yields into fuller context below.) Cash Deposit brings up the rear.
Let’s walk through all the options.