Yields on a mm at Vanguard vs T bills
Slowly education myself on financial matters and your columns are a big help!
I have a mm fund at Vanguard (VMRXX ) with 7 day yield at 4.5%. Is there value in putting this money in T bills thru Vanguard which is currently paying a bit more for 3 or 6 month terms?
Second question: the VIPSX at Vanguard states a yield of 8.34%. This can vary I know with inflation- how do I tell when it is time to move it out of a TIPS account?
Thank you!
Terry Says
Not worth the move — Vanguard is one of the few financial institutions passing along realistic yields on their MM funds. Then again, many fund companies subsidized the cost of their MM funds when rates were so low. Now they are trying to make that subsidy back by not passing along market yields.
VIPXS is an inflation-adjusted fund. You’re asking a tough question — when will inflation fall permanently?! Not sure I want to guess at that. But I hope you’re holding this fund inside an IRA type account, or you’ll be paying taxes on the presumed value increase every year.
