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The Best Vanguard Money Market Funds

By U.S. News & World Report

Putting every dollar into the stock market is risky, especially if you have to withdraw some money from your nest egg to keep up with living expenses. An all-stock portfolio introduces you to sequence-of-returns risk, as a correction would force you to sell more of your shares to keep up with living expenses.

Money market funds address this issue and minimize risk while providing a respectable return on your capital. You shouldn’t tuck away all of your money into these types of funds, but they offer low volatility and high yields for patient investors who want less drama.

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Money market funds do not have Federal Deposit Insurance Corp., or FDIC, insurance. That means they don’t have the same insurance as the money you leave in the bank. However, these funds invest in short-term government bonds and other low-risk assets.

Fund managers aim to preserve a net asset value, or NAV, price of $1 per share. Investors can choose whether to receive cash flow from their position or reinvest it into the money market fund.

Why Invest in Vanguard Money Market Funds?

Vanguard isn’t the only brokerage firm that offers money market funds, but few of them match the low expense ratios that helped turn Vanguard into a juggernaut. This ratio reflects the cost of doing business with a managed fund, and a lower rate means you get to keep more of your money. You’ll typically get a lower expense ratio if you invest in passively managed funds over actively managed funds.

During periods of high inflation, the Federal Reserve increases interest rates. While rate increases may hurt stocks, they increase money market fund yields. These funds are a valuable hedge against stock market corrections, especially if you like growth stocks. Furthermore, money market funds are liquid. You can withdraw from a money market fund at any time without penalty, while certificates of deposit, or CDs, often charge a penalty if you withdraw funds before the maturity date.

Money Market Fund Risks to Keep in Mind

Although money market funds can provide low-risk cash flow that’s higher than most savings accounts, these assets come with some concerns to keep in mind. Here are some of the factors to consider before allocating cash into money market funds:

Interest Rate Risk

The Federal Reserve has been cutting interest rates for a few years after raising them substantially in 2022. If the Fed continues to reduce rates, money market funds will produce lower yields since they rely on short-term government bonds. Though inflation has been moving up recently and the labor market has been somewhat resilient, discouraging a rate cut in the near future, the Trump administration has historically put pressure on the Fed to cut rates.

Inflation Risk

Inflation silently impacts the real returns of your investments. If a fund yields 3% but inflation is at 2%, then your real return is only 1%. That’s before taxes, which will apply to money market funds. Taxation on distributions varies with many factors, but any interest income is treated as ordinary income.

Some money market funds can produce negative real returns after adjusting for inflation and taxes. Stocks have a better chance of outperforming inflation, especially during bullish economic cycles. While investors may prefer the stability of money market funds, it’s important to assess the gap between your interest rate and the rate of inflation.

Default Risk

It’s possible for a bond issuer to default and be unable to pay an obligation. This outcome would hurt the fund’s value but is extremely unlikely because money market funds prioritize short-term bonds.

That said, Vanguard has several funds that offer investors yields, stability and low expenses. Here are five of the best money market funds available from Vanguard, with their fee and yield details as of May 12:

Money Market Fund 7-Day SEC Yield Expense Ratio Minimum Investment
Vanguard Federal Money Market Fund (ticker: VMFXX) 3.6% 0.11% $3,000
Vanguard Treasury Money Market Fund (VUSXX) 3.6% 0.07% $3,000
Vanguard New York Municipal Money Market Fund (VYFXX) 2.4% 0.11% $3,000
Vanguard California Municipal Money Market Fund (VCTXX) 2.1% 0.12% $3,000
Vanguard Municipal Money Market Fund (VMSXX) 2.4% 0.11% $3,000

Vanguard Federal Money Market Fund (VMFXX)

The Vanguard Federal Money Market Fund has been around since 1981, has a 0.11% expense ratio and requires a $3,000 minimum investment. Investors right now enjoy a seven-day SEC yield of 3.6% as of May 12.

VMFXX invests most of its capital in U.S. government securities. The fund prioritizes short-term government bonds, which makes income more sensitive to changes in interest rates. The fund has 308 total holdings with an average maturity of 29 days. VMFXX closed out April with $375.5 billion in net assets.

Although bond holdings have interest rate sensitivity, government bonds overall are some of the safest investments available. The government can always print more money if it needs to cover any bond payments.

Vanguard Treasury Money Market Fund (VUSXX)

The Vanguard Treasury Money Market Fund also requires a $3,000 minimum investment to get started, and it carries a 3.6% seven-day SEC yield. The fund only has a 0.07% expense ratio, so you get to keep almost every dollar that the fund yields, prior to taxes.

VUSXX currently invests at least 80% of its assets in debt issued directly by the U.S. government. The actively managed VUSXX currently has 95.5% invested in U.S. Treasury bills and 4.5% in U.S. government obligations.

The fund has 31 holdings with an average maturity of 34 days. VUSXX prioritizes high cash flow and liquidity, and that strategy has attracted $107 billion in assets.

[Read: 5 Best S&P 500 Index Funds to Buy for 2026]

Vanguard New York Municipal Money Market Fund (VYFXX)

The actively managed Vanguard New York Municipal Money Market Fund also has a $3,000 investment minimum, but it has some notable differences in expense ratio and yield from some of the other funds on this list.

New York investors still get a low 0.11% expense ratio, which is only slightly higher than the other funds’ costs. Investors also receive a 2.4% seven-day SEC yield as of May 12. The fund is designed for New Yorkers in a higher tax bracket who have a short-term savings goal and don’t want to pay taxes on their cash flow. It’s also considered one of Vanguard’s most conservative investment options, according to the fund website. At least 80% of the fund’s total assets are in high-quality, short-term New York municipal securities.

VYFXX prioritizes securities that are exempt from federal and New York personal income taxes, and it aims to maintain a net asset value of $1 per share. It has 354 holdings with an average maturity of 11 days. VYFXX has $3.5 billion in total net assets and is on a monthly distribution schedule.

For a New Yorker in the highest possible tax bracket, the tax-equivalent yield for a 2.4% tax-free yield is 4.98%. This means a taxable money market fund would need to yield roughly 5% just to leave you with the same amount of cash after the IRS, state and city take their cut.

Vanguard California Municipal Money Market Fund (VCTXX)

This actively managed fund is a California resident’s equivalent of VYFXX. It seeks to invest at least 80% of its assets in high-quality, short-term California municipal securities that are exempt from federal and state income taxes. Right now, all of its assets are invested in those types of securities.

VCTXX has a 0.12% expense ratio and $3.9 billion in total assets. The fund requires a $3,000 minimum investment to get started. VCTXX has 244 holdings with an average maturity of 14 days. It’s a low average maturity for investors who are worried about rate cuts, but the fund still has desirable tax benefits for Californians.

VCTXX investors reap monthly distributions to the tune of a 2.1% seven-day SEC yield as of May 12.

Vanguard Municipal Money Market Fund (VMSXX)

The Vanguard Municipal Money Market Fund offers broader exposure to municipal bonds for investors who aren’t located in New York or California. Started in 1980, the actively managed fund has a 0.11% expense ratio and a 2.4% seven-day SEC yield as of May 12. You’ll have to deposit at least $3,000 to start a position in this fund.

The fund maintains a net asset value of $1 per share while allocating capital into securities that are exempt from federal personal income taxes. The low-risk fund has $18 billion in total assets that are spread across more than 1,000 holdings. Securities in the fund have an average maturity of 16 days.

VMSXX won’t beat the S&P 500 during bullish cycles, but it offers more stability during economic slowdowns. For some investors, that provides some peace of mind in today’s unpredictable market.

For investors in the 37% tax bracket, this fund’s tax-equivalent yield is 3.8% at the federal level. Investors may still owe state and local taxes depending on their residency.

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The Best Vanguard Money Market Funds originally appeared on usnews.com

Update 05/14/26: This story was previously published at an earlier date and has been updated with new information.

Deputy followed her six miles, then threw her to the ground: Sun Prairie family alleges racial profiling, excessive force

By CNN
Click here for updates on this story    SUN PRAIRIE, WI (365 Media Foundation, Inc) -- A Sun Prairie family has filed complaints with the Dane County Sheriff’s Office (DCSO) and Sun Prairie Police Department (SPPD), and is pursuing legal action, after a Dane County Sheriff’s Deputy followed a 19-year-old woman for more than six miles, handcuffed her father, forcibly threw her to the ground and violently detained her without provocation.Sun Prairie Police body camera video shows Bryanna Montgomery, 19, was backing away from Deputy Tory Boyce when he grabbed her arm and the back of her neck, throwing her to the ground and kneeling on her back. With the assistance of Sun Prairie Police officer Tyler Chitwood, who also knelt on Bryanna Montgomery’s back, Boyce placed Montgomery in the back of his patrol car.“I’m about to watch my kid get killed in front of our (expletive) house,” Jovan Montgomery recalls thinking. He said he may pursue therapy, as the whole encounter has given him recurring nightmares.A Sun Prairie Police Department spokesman said the department is looking into the case but could not comment at this time. “The Dane County Sheriff’s Office takes all complaints about the conduct of our employees seriously. Maintaining the trust and confidence of our community members is of the utmost importance,” Dane County Sheriff Kalvin Barret said in an email to Madison365. “Whenever we receive a complaint, we thoroughly review the matter and take appropriate action based on the outcome of the investigation.”The following video comes from two SPPD body cameras. The second depicts a better view of Boyce’s actions but is muted, which is against SPPD policy. The video contains profanity and disturbing images.youtu.be/Q1m7lt0gYOs?si=mZGLeF-gYyLHu0EwAll eight body camera videos are available at this link: youtu.be/AwpbkPlcdkEThe incidentJovan Montgomery told Madison365 that he and his daughter Bryanna had gone to Madison’s east side to pick up his other daughter’s car late Wednesday, July 29. Bryanna was driving that car back to their home in Sun Prairie, with Jovan in his car behind. He said he noticed a Dane County Sheriff’s Deputy following closely behind Bryanna on the East Side of Madison, and that the deputy continued to follow her all the way to Sun Prairie. A ticket mailed to Bryanna subsequently alleges that she ran the stop sign at Portage Road and Hanson Road in the Town of Burke. Google Maps indicates that it’s a 6.6-mile drive from there to the Montgomery home, which is where Boyce finally turned on his lights and pulled Bryanna over.A DCSO representative said there’s no set policy on how long it should take to initiate a traffic stop after a deputy observes a violation.“The timeline completely depends on the discretion of the individual law enforcement officer surrounding the anticipated contact,” DCSO Public Information Officer Elise Shaffer wrote in an email responding to Madison365’s questions. “Every contact with the public presents its own unique set of circumstances.”Madison365 has submitted open records requests for Boyce’s patrol car dash cam video. The dark blue route is the one Jovan Montgomery said he and his daughter took from the East Side of Madison to Sun Prairie, with Sheriff’s Deputy Tory Boyce following the entire way. Jovan Montgomery said he followed the deputy as the deputy followed Byranna, calling his wife, who was at home. When they arrived home and the deputy turned his lights on, Jovan parked behind the deputy’s car. Jovan got out of his car just as Boyce was getting out of his, and Jovan said Boyce immediately shone his flashlight into Jovan’s eyes and demanded to see his ID. Jovan Montgomery said he asked what crime he had committed, and declined to show his ID. A law enforcement officer can ask anyone for an ID, and a person can decline that request, unless the officer has reasonable suspicion that they’ve committed a crime, Shaffer said. “He probably wanted to see if I got a warrant (for arrest),” Jovan Montgomery said. “I don’t. Once he saw me, he saw a Black man, and he’s like, ‘target acquired.'”After declining to provide an ID, Jovan Montgomery walked onto his front lawn and requested Boyce summon assistance from the Sun Prairie Police Department (SPPD), because he knew SPPD uses body cameras. Eight SPPD officers arrived very shortly thereafter.SPPD body camera video indicates that Boyce told SPPD officers “he’s detained, she’s detained,” pointing in turn at Jovan and Bryanna Montgomery. Jovan Montgomery’s wife and Bryanna’s stepmother, Emily Wendt, was also outside and vocally confrontational with police, but was not detained.Wendt is white. Jovan and Bryanna Montgomery are Black.SPPD officer Tyler Chitwood wrote in an incident report that he asked Boyce if he wanted Jovan Montgomery in handcuffs, and that Boyce said yes.Chitwood’s body camera video shows that he asked, “You want him actually detained?” And Boyce answered, “Yes, with the way he’s acting,” as Jovan Montgomery, standing on his front lawn, took a step back with his arms folded.Chitwood and officer Odalys Gloria then placed Jovan Montgomery in handcuffs. Chitwood wrote in his report that Jovan Montgomery offered “passive resistance” by tensing his arm, but complied.Shaffer said Wisconsin law enforcement officers “are allowed to handcuff a person when that person is under formal arrest, placed in protective custody, or when a law enforcement officer has specific articulable facts showing the person poses a safety or flight risk during temporary detention.”Madison365 has submitted open records requests for Deputy Boyce’s incident reports to ascertain whether he articulated any such facts. Shaffer could not answer whether his reports contain such facts.Video recorded by Chitwood and Gloria then shows Boyce speaking with Bryanna Montgomery on the sidewalk. Boyce said he wanted to “explain the traffic stop” and seemed to indicate he wanted Bryanna Montgomery to move closer to the street for that purpose. It’s unclear why he couldn’t explain the traffic stop where they were standing, on the sidewalk. Bryanna Montgomery did not seem threatening, nor did she seem to be attempting to flee. However, when she refused to walk with Boyce toward the street, he grabbed her upper arm with one hand, the back of her neck with the other and threw her face-first to the ground, on the strip of grass between the sidewalk and the curb. While Wendt screamed and implored officers to get off of her, and Jovan told Bryanna to hold still and calm down, both Chitwood and Boyce knelt on her back while securing her in handcuffs. She said once that she couldn’t breathe. Once they had her cuffed, Chitwood asked whether she needed an ambulance; she said no. They then walked her to a patrol car and she voluntarily got in the back seat, saying, “I weigh like 20 times less than both of you. You don’t need two grown men on my (expletive) back.”A few minutes later, a DCSO Sergeant arrived and walked Jovan toward his garage door, away from the SPPD officers. Jovan said he explained the situation to the sergeant and the sergeant unlocked the handcuffs on him and instructed SPPD officers to get Bryanna out of the squad car and unlock the handcuffs on her. Boyce told Bryanna that he would mail a ticket, and the police all left.Bryanna Montgomery then received tickets in the mail for failure to obey a traffic sign, for following too closely and for driving without her driver’s license on her person. Jovan Montgomery received a ticket for following Boyce too closely. That ticket indicates the violation happened on Main Street in Sun Prairie, even though all three vehicles avoided Main Street due to road construction.“This was a big deal”After the police had all left, Wendt and Jovan Montgomery took Bryanna to the emergency room, where she was treated for a racing heart rate, difficulty breathing, and abrasions to her legs. A little over a week later, during an interview with Madison365, Jovan seemed more traumatized than Bryanna was.“You’re supposed to de-escalate,” he said of his expectations of police. “You’re supposed to make sure people feel safe. I don’t even feel safe in front of police anymore.”He said he remembers hearing Bryanna say, “We’re not doing this today” to Boyce, and thinking she meant, “we’re not doing what you guys just did a week ago with Corey (Ruiz),” referring to the man shot and killed by Madison police on July 22, just a week before this encounter. “That’s not gonna happen. You’re not gonna do any violence or murder somebody in front of our house. I’m no threat.”Bryanna said she felt more disrespected than fearful.“You’re not even talking to me like I’m a human,” Bryanna said. “You’re talking to me like you own me.”“It just seemed like it was just a really bad day, and it seemed like the deputy wanted to make it a worse day,” Jovan Montgomery said. “I really feel that I was being targeted… as a Black man.”The family has filed complaints with both DCSO and SPPD. They have also consulted an attorney and are considering a lawsuit against both agencies.“I want a public apology towards me and for my child, because a routine traffic stop should not turn into where people are being thrown around like rag dolls or like we’re slaves,” Jovan said. “Those days are over with.”Wendt said she wants “some accountability that something’s going to change. There’s going to have to be some monetary compensation, too. This is trauma… what we want is acknowledgement. We want Byranna’s case to mean something for change. This was a big deal.”Please note: This story was provided to CNN Wire by an affiliate and does not contain original CNN reporting. This content carries a strict local market embargo. If you share the same market as the contributor of this article, you may not use it on any platform.
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