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Which Vanguard Money Market Fund? (The Finance Buff)

An old (2007) piece, and pretty basic, but still worthwhile for descriptions of different types of MMFs. (It does not get into government vs. prime funds, which is a more recent development.)

The 7 day yields of the Vanguard MMFs seem to bounce all over the place. For a few days they may look unbelievably good, and then they look like they're not worth it.

The Treasury MMF, if you can meet the $50K min, may be a better option for those in high tax states like Calif. and NY. That's especially true now that SaLT deductions are limited. It used to be that if you were in, say, a 10% state/local bracket, and a 25% fed, then your effective state tax rate was 7.5% (because you could deduct state income taxes). Now more people are feeling the full weight of their state income taxes. So the state tax-exempt nature of the Treasury fund makes it even more valuable now.

Another thing that's changed since the article was written is that the AMT exemption amount was raised so high that virtually no one is subject to AMT. Thus the fact that Vanguard's muni funds are not AMT-free isn't a concern any longer.

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