Updated October 23, 2026 from live rates
SPAXX vs VMFXX: which keeps more after tax?
At today's rates, VMFXX keeps more after tax in all 9 tax scenarios below, by about $977 to $2,220 a year on $500,000.
After-tax yield by tax situation
Yield you keep after federal and state income tax, at today's rates. The last column is the yearly gap between the best and second-best on $500,000. The 3.8% net investment income tax is left out; it lowers every taxable option by the same share.
| Federal bracket, state tax | SPAXX | VMFXX | Yearly gap |
|---|---|---|---|
| 24%, no state tax | 2.68% | 2.91% | $1,178 |
| 24%, 5% state | 2.50% | 2.85% | $1,738 |
| 24%, 9.3% state | 2.35% | 2.79% | $2,220 |
| 32%, no state tax | 2.39% | 2.60% | $1,054 |
| 32%, 5% state | 2.22% | 2.54% | $1,614 |
| 32%, 9.3% state | 2.07% | 2.49% | $2,096 |
| 37%, no state tax | 2.22% | 2.41% | $977 |
| 37%, 5% state | 2.04% | 2.35% | $1,537 |
| 37%, 9.3% state | 1.89% | 2.29% | $2,019 |
What's different
| SPAXX | VMFXX | |
|---|---|---|
| What it is | Fidelity brokerage (SPAXX core)SPAXX, Fidelity Government Money Market | Vanguard brokerageVMFXX, Vanguard Federal Money Market (settlement fund) |
| Rate today | 3.52%7-day yieldVerified October 21, 2026 | 3.83%7-day SEC yieldVerified October 21, 2026 |
| Getting your money | Same day | Same day |
| Protection | Money market fund, not FDIC-insured | Money market fund, not FDIC-insured |
| State income tax | Fully taxable | 66.6% exempt (2025 notice) |
Both are government money market funds that serve as the default cash position at their brokers (Fidelity and Vanguard). The difference after tax comes from two things: the yield, and how much of each fund's income is exempt from state tax because it comes from U.S. Treasuries. Vanguard publishes that share for VMFXX each year; we use it where it's published and treat the income as fully state-taxable where it isn't.
Cash intelligence
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