How to get more from your cash at Vanguard

Option 1: Treasury bills, bought at auction

Backed by the U.S. government and free of state income tax. Usually the most you can keep in a high-tax state, and with automatic rollover it runs on its own. New to them? Read the full Treasury bill guide.

Vanguard sells new-issue Treasuries at auction with no commission online. It places noncompetitive bids (up to $10 million per security per household), so you get the auction yield. Auction purchases usually settle in about 3 business days. Find them in the bonds and CDs section of Vanguard's trading screens; we haven't verified Vanguard's exact menu names or whether it offers automatic reinvestment, so check its help pages.

Option 2: A money market fund

The simplest switch: one trade, and the money is usually available the next business day. Not FDIC-insured, but government and Treasury funds hold only government debt.

1. Search the fund’s ticker in the trade screen and choose Buy. At this firm: a Treasury money market fund, if you're in a high-tax state; Vanguard's default settlement fund is already a money fund.
2. Enter a dollar amount. Check the fund’s minimum and whether the firm charges a fee to buy it.
3. Ask whether it can be your default cash (“core” or “sweep”) option, so new deposits land there automatically. Some firms allow it; many don’t.

Before you move it

• Leave enough in the sweep for bills, transfers and trades you have coming up.
• T-bills pay their full yield if held to maturity. Sold early, they get the market price, which can be a little more or less.
• Money market funds aren’t FDIC-insured; the sweep usually is. Treasury bills are backed by the U.S. government.
• In an advisory account, ask whether the advisory fee is charged on cash. A 1% fee on cash earning little can cost more than it earns.
• Prefer not to use the broker? TreasuryDirect sells bills directly, with an automatic reinvest option.

Vanguard’s own help pages

• Vanguard: U.S. Treasury securities

General information, not investment advice. Rates and menus change; confirm with Vanguard before you trade. See what Vanguard’s cash rate has cost you so far →