Vanguard Federal Money Market Fund (VMFXX)
VMFXX pays a 3.56% 7-day SEC yield with a 0.11% expense ratio — one of the cheapest, highest-yielding places to park idle brokerage cash. It's a money market mutual fund, so it carries SIPC (not FDIC) protection, with a $3,000 minimum to invest.
Is the Vanguard Federal Money Market Fund (VMFXX) worth it?
Vanguard’s Federal Money Market Fund (VMFXX) is the default cash fund for millions of Vanguard accounts, and for good reason. It pays a 3.56% 7-day SEC yield with a 0.11% expense ratio — meaning almost all of the yield reaches you rather than the fund company.
The key distinction from a bank money market account is protection: VMFXX is a mutual fund, a security, so it is not FDIC-insured. It carries SIPC protection at the brokerage instead, and while it aims to hold a stable $1 share price, that’s an objective rather than a guarantee.
It requires a $3,000 minimum to invest, and the yield is variable — it tracks short-term rates, so it drifts up and down with the Fed. But for idle cash inside a Vanguard brokerage account, the combination of a strong yield and a tiny expense ratio is hard to beat. Yields are variable and can change; this is not financial advice. Confirm the current yield on Vanguard’s site before investing.
How does a brokerage account work?
A brokerage account lets you buy and sell investments yourself — stocks, ETFs, and more. Leading brokers charge $0 commission on U.S. stocks and ETFs. Your money is typically SIPC-protected against the firm failing, but that does not protect against investment losses.
What are the pros and cons of the Vanguard Federal Money Market Fund (VMFXX)?
The Vanguard Federal Money Market Fund (VMFXX) stands out for 3.56% 7-day SEC yield, though $3,000 minimum to invest.
- 3.56% 7-day SEC yield
- Very low 0.11% expense ratio
- Holds high-quality government and short-term debt
- $3,000 minimum to invest
- Not FDIC-insured (it's a fund — SIPC protection applies)
- Yield is variable and tracks short-term rates
Who should get the Vanguard Federal Money Market Fund (VMFXX)?
The Vanguard Federal Money Market Fund (VMFXX) is best for vanguard investors parking idle cash at a strong yield.
- Vanguard investors parking idle cash at a strong yield
- People who want a low expense ratio on their cash fund
- Anyone using it as a settlement or sweep fund in a brokerage
How does the Vanguard Federal Money Market Fund (VMFXX) compare?
Among the 6 money market funds we track, the Vanguard Federal Money Market Fund (VMFXX) ranks #3 with a money8020 score of 96/100.
| Product | Score | Tier | Provider |
|---|---|---|---|
| Fidelity Government Money Market Fund (SPAXX) | 96 | Essential | Fidelity Investments |
| Vanguard Cash Reserves Federal Money Market Fund (VMRXX) | 96 | Essential | The Vanguard Group |
| Vanguard Federal Money Market Fund (VMFXX) | 96 | Essential | Vanguard |
| Vanguard Treasury Money Market Fund (VUSXX) | 94 | Essential | The Vanguard Group |
| Fidelity Money Market Fund (SPRXX) | 85 | Strong | Fidelity Investments |
See all money market funds, ranked →
Common mistakes to avoid with a brokerage account
- Assuming "$0 commission" means no costs — options, margin, and broker-assisted trades can carry fees.
- Confusing SIPC protection with insurance against investment losses.
- Trading frequently and letting taxes and spreads erode returns.
- Holding uninvested cash that earns little instead of a swept high-yield option.
Key takeaways
- Vanguard Federal Money Market Fund (VMFXX) earns a money8020 score of 96/100, ranking #3 of 6 money market funds.
- 3.56% 7-day SEC yield
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- Best for vanguard investors parking idle cash at a strong yield.
- Rate and FDIC status fetched from Vanguard and corroborated against a regulator.
Frequently asked questions about the Vanguard Federal Money Market Fund (VMFXX)
What yield does Vanguard VMFXX pay?
Per Vanguard, VMFXX has a 3.56% 7-day SEC yield with a 0.11% expense ratio (as of 05/30/2026). The yield is variable and moves with short-term interest rates. The fund requires a $3,000 minimum investment and is commonly used as a settlement or cash fund.
Is VMFXX FDIC insured?
No. VMFXX is a money market mutual fund — a security, not a bank deposit — so it is not FDIC-insured. It carries SIPC protection at the brokerage. The fund aims to hold a stable $1 share price, but that is an objective, not a guarantee.
Is my money safe in the Vanguard Federal Money Market Fund (VMFXX)?
Brokerage accounts are typically SIPC-protected against the firm failing, but that does not protect against investment losses — the value of your holdings can fall.
Does the Vanguard Federal Money Market Fund (VMFXX) really charge $0 commissions?
Leading brokers charge $0 commission on online U.S. stock and ETF trades. Other products — options contracts, broker-assisted trades, or margin — may still carry fees, so check the schedule.
Sources
We fetched these figures from the provider and corroborated them against a regulator, last checked May 30, 2026. Primary sources: