Vanguard Cash Plus Review 2024
Vanguard is a well-known brokerage option for investors, and you might consider saving money here if you’re looking for a secure place to keep your cash.
The Vanguard Cash Plus account is an FDIC-insured deposit account that gives you two ways to earn interest: a bank sweep program and five optional money market funds.
If you’re looking for a new place to save, learn more about Vanguard Cash Plus below and learn why Vanguard is worth a look.
Vanguard Cash Plus Account At-a-Glance
Where Can You Find the Best Savings Account Rates?
Savings rates are still some of the highest we’ve seen in years, but if you’re using a traditional, big-name bank, you’re missing out on these rates.
Here are our top picks for those who want to earn the highest interest on their savings accounts.
Overall Impression of Vanguard Cash Plus
Cash management accounts can be a great companion to an online brokerage account. You don’t need a brokerage account with Vanguard to open a Cash Plus account, but you might consider it if you’d like to earn an outstanding APY on your idle cash.
The lack of minimum balance requirements and monthly fees enhances the account’s appeal, and you can easily manage your account online.
Being able to invest in Vanguard money market funds within your cash management account can be a great introduction to investing if you’re not actively playing the market yet.
The biggest drawback may be a lack of ATM access and check-writing privileges. Some cash management accounts include those features, which you might find valuable.
Pros and Cons of Vanguard Cash Plus
Cash management accounts may be new territory for you if you’ve only ever had checking or savings accounts.
Weighing the advantages and disadvantages can help you decide if opening one makes sense.
Pros
- Cash balances earn a solid APY that is on par with what you’ll find at many top online banks.
- Vanguard doesn’t limit the number of withdrawals you can make or charge an excess withdrawal fee.
- You can save some money while investing in Vanguard’s low-cost money market funds.
- There are no monthly fees, and you can easily avoid the annual fee by opting for paperless account statements.
- Higher FDIC coverage limits mean your money is protected if you tend to maintain larger balances in savings.
Cons
- You won’t get an ATM card, debit card, or checks with this cash management account.
- Vanguard doesn’t have branches, so you must be comfortable managing your account online.
- You’ll need at least $3,000 to invest in Vanguard money market funds inside your account.
Compare Vanguard Cash Plus to Other Savings Accounts
You have plenty of options if you’re looking for a high-yield savings account.
We’ve highlighted some of the best savings account alternatives based on their fees, features, and APYs.
Barclays Online Savings Account
The Barclays Online Savings account features an above-average APY with no minimum deposit requirement. There’s no monthly limit on the amount you can deposit to your savings account.
Barclays periodically offers an introductory cash bonus for new account owners. You may need to meet a minimum deposit requirement to qualify for a welcome offer.
You won’t get an ATM card with this account, but scheduling ACH transfers between Barclays and a linked bank account is easy. The Barclays savings assistant is a built-in tool that helps you plan for and meet your savings goals.
Capital One 360 Performance Savings Account
Capital One 360 Performance Savings is another high-yield savings account with no monthly fees. The APY is slightly below what Vanguard offers but still better than what you’ll find at most traditional banks.
There are no minimum deposit or minimum balance requirements. You can open just one or multiple accounts to fund different savings goals. Mobile check deposits and automatic transfers help you grow your savings easily.
Deposits are FDIC-insured up to the standard coverage limit. You can visit a Capital One branch or cafe near you if you need to visit the bank in person.
Synchrony Bank High Yield Savings Account
Synchrony Bank’s high-yield savings account has no minimum deposit requirement, no minimum balance requirement, and no monthly fees. The APY is comparable to some of the best high-yield savings accounts online.
You can get an ATM card with this savings account, which is a plus if you need to withdraw cash. Synchrony refunds up to $5 in foreign ATM fees per month.
You can also manage your accounts online or via mobile banking. Synchrony Bank offers high-yield CDs and money market accounts if you’re interested in other savings options.
Who Is Vanguard Cash Plus For?
Vanguard Cash Plus could be an excellent fit for savers who are comfortable managing their money online. You might consider this account if you:
- Have an existing brokerage account with Vanguard or plan to open one
- Prefer a high-yield savings option with no monthly fees
- Would like to be able to invest in Vanguard money market funds
- Need a savings account with higher FDIC coverage limits
- Don’t need an ATM card, debit card, or check-writing access to your savings
Rating the Features of Vanguard Cash Plus
We’ve highlighted much of what makes the Vanguard Cash Plus account worthy of consideration. Here’s a closer look at how the features compare.
Mobile Banking
Vanguard allows you to access your savings account via online and mobile banking. The app has a 3.4 rating in the Google Play Store and a 4.7 rating in the App Store.
Account holders have access to mobile check deposit, direct deposit
Both the app and website are easy to navigate. If you already have accounts with Vanguard, you can view them and your Cash Plus account through a centralized dashboard.
Customer Service and Experience
Vanguard has an online support center where you can find answers to commonly asked questions. If you need help from a human client, support is available by phone.
If you need to call the support number, be prepared to answer security questions to verify your identity. Vanguard takes account security seriously and makes every effort to confirm that callers are who they say they are.
Fees
The Vanguard Cash Plus account has a $25 annual fee, but you can waive it by enrolling in e-delivery of your account statements.
Remember that if you’re investing part of your savings into Vanguard money market funds, those will come with their own fees. The main thing to know is the expense ratio, which is the annual cost of owning the fund. Vanguard expense ratios are among the lowest in the business, and there aren’t extra fees that come with this account.
Rates
Vanguard partners with banks to offer a bank sweep program. Deposits are “swept” to these partner banks, allowing you to earn interest at competitive rates.
If you invest in Vanguard money market funds, those also earn interest. Overall, the yields are below what you could get with the sweep option but still above traditional savings account rates.
Tools, Extras
Vanguard Cash Plus accounts don’t come with a lot of extra features. For example, you don’t have access to round-ups or savings buckets.
You can manually set up automatic deposits through a linked bank account. It’s a simple way to grow your money.
Access
Vanguard doesn’t have branches since it’s not a bank. You won’t have ATM access because everything is limited to online and mobile account management.
Cash access is as easy as transferring from your Vanguard account to an outside checking account.
Vanguard is committed to ensuring you have easy access to your cash. You can withdraw up to $100,000 in one business day via funds transfer. If you need help with your account, you’ll need to call client support. There is no live chat function.
Safety and Security
As mentioned, Vanguard will ask to verify your identity when you call client support. You can secure your account online by choosing a unique username and password. Vanguard utilizes security measures standard to the financial services industry, such as encryption, to protect customer accounts.
Deposits are FDIC-insured up to $1.25 million for individual accounts, and coverage doubles to $2.5 million for joint accounts. This is considerably higher than the standard FDIC coverage of $250,000 per person per account or $500,000 for an account with two people.
This high FDIC insurance amount is possible because of Vanguard’s bank sweep program. This program enables Vanguard to hold cash in several accounts at different financial institutions, each insured separately.
Minimum Deposit or Balance Requirements
There is no minimum deposit requirement to open a Vanguard Cash Plus account or minimum balance requirement to earn interest through the bank sweep program.
You will need to have at least $3,000 to invest in a Vanguard money market fund.
Vanguard has five money market funds for you to choose from, which are the following but could be subject to change:
- Vanguard California Municipal Money Market Fund (VCTXX)
- Vanguard Cash Reserves Federal Money Market Admiral™ Shares (VMRXX)
- Vanguard Municipal Money Market Fund (VMSXX)
- Vanguard New York Municipal Money Market Fund (VYFXX)
- Vanguard Treasury Money Market Fund (VUSXX)
Final Thoughts on Vanguard Cash Plus
Vanguard Cash Plus stands out for those seeking a straightforward, fee-free cash management solution coupled with high-interest potential. Here’s a quick breakdown:
- Competitive APY: Earn through a bank sweep or by investing in money market funds.
- No Monthly Fees: Enhance savings without the worry of monthly maintenance costs.
- High FDIC Insurance: Up to $1.25 million coverage through partner banks.
- Investment Flexibility: Direct cash into money market funds for potential higher yields.
- Digital Convenience: Manage everything online with ease, though be prepared for no ATM or check-writing options.
Vanguard Cash Plus could be ideal for online-savvy savers and investors looking to combine high yields with robust financial tools.
Frequently Asked Questions
Vanguard doesn’t penalize you for withdrawing money from your account. You can use ACH transfers to move money into a linked bank account or transfer funds to a Vanguard brokerage account.
Vanguard Cash Plus uses a bank sweep program to pay interest to savers. Through this program, savers have access to competitive rates from partner banks.
Keeping idle cash in a Vanguard Cash Plus account is a good idea if you want to earn an outstanding APY without monthly maintenance fees. You won’t be able to deposit cash to this account directly or withdraw it at ATMs. But you benefit from one of the best savings account rates with enhanced FDIC protection.
