Savings, CDs, T-Bills or Money Market Funds? Where Cash Earns the Most Now

Finance-focused summary (cash return options)

The video compares where to park cash over the next ~6–12 months (reserve funds and money earmarked for later spending). It focuses on after-tax return, liquidity, and low-risk yield sources, including:

• Bank savings accounts / CDs
• Brokerage sweep accounts
• Money market funds (Treasury, Fed, municipal)
• Short-term Treasury bill ETFs

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Key instruments / tickers mentioned

Bank / deposit products

• Savings accounts (various banks; example shown from depositaccounts.com)
• CDs (Certificates of Deposit): specifically 3-month CDs

Brokerage sweep / money market funds

• SPAXX (Fidelity money market fund; sweep)
• VMRXX (Vanguard Federal Reserve Money Market Fund)
• Treasury Money Market Fund (Vanguard; described as paying ~3.78%—ticker not explicitly stated)
• Vanguard Cash Plus (sweep-style cash solution; not a ticker)
• Municipal money market fund at Vanguard (referenced as the key municipal option users would buy; described as ~3.22% using 7-day yield)
• Fidelity Municipal Money Market Fund (ticker not explicitly stated)

Treasury bill ETFs

• VBIL (0–3 month Treasury bill ETF)
• SGOV (0–3 month Treasury bill ETF)
• Other Treasury money market funds mentioned:
  • FZDX XX (ticker appears garbled; described as having a $100,000 minimum)
  • Vanguard Federal Money Market Fund (cost mentioned; ticker not explicitly stated)

Benchmark / rate

• SEC 30-day yield (used for ETF/market yield reporting; discussed as methodology rather than a ticker)

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Yields / key numbers called out (approx.)

Savings accounts (FDIC insured)

• ~4.34% max savings APY shown (from depositaccounts.com example)
• Notes: subject to state + federal income tax (if applicable)

CDs (short-term)

• ~4.35% for 3-month CDs
• Notes: subject to state + federal income tax; early redemption penalties may apply

Brokerage sweep examples

• Schwab sweep: ~0.01% per annum (called out as “terrible”)
• Fidelity sweep (SPAXX): ~3.47%
• Vanguard Cash Plus: ~3.35%
• Caution: sweep rates can vary by broker, and some are far below money market / T-bill alternatives

Money market funds (Vanguard)

• VMRXX: ~3.79%
• Treasury Money Market Fund: ~3.78%
• Vanguard municipal money market (varies by state):
  • ~3.22% using 7-day yield

Municipal money market “break-even” comparisons (after-tax)

Using the described Fidelity equivalent tax-rate calculator:

• To beat taxable CDs, need:
  • ~5.37% CD-equivalent return (example uses top marginal bracket assumption)
• To beat Treasury money market yield, need:
  • ~4.82% (top marginal bracket assumption)

Treasury bill ETFs (0–3 months)

• VBIL: ~3.66%–3.67%
• SGOV: slightly higher by ~1 bp on Sep 25
  • SGOV expense difference mentioned: ~9 bps higher cost
  • Transcript suggests net yield may still be comparable or slightly better on that date
• Treasury “coupon equivalent” snapshots (Treasury website, not ETF yield):
  • ~3.97% at 4 weeks
  • ~4.01% at 6 weeks
  • ~4.10% at 8 weeks
  • “About 4%” summarized

Why ETFs look lower than recent Treasury rates:

• ETFs report via SEC 30-day yield, which “looks back” roughly 30 days earlier, so it lags more recent rate increases.

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Methodology / decision framework used (step-by-step logic)

When evaluating “cash” options, the presenter uses three criteria:

1. Yield / interest rate
2. Taxes (state + federal; consider tax-advantaged structures like municipal funds)
3. Liquidity (access quickly without penalty; avoid selling at a loss)

For money market vs Treasury/ETF comparisons:

• Compare SEC 30-day yield (ETF/market convention) vs current Treasury coupon equivalent
• Account for fees/expense ratios (e.g., SGOV vs VBIL) when comparing “convenience yield”

For municipal money market “value”:

• Use an equivalent tax return calculator (Fidelity tool described)
• Compute the break-even taxable yield required to match municipal yields, based on:
  • residence filing status / place of residence
  • taxable income
  • top marginal tax bracket assumption (example-based)

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Explicit recommendations / cautions

Sweep account caution (strong)

Don’t ignore brokerage sweep account yields. Example:

• Schwab sweep ~0.01% is far worse than money market alternatives.

Preference suggested

• The presenter suggests Vanguard tends to offer “best rates” among the discussed money market / T-bill ETF alternatives.

Municipal money market funds

• Could be attractive for higher tax brackets, especially when the municipal bonds are from your state of residence (presenter mentions examples like NY/CA).
• Disclosure: “not a tax expert,” and acknowledges potential exceptions or “weird tax laws.”

Treasury T-bills via ETFs

• ETFs may show lower apparent SEC yields versus current Treasury coupon equivalents due to the lookback period.
• For “best return,” consider buying T-bills directly, even if ETFs offer convenience.

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Disclosures / disclaimers

• Not financial advice (implied): not explicitly stated as “not financial advice,” but includes:
  • “Of course, you will have to make this decision yourself.”
• Tax disclaimer:
  • “I am not a tax expert”
  • “I have never lived in New York or California.”
• Personal holding disclosure:
  • “Full disclosure: My wife and I own shares of VBIL.”

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Presenters / sources (mentioned)

• Presenter: Rob (referred to as “Rob”; full name not provided in subtitles)
• Sources referenced for rates/info:
  • depositaccounts.com (savings APY example)
  • Schwab (brokerage sweep and broker offerings mentioned)
  • Fidelity (SPAXX, municipal money market reference, tool described)
  • Vanguard (Cash Plus, money market funds, municipal money market funds)
  • Federal Reserve (via “Federal Reserve Money Market Fund” concept)
  • Treasury website (coupon equivalent examples)
  • “Fidelity tool” (equivalent tax return calculator)