If you’re seeking a safe place to park cash while earning competitive yield, Vanguard VUSXX—formally known as the Vanguard Treasury Money Market Fund (VUSXX)—is likely at the top of your list. With U.S. Treasury backing, daily liquidity, and stable $1 NAV, this fund is a cornerstone for risk-averse investors, retirees, and cash managers.
But how does it actually work? Is it the right choice for your portfolio in 2025? And how does it stack up against other Vanguard money market funds?
Let’s break down the details, risks, and comparisons so you can make an informed decision.
What Is Vanguard VUSXX?
VUSXX is Vanguard’s flagship Treasury money market mutual fund, designed to preserve principal while generating income through short-term U.S. Treasury securities.
It invests exclusively in:
- Treasury bills
- Treasury notes
- Treasury-backed repurchase agreements
This structure makes VUSXX among the lowest-risk investment vehicles available, ideal for investors seeking liquidity and federal tax efficiency.
Fund Category: U.S. Treasury Money Market Fund
Ticker: VUSXX (Investor Shares)
Fund Provider: Vanguard
2025 Vanguard VUSXX Performance Snapshot
| Metric | Value (as of May 2025) |
|---|---|
| Net Asset Value (NAV) | $1.00 (stable) |
| 7-Day SEC Yield | 4.87% |
| Expense Ratio | 0.09% |
| Minimum Investment | $3,000 |
| Dividend Frequency | Monthly |
| State Tax Treatment | Tax-exempt in most states |
| Federal Taxable? | Yes |
Source: Vanguard Fund Page – VUSXX
Who Should Consider VUSXX?
VUSXX is suitable for:
- Investors with low risk tolerance
- Those seeking short-term liquidity
- People managing emergency funds or sweep accounts
- Retirees in high-tax states looking for state tax-exempt yield
- Portfolio managers parking idle cash in taxable brokerage accounts
It’s not designed for growth, but it outpaces traditional savings accounts in yield—especially in a high interest rate environment like 2025.
Take a closer look at the VUSXX chart and performance history to see how it’s performed over time.
Vanguard VUSXX Yield: How It Works
What is the 7-Day SEC Yield?
VUSXX’s income return is measured using the 7-day SEC yield, which averages income earned over the past 7 days and projects it as an annualized rate. As of May 2025, VUSXX offers a 4.87% SEC yield.
How Often Does VUSXX Pay Dividends?
VUSXX pays monthly dividends, which can be:
- Reinvested automatically
- Sent to your linked bank or brokerage account
You can track its dividend history and payouts on Vanguard’s VUSXX performance page.
VUSXX Vanguard Advisors: When to Get Guidance
If you’re unsure whether VUSXX fits your portfolio, Vanguard Personal Advisors can help tailor an allocation strategy that considers:
- Tax status
- Cash flow needs
- Retirement time horizons
- Use of multiple money market funds in taxable vs tax-advantaged accounts
Alternatively, consult a fee-only financial planner to help you integrate VUSXX with other fixed income assets like short-term bond ETFs, CDs, or TIPS.
How Does VUSXX Compare to Other Vanguard Money Market Funds?
Comparison Table: VUSXX vs Other Vanguard MMFs
| Fund | Ticker | Focus | 7-Day SEC Yield (May 2025) | Expense Ratio | Tax Benefit |
|---|---|---|---|---|---|
| VUSXX | VUSXX | Treasury-only | 4.87% | 0.09% | State tax-exempt |
| VMFXX | VMFXX | Government MMF | 4.76% | 0.11% | None |
| VMRXX | VMRXX | Prime MMF (retail) | 5.08% | 0.16% | None |
| VUSXX (Admiral) | VUSXXX | Treasury MMF | 4.95% | 0.06% | State tax-exempt |
VUSXX stands out for its tax advantages, especially for high earners in California, New York, or Illinois, where state income taxes exceed 9%.
Risks to Consider
Even with its reputation for safety, VUSXX carries a few important risks:
Interest Rate Risk
If interest rates fall, the fund’s yield will decline. However, this affects all money market funds equally.
Inflation Risk
Because yields are fixed and conservative, VUSXX may not outpace inflation in the long term.
Opportunity Cost
Compared to riskier short-duration bond funds or high-yield accounts, you may miss out on higher returns for the benefit of safety.
How to Invest in VUSXX
Direct Through Vanguard
You can open a Vanguard account at investor.vanguard.com and purchase VUSXX directly with a $3,000 minimum investment.
Through Brokerage Accounts
Many brokerage platforms (e.g., Charles Schwab, TD Ameritrade) offer access to VUSXX, but not all do. Confirm availability before transferring funds.
In Employer Retirement Plans
Some 401(k) or institutional retirement plans may offer VUSXX as a cash reserve option, especially in large employer-managed accounts.
Pros and Cons of Vanguard VUSXX
Pros
- U.S. Treasury-backed stability
- Consistent monthly income
- Tax-efficient in most states
- Low fees (0.09%)
- Strong liquidity for withdrawals
Cons
- No FDIC insurance (not a bank product)
- Not available on all brokerage platforms
- May lag inflation over the long term
- Requires $3,000 to get started
Frequently Asked Questions (FAQ)
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What is VUSXX at Vanguard?
VUSXX is the Vanguard Treasury Money Market Fund. It invests solely in short-term U.S. Treasuries and seeks to provide income with minimal risk.
Is VUSXX better than a savings account?
In 2025, yes—often. It typically offers a higher yield than even high-yield savings accounts and provides state tax advantages.
Is VUSXX FDIC insured?
No. VUSXX is not a bank deposit and does not carry FDIC insurance. However, its U.S. Treasury holdings are considered virtually risk-free.
What is the VUSXX yield right now?
As of May 2025, the 7-day SEC yield is 4.87%.
Does Vanguard offer alternatives to VUSXX?
Yes. Vanguard also offers VMFXX (Government MMF) and VMRXX (Prime Retail MMF), but only VUSXX and its Admiral counterpart (VUSXXX) invest solely in Treasuries.
If your goal is to preserve capital while earning modest yield, Vanguard VUSXX remains one of the best options available in 2025. It delivers a combination of:
- Safety backed by U.S. Treasuries
- Low cost
- Tax efficiency
- Monthly liquidity
To learn about the current VUSXX interest rate and how it’s paid, see our updated breakdown on VUSXX Interest Rate.
Whether you’re building a cash reserve, managing dry powder for future investments, or simply seeking a superior alternative to traditional savings, VUSXX is a conservative powerhouse worth considering.
Disclaimer
VUSXX.com is an independent educational resource and is not affiliated with Vanguard or the Vanguard Treasury Money Market Fund (VUSXX). All investment decisions should be made with the guidance of a licensed financial advisor. This article is for informational purposes only and does not constitute financial advice.
