VUSXX Fund: Is the Vanguard Treasury Money Market Fund Still a Safe Bet in 2025?

In today’s market environment of elevated interest rates and economic uncertainty, investors are taking a closer look at where they park their short-term cash. One fund that continues to gain attention is the VUSXX fund, formally known as the Vanguard Treasury Money Market Fund (VUSXX).

But how does the VUSXX fund stack up in 2025? Is it still the low-risk haven it’s long been considered? And what kind of yield can investors expect today?

This in-depth guide unpacks the performance, purpose, and practical uses of the VUSXX fund — including how it fits into a modern portfolio as a money market mutual fund, an emergency fund, and a core short-term savings vehicle.

What Is the Vanguard Treasury Money Market Fund (VUSXX)?

The Vanguard Treasury Money Market Fund (VUSXX) is a money market mutual fund that invests exclusively in U.S. Treasury securities, including Treasury bills and repurchase agreements backed by Treasuries. Managed by Vanguard, one of the most respected asset managers globally, VUSXX is built for investors seeking safety, liquidity, and yield — in that order.

Its core objective is to provide current income while preserving capital. Unlike high-yield savings accounts, which can be subject to bank-specific risks, VUSXX holds only securities backed by the full faith and credit of the U.S. government.

This makes the fund especially appealing to conservative investors, corporate treasurers, and high-net-worth individuals looking for capital preservation without sacrificing access to funds.

How Does the VUSXX Fund Generate Interest?

The income generated by the VUSXX fund comes from short-term U.S. Treasury obligations — primarily Treasury bills with maturities under 13 months.

Its yield is typically measured using the SEC 7-day yield, a standardized metric that reflects the fund’s average annualized income over the last 7 days. This makes it easier for investors to compare the VUSXX fund to other cash alternatives like CDs, high-yield savings accounts, and similar money market funds.

The current yield is heavily influenced by the Federal Reserve’s monetary policy. Since mid-2022, the Fed’s aggressive rate hikes have pushed the yields of Treasury securities higher, and the VUSXX fund has benefited significantly from these elevated rates.

To monitor the live yield of the fund, investors can check the official VUSXX page at Vanguard or consult FINRA’s yield data.

VUSXX Fund Yield Trends in 2025

As of Q2 2025, the VUSXX fund is offering a 7-day SEC yield of approximately 4.95%, according to the most recent data from Vanguard.

Here’s a quick look at how the yield has trended in recent years:

Year	7-Day SEC Yield (Approx.)
2022	2.85%
2023	4.56%
2024	5.05%
2025 YTD	4.95%

Despite some recent market volatility, the fund continues to offer a strong return relative to traditional savings products, particularly for investors with higher cash balances.

This yield performance is a primary reason why the VUSXX Vanguard fund is increasingly being used not just by individual savers, but also by large institutional accounts and nonprofits managing cash reserves.

How Does VUSXX Compare to Other Treasury Money Market Funds?

When considering where to place cash reserves, VUSXX is often benchmarked against competitors like:

• Fidelity Treasury Only Money Market Fund (FDLXX)

• Charles Schwab Treasury Obligations Money Fund (SNOXX)

• BlackRock T-Fund (TTTXX)

Here’s how they stack up as of May 2025:

Fund	SEC Yield	Expense Ratio	Holdings Focus
VUSXX	4.95%	0.09%	U.S. Treasuries only
FDLXX	4.92%	0.10%	U.S. Treasuries only
SNOXX	4.89%	0.13%	U.S. Treasuries + Repos

VUSXX continues to stand out with one of the lowest expense ratios and a highly conservative portfolio. For those prioritizing stability and federal tax benefits, it remains a strong contender.

How to Buy or Hold the VUSXX Fund

Investors can purchase VUSXX directly through a Vanguard brokerage account or via approved financial intermediaries.

Key requirements:

• Minimum investment: $3,000 for the Investor Shares class

• Expense ratio: 0.09% (as of 2025)

• Automatic sweep option: Available for eligible accounts

This vusxx mutual fund can be held in taxable brokerage accounts, trust accounts, or corporate accounts. However, VUSXX is not available in IRAs or other retirement-specific accounts due to its short-term nature.

Tax Considerations for VUSXX

While VUSXX distributions are subject to federal income tax, a significant portion of the income may be exempt from state and local income taxes, depending on your state of residence.

For California investors, for example, VUSXX generally qualifies for partial state tax exemption — though this varies by year and underlying holdings. To explore this topic in depth, read our full article: Is VUSXX State Tax Exempt?

Keep in mind:

• No capital gains taxes unless shares are sold at a gain

• No 1099-INT — income is reported on Form 1099-DIV

Are There Any Risks to VUSXX?

While the VUSXX fund is extremely conservative, no investment is entirely without risk. Here are the primary considerations:

• Interest Rate Risk: If Treasury yields fall, so will the VUSXX fund’s yield.

• Inflation Risk: If inflation rises faster than the fund’s yield, real purchasing power declines.

• Not FDIC Insured: VUSXX is not guaranteed by the U.S. government or any bank.

That said, the fund has never “broken the buck” and remains among the lowest-risk vehicles available to retail and institutional investors alike.

Using the VUSXX Fund as an Emergency Fund

If you’re searching for a safe, liquid, and federally-backed home for your emergency savings, the VUSXX fund checks nearly every box.

Unlike CDs, which lock your money for a fixed term, or high-yield savings accounts, which can impose withdrawal limits, VUSXX offers same-day liquidity for most redemptions and does not penalize investors for accessing funds.

Use cases include:

• 3 to 6 months of personal living expenses

• Business working capital buffers

• Cash reserves for high-net-worth investors

• Temporary parking for large investment transfers

Because the VUSXX fund invests solely in Treasury securities, it is also free from state and local taxes in many states — making it more efficient than many bank-based options for higher income earners. This makes it a compelling vusxx emergency fund solution.

Is the VUSXX Fund a Good Investment in 2025?

In a high-rate environment where safety and liquidity are top priorities, the VUSXX fund continues to deliver on its core promise: stable income with minimal risk.

Whether you’re a cautious investor building your emergency fund, a business safeguarding short-term capital, or a retiree looking for a temporary cash equivalent, VUSXX offers a time-tested solution with full Treasury backing.

✅ Key Strengths:

• High credit quality (U.S. Treasuries only)

• Competitive yield (~4.95% as of May 2025)

• Low expenses

• Daily liquidity

While it shouldn’t replace long-term investment strategies, the VUSXX Vanguard fund deserves a place in any portfolio’s short-term allocation — especially when market uncertainty is high.

Recommended Resources

• Official VUSXX Profile on Vanguard

• What Is SEC Yield? — Investor.gov

• Compare Top Treasury Money Market Funds – (soon to be published)

• Is VUSXX State Tax Exempt?

Disclaimer

This article is for informational and educational purposes only. VUSXX.com is an independent financial content site and is not affiliated with Vanguard or the Vanguard Treasury Money Market Fund (Ticker: VUSXX). Always consult a financial advisor before making any investment decisions.