Seven-day yield vs. 30-day yield
The seven-day and 30-day yields sound like they should be a lot alike, and they are, in a way. Both seven-day yield and 30-day yield calculations are regulated and required by the SEC, but a 30-day yield calculation is performed on a bond fund; a seven-day yield calculation is for money market fund accounts.
It might sound like a 30-day yield calculation would be more stable, but because money market funds are very reliable investments, it's generally assumed that a week is a reasonable time frame to predict future performance. The 30-day yield calculation is also done on fairly stable investments, but because bonds are traded frequently in bond funds, it gives a better picture of payouts, which may vary throughout the month.
How to calculate seven-day yield
The seven-day yield is simple to calculate and does exactly what you might expect. You'll need the price at the end of the designated seven-day window, plus any distributions, the price at the start of the window, and the fees during that week.
Here's the formula:
E = End price plus distributions
S = Start price
F = Fees
Seven-day yield = ((E - S - F) / S) x 365/7
So, if your money market fund account went from $930 to $1,000 this week and you paid 0.4% in fees ($4.00), your formula would look like this:
(($1,000 - $930 - $4) / $930) x 365/7 = 3.70%, which is your seven-day yield.
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