Review
Updated
Fact Checked
Ashley Maready
Vanguard is an investment management company, but that doesn't stop it from offering its Vanguard Cash Plus Account. This account allows investors to earn a high annual percentage yield (APY) while deciding if (and where) they want to invest their funds. Read our full review to learn about everything the Vanguard Cash Plus Account has to offer and decide whether it's right for you.
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Ratings Methodology
Rates as
of Apr 27, 2024
Vanguard Cash Plus Account
Member FDIC.
APY
4.70%
Min. To Earn APY
$0.01
- Thanks to "sweeps," account holders receive FDIC coverage up to $1.25 million for individual accounts and $2.5 million for joint accounts
- No account fees
- No minimum balance required
- Competitive interest rates
- No debit card or ATM from which to access your funds
- No check-writing capability
- No automated recurring transfers from outside financial institutions
- No access to an overdraft source
While the Vanguard Cash Plus Account offers several attractive features, like a very competitive APY, the drawbacks, such as no debit card, ATMs, or check-writing capabilities, may outweigh the benefits.
Checking account comparison
We recommend comparing checking account options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of standout accounts.
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| Account | APY | Promotion | Next Steps |
|---|---|---|---|
Rating image, 4.00 out of 5 stars.
4.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
0%
Min. to earn: N/A
|
Earn 1% cash back on up to $3,000 in debit card purchases each month (see details when you click 'Open Account')
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Rating image, 4.75 out of 5 stars.
4.75/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
0.50%
Rate info
You can earn the maximum savings APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn: $0
|
Cash bonus up to $300 with direct deposit set up (see details when you click 'Open Account')
|
|
Rating image, 4.25 out of 5 stars.
4.25/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
0.40% (up to 3.30%)
Rate info
To earn the full APY, account holders must do all of the following: Receive monthly direct deposits totaling more than $1,500; make 10 transactions a month with your Axos debit card, or sign up for Axos's Personal Finance Manager; maintain an average daily balance of $2,500 per month in an Axos Invest Self Directed Trading Account; and use your Rewards Checking account to make your full monthly Axos Bank consumer mortgage, personal, or auto loan payment.
Min. to earn: Monthly direct deposits totaling at least $1,500
|
Use promo code AXOS300 and apply by June 30th, to earn up to a $300 bonus!
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Vanguard Cash Plus Account interest rate
| Account | APY | Minimum Balance |
|---|---|---|
| Vanguard Cash Plus Account | 4.70% | $0 |
Source: Vanguard
Full Vanguard Cash Plus Account review
The Vanguard Cash Plus Account is billed as a savings account of sorts, and that would be true if the account was as convenient as a traditional savings account. But if you want access to your money, you'll have to wait at least one day for a transfer to go through (and possibly longer). Still, if you're determined to keep a cash account open to fund trades, you could do worse than the Vanguard Cash Plus Account.
Top perks
Great FDIC coverage: Thanks to its sweep program, Vanguard automatically transfers funds from a client's Vanguard Cash Plus Account to its partner bank accounts. And because FDIC insures up to $250,000 per account, per depositor, Vanguard makes sure to never sweep more than that amount to one particular bank. Rather, it spreads the funds out, ensuring the funds are FDIC insured for up to $1.25 million for individual accounts and $2.5 million for joint accounts.
Fee free: Few things in life are free, but this account is.
No minimum balance required: Requiring no minimum balance allows anyone to take advantage of the high APY.
Competitive rates: The current APY of 4.70% is right up there with some of the best high-yield savings account rates, and nearly as high as some current money market account (MMA) rates at other financial institutions.
What could be improved
Easier access to funds: Unless you're able to withdraw the funds you need from an ATM, how long a transfer will take to deposit into an outside bank account depends on several factors, including the time of day the transfer is requested.
Check-writing privileges: Unlike some cash accounts, customers do not receive a checkbook.
Recurring transfers: Let's say a Vanguard Cash Plus Account customer wants to transfer money from an outside bank account on each payday. As of now, they cannot set up recurring transfers (although they can set up a direct deposit through their employer or pension source).
Overdraft protection: If, for some reason, a customer overdrafts their cash account, there is currently no backup system in place. For example, they can't use the funds in a Vanguard money market fund to cover the overdraft.
Alternatives to a Vanguard Cash Plus Account
If Vanguard doesn't have what you're looking for, one of these other investment firms might.
Wealthfront Cash Account
For as little as $1, one can open a Wealthfront Cash Account and earn an impressive 5.00% APY. Like the Vanguard Cash Plus Account, customers are not hit with account fees. They also have access to unlimited transfers and free same-day withdrawals, and up to $8 million in FDIC insurance through Wealthfront partner banks.
Fidelity Cash Management Account
The Fidelity Cash Management Account isn't perfect, but it does offer features one might miss as a Vanguard customer. For example, it comes with a checkbook to pay bills and allows users to set up a Fidelity BillPay account to make mobile payments. Customers also receive a debit card and as long as they use an ATM displaying the Visa, Plus, or Star logos, Fidelity reimburses all ATM fees. Finally, customers can connect their accounts to digital wallets for the ultimate convenience.
Vanguard withdrawal limit
You can withdrawal up to $100,000 per business day, which is quite high.
Is a Vanguard Cash Plus Account right for you?
The Vanguard Cash Plus Account is a good fit for you if:
- You're a loyal Vanguard brokerage customer and want to maintain a cash account under the same roof.
- You are comfortable operating without check-writing privileges.
- You have the time and patience to transfer money to another account when you want or need access to cash.
Other Vanguard accounts
- Individual and joint brokerage accounts: Flexible enough to allow withdrawals as needed, without the burden of withdrawal penalties.
- IRAs: Traditional and Roth IRAs available, each offering a different tax break.
- 529 savings: Designed to save for education.
- Small business retirement plans: Vanguard offers Individual 401(k)s, SEP IRAs, and SIMPLE IRAs.
- UGMA/UTMA: A Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) Account is owned by a minor but managed by an adult until the child comes of age.
- Trust accounts: A legal arrangement in which a grantor allows a trustee to manage assets on behalf of trust's beneficiaries.
- Organization accounts: Held by legally established companies, an organization account offers trading and investment features designed to help companies work toward financial goals.
- Vanguard Federal Money Market Fund: Requires a $3,000 minimum investment, with most funds allowing access to money without penalty.
- Vanguard Cash Deposit: Acts as a settlement fund, a spot to hold money the account holder intends to use for trading.
- Vanguard Brokered CD: While most CDs pay compound interest, the Vanguard Brokered CD pays simple interest. That means you won't earn interest on your previous earnings. Requires a $1,000 minimum deposit.
Our checking account methodology
At The Motley Fool Ascent, we rate checking accounts on a five-star scale (1 = poor, 5 = best). We evaluate all checking accounts across four main criteria: brand and reputation, APY and rewards, fees and minimum requirements, and perks.
Our scores are weighted as:
- Brand and reputation: 30%
- APY and rewards: 30%
- Fees and minimums: 15%
- Other perks: 15%
Learn more about how The Motley Fool Ascent rates bank accounts.
FAQs
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APY is important, but not the only factor worth considering. For example, if you want to use a brokerage cash account like you would normally use a checking account, it's important to find out if the brokerage in question allows you to write checks. In other words, decide which features are most important for you before deciding on a particular cash account.
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No, there is no limit.
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The best way to gauge if it's right for you is to compare the account with other brokerage cash accounts. No two are precisely the same and you're most likely to find the features you're looking for by shopping around.
Our Banking Experts
Dana George has a BA in Management and Organization Development from Spring Arbor University. For more than 25 years, she has written and reported on business and finance, and she's still passionate about her work. Dana and her husband recently moved to Champaign, Illinois, home of the Fighting Illini. And though she finds the color orange unflattering on most people, she thinks they'll enjoy Champaign tremendously.
Fact Checked
Ashley Maready
Ashley Maready is a former history museum professional who made the leap to digital content writing and editing in 2021. She has a BA in History and Philosophy from Hood College and an MA in Applied History from Shippensburg University. Ashley loves creating content for the public and learning new things so she can teach others, whether it's information about salt mining, canal mules, or personal finance.
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