Vanguard Cash Plus Account Review
Written by
Jacob Wade
Edited by
Emily Gadd
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Vanguard Brokerage Services
-
4.0
Pros
- High interest rate
- 1.25 million in FDIC insurance
- Annual fee waivable
- No minimum balance
Cons
- No check-writing privileges
- No ATM access or debit cards
- Annual fee (can be waived)
Vanguard Cash Plus Account Overview
The Vanguard Cash Plus Account is a savings account alternative that offers a bank sweep program with a APY as of Sept. 20, 2024. The annual percentage yield, or APY, will vary and may change at any time.
This account offers no checks or ATMs, but can be used to pay bills directly through the account.
The account offers FDIC insurance up to $1.25 million through partner banks.* And there are no transaction limits on the account that some savings accounts impose.
If you’re a Vanguard customer that doesn’t want to transfer cash off the platform just to earn a high rate-the Vanguard Cash Plus account may fit the bill.
Key Features
Here are the key features of the Vanguard Cash Plus Account:
High Interest Rate
The Vanguard Cash Plus account offers APY on all deposits, with interest being paid monthly. This rate is competitive with other high-yield savings accounts and money market funds.
Automatic Cash Sweep
Dividends and interest payments from your Vanguard investment accounts can be automatically swept into the Cash Plus account. This allows you a simple place to park investment income and still earn yield.
Pay Bills
The Cash Plus account comes with an account and routing number that can be used when paying bills online. You can also attach the accounts to payment apps like Venmo or PayPal for online payments.
Purchase Money Market Funds
In addition to keeping your cash–the Cash Plus account offers access to five different Money Market Funds that you can purchase. These funds are low-risk and may offer even better yield than the Cash Account interest rate. There is a $3,000 minimum for these funds.
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How the Vanguard Cash Plus Account Stands Out
If you’re Vanguard faithful–this account is a simple holding place for the cash in your investment account. Earnings from your investments can be automatically swept into the account and your cash will immediately be put to work–earning yield on all balances.
There are also no minimums and no transaction limits–making this account better than many high-yield savings accounts or money market accounts.
Comparable Cash Account Options
Other brokerages offer cash accounts–with some offering more features and flexibility than the Vanguard Cash Plus account. Here are a few other cash account options to consider:
Schwab Bank Investor Checking™ Account
Schwab offers an Investor Checking account that pays interest on balances and has a host of features, including:
- No monthly fees or minimums
- Check-writing access
- No international ATM fees
- No foreign transaction fees
- Mobile check deposit
- Mobile wallet compatibility
But the account only pays 0.45% APY on deposits and limits FDIC insurance to $250,000 per depositor. If you need more account flexibility, this can be a good fit. But if you want higher yield–the Vanguard Cash Plus account wins.
Fidelity Cash Management Account
The Fidelity Cash Management Account offers a competitive interest rate on deposits–as well as many features you’d find in a standard checking account. You can deposit checks on your phone, get cash from any ATM in the world without fees, and free checks. While the 2.72% rate isn’t nearly as high as Vanguard’s Cash Plus account–Fidelity allows you to completely do away with your traditional checking account and earn a much higher rate on all of your cash–not just your savings.
How To Apply
To apply for a Vanguard Cash Plus account, you’ll need to sign up online. Just like any other bank account, you’ll need to provide personal information, including:
- Full legal name
- Address
- Phone number
- Email address
- Social Security Number
You may also need to provide identifying information, such as a copy of your driver’s license. And you may need to provide basic financial information as well.
Once you’ve applied for the account, you’ll want to connect an external account to deposit funds. There is no minimum deposit or balance requirements to earn the interest rate–so you can start earning as soon as your funds deposit.
Who Vanguard Cash Plus Account Is Best For
The Vanguard Cash Plus account is ideal for existing Vanguard customers that want a high-yield account that can easily be connected to existing Vanguard investment accounts. The account acts as a cash sweep for earnings from your investments–allowing you to earn a high yield without transferring funds elsewhere. Plus you can use it like a checking account to pay online bills or make payments with Venmo or PayPal.
This account can also be a stand-alone high yield account for customers without exiting Vanguard accounts. The APY is competitive with high-yield savings accounts and money market accounts.
Final Take
The Vanguard Cash Plus account is a great addition to any Vanguard investor that wants to earn high yield on their cash. It offers a bit more functionality than a typical high-yield savings account–with the ability to pay bills and use apps like Venmo or PayPal. But it is much more limited than other cash accounts, with no ATM access or check-writing privileges. Overall, the Vanguard Cash Plus account is a simple replacement for high-yield savings accounts–but may not be able to replace all of your bank accounts.
FAQ
- What is the benefit of a Vanguard cash plus account?
- The Vanguard Cash Plus account offers a high interest rate and a simple place to sweep earrings from your Vanguard investment accounts. You can also pay bills from the account and use it with payment apps like Venmo or PayPal. This account also allows direct deposit for your paycheck—allowing you to use it like a checking account and invest easier.
- Can I pay bills with Vanguard Cash Plus?
- Yes, you can pay bills from the Vanguard Cash Plus account using the account number and routing number. You can also connect the account to apps like Venmo and PayPal to make payments as well.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Sept. 23, 2024.
*The Cash Plus bank sweep program offers FDIC insurance coverage. Bank Sweep program balances are held at one or more participating banks, earn a variable rate of interest, and are not covered by SIPC. Balances are eligible for FDIC insurance subject to applicable limits. See the list of participating Program Banks on vanguard.com.
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