VUSXX Review 2026 — Vanguard Treasury Money Market Fund
VUSXX at a glance
| Feature | VUSXX |
|---|---|
| Full name | Vanguard Treasury Money Market Fund (Investor Shares) |
| Ticker | VUSXX |
| Type | Government MMF (Treasury-heavy) |
| 7-day SEC yield (mid-2026) | ~4.40% |
| Net expense ratio | 0.09% |
| Minimum investment | $3,000 |
| Treasury allocation | ~80% |
| Repo allocation | ~20% (mix of Treasury and agency repos) |
| State-tax-exempt % | ~80% of dividends |
| Available at | Vanguard accounts only (for direct purchase); Fidelity / Schwab allow purchase with a transaction fee) |
The two things that make VUSXX stand out: the 0.09% expense ratio (Schwab SNSXX charges 0.34%, Fidelity SPAXX charges 0.42%) and the state-tax-exempt percentage (~80% vs SPAXX's ~35%). On a $100K position, the expense ratio alone saves you $250-330 per year vs the competitors.
Yield history — what VUSXX has actually paid
Approximate VUSXX 7-day SEC yields over the past few years (rounded; these are not investment recommendations):
| Period | VUSXX 7-day yield | Context |
|---|---|---|
| 2020 (post-COVID rate cuts) | 0.01% – 0.10% | Fed funds at 0-0.25% |
| 2021 | 0.01% – 0.05% | Continued zero-rate regime |
| 2022 (Fed hiking) | 0.01% → 4.30% | 9 rate hikes in 12 months |
| 2023 | 4.50% – 5.30% | Fed funds 5.25-5.50% |
| 2024 | 5.20% – 4.70% | 3 Fed cuts (Sep/Nov/Dec) |
| 2025 | 4.60% – 4.30% | Continued slow cutting |
| Mid-2026 | ~4.40% | Fed in pause/slow-cut mode |
VUSXX tracks the Fed funds rate with a 1-2 week lag. After a Fed rate cut, VUSXX yield drops ~25 bps within a week or two. After a hike, yield rises with the same speed. The yield is not locked in — it floats daily.
For someone parking cash for 0-12 months, VUSXX's yield will probably average within 25-50 bps of its current level. For 12+ months, the yield will move with Fed policy — potentially down 100-150 bps over a full cutting cycle.
State-tax math — the actual advantage
Worked example — $250,000 in VUSXX vs Fidelity SPAXX, California resident, 9.3% state bracket, 24% federal:
| Item | VUSXX (~80% TX-exempt) | SPAXX (~35% TX-exempt) |
|---|---|---|
| Gross yield | 4.40% | 4.10% |
| Gross annual income (on $250K) | $11,000 | $10,250 |
| State-exempt portion | $8,800 (80%) | $3,588 (35%) |
| State-taxable portion | $2,200 | $6,663 |
| CA tax @ 9.3% | $205 | $620 |
| Federal tax @ 24% | $2,640 | $2,460 |
| Net after-tax income | $8,155 | $7,170 |
| Net after-tax yield | 3.26% | 2.87% |
VUSXX outperforms SPAXX by 39 bps net of tax for a CA resident — worth roughly $985 per year on a $250K balance. The advantage compounds with portfolio size.
For tax-free states (TX, FL, WA, NV, SD, TN, WY, AK), the state-tax advantage disappears, but VUSXX still wins by ~30 bps pre-tax thanks to the lower expense ratio. VUSXX is essentially the best-in-class retail Treasury MMF for any account.
Holdings — what's actually inside
VUSXX targets ~80% direct Treasury bills (4-week, 13-week, 26-week, occasionally 52-week) and ~20% repos. The repo portion is split between Treasury-backed repos (state-tax-exempt) and agency-collateralized repos (not state-tax-exempt). This composition shifts month to month based on relative yields.
Why the state-tax-exempt percentage isn't 100%: The repo portion is interest on a loan, not interest on a Treasury, and so doesn't qualify for federal-state exemption under §3124 of the Internal Revenue Code. Vanguard publishes the precise state-exempt percentage each January in the "U.S. Government Obligations" document at vanguard.com.
The state-exempt percentage has trended:
- 2020: ~75% exempt
- 2021: ~85% exempt
- 2022: ~90% exempt (higher Treasury allocation during Fed hiking)
- 2023: ~80% exempt
- 2024: ~78% exempt
Plan for ~80% exempt as a working assumption; pull the actual figure annually for your tax return.
VUSXX vs direct T-bill ladder — when each wins
For institutional-scale investors ($1M+ of stable cash), a direct T-bill ladder beats VUSXX by 20-30 bps after the 0.09% expense ratio. The trade-off: you manage maturities yourself.
Direct T-bill ladder example — $1M across 4 maturities:
- $250K in 4-week T-bills (rolling every 4 weeks)
- $250K in 13-week T-bills (rolling every 13 weeks)
- $250K in 26-week T-bills (rolling every 26 weeks)
- $250K in 52-week T-bills (rolling annually)
Weighted yield: ~4.45% (vs VUSXX 4.40% + 0.09% expense = 4.49% gross, 4.40% net). The ladder is essentially yield-neutral with VUSXX, but with 100% state-tax exemption (no repo drag) and no carrier risk — direct Treasury ownership has zero counter-party exposure.
For most retail investors with under $500K of cash, VUSXX is the better operational choice. The 9 bps expense ratio is a fair price for the maturity management Vanguard handles for you.
Where to buy VUSXX
Vanguard directly — the obvious path
Open a Vanguard brokerage account. Fund it. Buy VUSXX with no transaction fee, no minimum beyond the $3,000 fund minimum. Vanguard's interface is dated but functional.
Fidelity or Schwab — with a transaction fee
VUSXX is available at most major brokerages but typically incurs a transaction fee of $20-50 per buy/sell (it's a Vanguard mutual fund, not a Vanguard ETF). For one-time large allocations this is fine; for active rebalancing the fees add up.
If you're a Fidelity loyalist who wants the same Treasury-heavy MMF without leaving Fidelity, use FZFXX (Fidelity Treasury Money Market Fund). Slightly higher expense ratio (0.42%) but comparable Treasury allocation and no transaction fee.
If you're at Schwab
SNSXX is the closest Schwab equivalent (Treasury-only, no repos). Higher expense ratio (0.34%) and slightly lower yield, but same general profile. See our SNSXX comparison.
Related reading
- SNSXX vs SWVXX (Schwab) comparison
- SPAXX vs FDRXX (Fidelity) cash sweeps
- Buying Treasuries step-by-step
- I-Bond vs CD vs TIPS
- Jumbo CD vs MYGA
Want my independent take on whether this fits your situation?
I'm Hans Goldstein — independent licensed insurance producer (NPN 20602398), appointed with multiple A-rated carriers. I run side-by-side comparisons against CDs, MYGAs, Treasuries, and MMFs every week for retirees and pre-retirees. Tell me what you're considering and I'll send back a written comparison.
Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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FAQ
Q: Is VUSXX FDIC-insured?
A: No. VUSXX is a money market fund, not a bank deposit. It's held in a brokerage account with SIPC protection (up to $500K of securities including MMF shares). The underlying holdings are direct US Treasury obligations — effectively risk-free at the holdings level.
Q: How does VUSXX compare to a Treasury ETF like BIL or SHV?
A: VUSXX maintains a $1.00 NAV (no price fluctuation); BIL and SHV trade at market prices that fluctuate slightly. VUSXX is more "cash-like"; the ETFs are more "short-bond-fund-like." Yields are within 5-15 bps of each other. ETFs are better for tax-loss harvesting opportunities; VUSXX is better for pure cash parking.
Q: Is VUSXX better than I-Bonds?
A: Different products. VUSXX = daily liquidity, current yield ~4.40%. I-Bonds = 12-month minimum hold, $10K annual limit per person, yield = fixed rate + inflation rate (variable). For 12-month money: VUSXX wins on liquidity. For 5+ year inflation hedge: I-Bonds win on real return.
Q: Can I hold VUSXX in a Roth IRA?
A: Yes, VUSXX is eligible in all Vanguard account types: taxable brokerage, Traditional IRA, Roth IRA, SEP-IRA, SIMPLE, solo 401(k). State-tax-exempt percentage has no value inside an IRA.
Q: What's the minimum to invest in VUSXX?
A: $3,000 for Investor Shares (VUSXX). Vanguard removed the Admiral-share tier on this fund a few years ago, so the $3,000 minimum is the only minimum.
Q: How fast can I get money out of VUSXX?
A: Same business day if sold before market close. Funds settle T+0 and can be wired or ACH'd same or next business day. No early redemption fees, no minimum holding period.
Q: Does VUSXX pay dividends monthly?
A: Yes, monthly. Dividends accrue daily and are paid as cash (or reinvested in additional shares if you choose) on the last business day of each month.
Q: What's the difference between VUSXX and VMFXX?
A: VMFXX = Vanguard Federal Money Market Fund. Higher repo / agency allocation, lower Treasury allocation, lower state-tax-exempt percentage (~25-35%). VUSXX is the better choice for state-tax efficiency; VMFXX is the default Vanguard sweep option.
Disclosure
This article is general educational information, not personalized financial, tax, or legal advice. All rates, IRS limits, Social Security PIA factors, IRMAA brackets, FDIC/NCUA coverage, and state guaranty fund coverage figures are current as of the publication date and subject to change. IRMAA brackets and Roth/Traditional IRA limits cited reflect IRS guidance for 2026 and may be updated by the IRS or SSA; confirm current figures at irs.gov and ssa.gov before acting. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated annuity carriers; he does not sell bank CDs, money market funds, or Treasury securities and is not affiliated with any bank, brokerage, or government agency discussed. No compensation has been received from any third party in connection with this article. Bank CDs are FDIC-insured deposit products; credit union share certificates are NCUA-insured; money market funds are SEC-regulated investment products with no FDIC coverage; Treasuries are direct obligations of the U.S. government; MYGAs are insurance contracts backed by carrier balance sheets and state guaranty associations. These are different product categories with different protections, tax treatments, and trade-offs. Always confirm current rates and tax law with the issuer or a CPA before acting.