The Vanguard Cash Plus Account lets you keep your short-term savings with Vanguard. Like with a savings account, you get FDIC protection on balances and a competitive APY. But transfers to your other accounts can take up to a day to go through, and you can't withdraw from the account at an ATM.
A Vanguard Cash Plus Account is a solid add-on if you already use Vanguard. You get account and routing numbers to pay bills and set up direct deposit. Thanks to its banking partners, the broker gives you better coverage than what most banks offer.
Top perks
Great FDIC coverage: Thanks to its sweep program, Vanguard automatically moves funds from your Vanguard Cash Plus Account to partner bank accounts. Because the FDIC insures up to $250,000 per depositor, per bank, per ownership category, Vanguard makes sure to never sweep more than that to any one bank. Instead, it spreads the funds out. This ensures they are FDIC insured for up to $1.25 million in individual accounts and $2.5 million in joint accounts.
Fee free: Few things in life are free, but this account is. The caveat is you must opt into getting your documents delivered electronically. Otherwise, Vanguard will charge you $25 per year. You can sign up for electronic delivery (aka email) during or after opening an account.
No minimum balance required: You can take advantage of the cash management account's better-than-average APY with as little as $0.01.
Competitive rates: The current APY of 4.60% is right up there with some of the best high-yield savings account rates. It's nearly as high as some current money market account (MMA) rates at other financial institutions.
Money market funds: Vanguard lets you quickly put money in up to five of its money market funds. It's a neat feature that quickly diversifies your short-term savings. It's a bit exclusive though -- each fund requires a $3,000 investment minimum.
What could be improved
Easier access to funds: Vanguard doesn't offer a linked debit card or ATM access. You can pay bills, but to get cash or swipe a card, you need to transfer money to another account. This can take up to one business day.
Check-writing privileges: You don't receive a checkbook. Some competitors offer this feature.
Recurring transfers: You can set up direct deposits, but you can't set up recurring transfers. Recurring transfers make it easier to send money to other accounts.
Overdraft protection: Vanguard doesn't offer overdraft protection. If you don't have the money in your account to pay for something, you can't pay, period.