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Vanguard Cash Plus Account Review: Barebones Banking With High Yields

Review Updated
Dana George
Cole Tretheway
By: Dana George
Dana George
Dana George
Writer

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.

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 and  Cole Tretheway
Cole Tretheway
Cole Tretheway

Cole Tretheway is a full-time personal finance writer whose articles have been featured on The Ascent and The Motley Fool. He has a degree in English with a Certificate in Professional and Technical Communication from California Polytechnic University, SLO.

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Eric McWhinnie

Eric McWhinnie has been writing and editing digital content since 2010. He specializes in personal finance and investing. He also holds a bachelor’s degree in Finance.

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Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield. APYs are subject to change at any time without notice.

The Vanguard Cash Plus Account is a cash management account. It pays a high annual percentage yield (APY) on your short-term cash. It's a smooth addition if you already use Vanguard. But it stands on its own, offering much better rates than your typical savings account.

We see you, Vanguard. Below, we'll deep dive into the Vanguard Cash Plus Account so you can decide whether it's right for you.

Ratings Methodology
Rates as of Jun 29, 2024

Vanguard Cash Plus Account

Member FDIC.
APY
4.60%
Min. To Earn APY
$0.01
  • 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
  • Option to put cash in money market funds
  • 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

The Vanguard Cash Plus account gives Vanguard users a place to put cash and earn interest. It doesn't offer a debit card, ATM accesss, or check writing. Still, this cash management account offers great FDIC insurance and diversified money market funds. Open an account for a barebones place to earn interest on cash.

Compare checking accounts

We recommend comparing checking accounts to make sure you're getting the best fit for you. Here's a list of our favorite accounts.

Account APY Promotion Next Steps
0%
Min. to earn: N/A
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up to 1.10%
Min. to earn: $1
High APY when you complete 10 or more qualifying debit card purchases each month
0.40% (up to 3.30%)
Rate info Circle with letter I in it. 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
Cash in on up to a $500 bonus† and up to 3.30% APY* with a new Rewards Checking account. Just use promo code RC500 before July 31.

Vanguard Cash Plus Account interest rate

Account APY Minimum Balance
Vanguard Cash Plus Account 4.60% $0
Source: Vanguard

Full Vanguard Cash Plus Account review

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.

Vanguard withdrawal limit

You can withdraw up to $100,000 per business day, which is quite high. There is no limit to how often you can make withdrawals, so long as you stay beneath the daily maximum.

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 Vanguard, Wealthfront charges zero account fees. You also get access to unlimited transfers and free same-day withdrawals, plus 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 some unique features. It offers you a checkbook to pay bills and lets you set up a Fidelity BillPay account to make mobile payments. You get a debit card, and as long as you use an ATM displaying the Visa, Plus, or Star logos, Fidelity reimburses all ATM fees. Finally, you can connect your account to digital wallets -- super convenient.

Is a Vanguard Cash Plus Account right for you?

The Vanguard Cash Plus Account is a good fit for you if:

  • You want to do your investing and cash management at one place, Vanguard.
  • You're comfortable operating without check-writing privileges.
  • You're OK with transferring money to another account when you need cash, waiting up to one business day per transfer.

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

  • 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.

  • No, there is no limit.

  • 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.