Wow, you're right. I'm used to yields including compounding, but this being the exception makes the money market better by comparison than it had seemed otherwise.I thought the 5.3% is before compounding. 5.42% is the yield when taking compounding into account, according to VUSXX product page
The quoted interest rates are after the expense ratio, which is already very low at least with Vanguard. 7-day yield is the annualized interest rate over the last 7 days, which varies over time. If the rate held steady, a 5.3% interest rate would indeed give you $5300 interest in the first year. However that includes compounding you'd get slightly less than 1/12 of that in the first month.
Statistics: Posted by patrick — Sat Jun 29, 2024 12:33 am — Replies 22 — Views 1277
