VUSXX vs VMFXX: Which Should You Pick?
Vanguard's Treasury-only fund against its settlement fund. Both keep their CA/CT/NY exemption; VUSXX's covers all its income, VMFXX's two-thirds. $3,000 minimum. With a calculator.
VMFXX is Vanguard’s settlement fund and holds Treasuries, agency paper and repurchase agreements; VUSXX holds Treasuries only, at a lower expense ratio and a $3,000 minimum. Both keep a $1.00 share price, and both pass the California, Connecticut and New York quarterly test, so the tax gap is the third of VMFXX’s income that comes from repurchase agreements.
Quick answer
VUSXX for stored cash in a state with an income tax, once you clear the $3,000 minimum. For 2025 Vanguard reported 100% of its income as Treasury interest against 66.61% for VMFXX, with both funds passing the CA/CT/NY test. For one modeled California saver at 32% federal and 9.3% state the gap was about $80 a year on $50,000; about $54 in a 5% state; about $24 with no state tax, which is just the seven basis points of yield. Moving between them realizes nothing. Keep cash for upcoming purchases in VMFXX, since it is the settlement fund and deposits land there anyway.
| VUSXX | VMFXX | |
|---|---|---|
| Holdings | US Treasuries only | Treasuries, agencies, repurchase agreements |
| 7-day SEC yield, Sep 4 2026 | 3.70% | 3.63% |
| Expense ratio | 0.07% | 0.11% |
| 2025 income from US gov't obligations | 100.00% | 66.61% |
| CA / CT / NY quarterly test | Passed | Passed |
| Settlement fund | No; bought separately | Yes; the default |
| Minimum | $3,000 | None in practice |
| Share price | $1.00 | $1.00 |
Who should pick which
Buy VUSXX with stored cash if your state has an income tax and the balance is comfortably above the minimum.
Leave it in VMFXX in a state with no income tax, where the only difference is seven basis points, inside an IRA, or for cash that will fund a purchase soon.
Does this decision matter?
Yields are Vanguard’s published 7-day SEC yields for September 4, 2026. Government-obligation percentages are for tax year 2025 and are republished each January.
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