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  4. 7 Day Funds Hold Period At Vanguard To Buy Brokered Cd's And Bonds?

7 Day Funds Hold Period At Vanguard To Buy Brokered Cd's And Bonds?

sams1985
  |     |   781 posts since 2022

Just a heads up if anyone is considering this option- between the 7 day hold period and 3-5 business days for the ACH transfer of funds, it could take potentially two weeks before you are able to buy a treasury bond or brokered CD through vanguarid. Is it the same with Fidelity or Schwab ? Seems like you have to keep your money on call, earning 0% interest, to snag a CD deal.

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alan1
  |     |   877 posts since 2015
"Seems like you have to keep your money on call, earning 0% interest, to snag a CD deal."
Where did you get the 0% interest figure from?

The 7-day SEC yield on Vanguard's settlement fund (VMFXX) is 2.16% as of Sept. 16, 2022.
https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx#price

"3-5 business days for the ACH transfer of funds"
Where did you get the 3-5 business days timetable from?

When I transfer funds to Vanguard, their website always tells me to allow 2-3 business days for funds to arrive (2 days if transfer initiated during market hours, otherwise three days). When I initiate the transfer during market hours, it's almost always only one business day.

"the 7 day hold period"

The hold period (I don't recall whether it's six or seven days) prevents you from withdrawing funds from Vanguard. It permits you to make trades. I recall seeing language on Vanguard's website that indicates that such funds may not be available for certain trades during that period, but I've never had a problem in that regard. But, yes, there is certainly a possibility that you'd have to wait until the expiration of the hold period.
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sams1985
  |     |   781 posts since 2022
It took 3 days for my funds to show up and regarding the hold period, i went to purchase a cd today and received the following message: "This order can't be accepted because the funds available are the result of a recent deposit into your account that has not yet cleared our 7 day hold on recent deposits."
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Blade
  |     |   49 posts since 2018
I recently purchased a brokered CD from Vanguard and the settlement cash remained in my money market account (earning interest) until the CD was settled so don't worry about that one. What I don't like about Vanguard is how long it takes to add a new bank or CU to your account so you may ACH funds. I recently added a new CU onto my Vanguard brokerage account. The process went smoothly but Vanguard clearly stated I would only be able to transfer funds in from the new CU to Vanguard for 7 to 10 days for "security reasons" - I could not transfer out during that time. The whole point of setting up the new CU was to transfer funds out to purchase a CD from the CU which I almost missed due to this overly long hold time. Luckily, I had already linked my Citizens MM account months earlier, so I sent the funds there. Citizens linked within two days to the new CU and does not require any additional hold times once a new account is linked. Once you're past the initial "7 to 10" day ACH hold window with a newly linked account, I've found ACH transfers to go quickly in both directions with my Vanguard brokerage account.
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RZ
  |     |   391 posts since 2017
Along with long wait times this is another annoyance when dealing with Vanguard. I qualify for free wires so if the funds are already in the settlement fund a same day wire is possible if you can reach a csr before 1PM EST. The long hold for ACH deposits is unreasonable.
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