Young woman calculating the interest after reading a Vanguard Cash Plus Account review online.

Vanguard Cash Plus Account Review [2024 – Pros and Cons of This Savings Account Alternative]

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The average American saves 5.1% of their income – but saving is only half the battle. 

The second step is to look for places where you can invest. That way, your savings can grow, and you’ll have even more money to fall back on. 

Vanguard is an investment management company that specializes in helping ordinary folks invest their savings. 

And recently, the company announced a new opportunity: the Vanguard Cash Plus Account.

In this Vanguard Cash Plus Account review, I’ll tell you how it works – and help you decide if it’s the right place for your savings.  

What is a Vanguard Cash Plus Account?

A Vanguard Cash Plus Account is a type of cash investment that helps you grow your money while keeping it accessible. Basically, it’s an alternative to a typical savings account, and it’s designed for convenience.

According to Vanguard, there are three reasons to consider a Vanguard Cash Plus Account and similar cash investments:

  1. It’s low risk. Not only are these types of accounts generally safe, but the Federal Deposit Insurance Corporation (FDIC) also insures individual accounts for up to $1.25 million. 
  1. Your money remains accessible. You can set up direct deposit with employers and connect your account to Paypal, Venmo, and other payment services. In this way, the Vanguard Cash Plus Account acts almost like a checking account.
  1. Your money will grow. The account pays interest, with the annual percentage yield (APY) changing according to market conditions. The rate can go as high as 4.5% – not bad for a low-risk investment.

So if you want your savings to grow without putting your money out of reach, the Vanguard Cash Plus Account is an excellent option. 

Gentleman sitting at computer reading a Vanguard Cash Plus Account review online.
A Vanguard Cash Plus Account is an alternative to a savings account.
Source: Unsplash

How to Sign Up for a Vanguard Cash Plus Account?

To sign up for a Vanguard Cash Plus Account, you must be an existing Vanguard customer. This program is still in the “pilot stage,” which means Vanguard isn’t opening it up to everyone (yet). 

The Vanguard Cash Plus Account also has eligibility requirements, and Vanguard clearly states that “not all Vanguard clients will be eligible to open a Cash Plus Account.”

But if you are a Vanguard customer, checking your eligibility should be simple. 

Just go to the official website’s “Cash Investments” page, then find the Vanguard Cash Plus Account and click “Log in to see if you’re eligible.” 

But what if you’re not a Vanguard customer? 

Well, your first step is to sign up for an account. Here’s how to do it:

  1. Go to the official Vanguard website.
  2. Under “Our sites,” click “Personal Investors.”
  3. Click “Open an Account,” then follow the instructions.

You’ll need to decide which type of account you’d like to open. Keep in mind that the Cash Plus Account won’t be an option. That’s because it’s only available to existing Vanguard customers. 

So, you’ll have to keep your money in a basic Vanguard settlement fund or some other fund, then move it to the Cash Plus Account if you become eligible.  

Is Vanguard Cash Plus Legit?

The Vanguard Cash Plus Account is totally legit. This isn’t some financial scam. It’s a standard account run by a massive, reputable company.

If you’re unfamiliar with Vanguard, let me assure you – it’s a completely trustworthy brand. 

Vanguard is considered an investment management company. It has more than 30 million investors all over the world and over $8 trillion in assets. 

Yes, that’s “trillion” with a T!

Vanguard runs all sorts of mutual funds, bond funds, and cash fund accounts. Its unique structure, with individual investors essentially “owning” the company. This allows it to charge lower fees. It also provides new investors with an easy way to begin growing their savings.

So yeah. Vanguard is legit, and you can trust that they’ll treat you fairly. 

Is Vanguard Cash Plus Safe? 

The Vanguard Cash Plus Account is a low-risk account offered by a legitimate company, so you can’t get much safer.  

Some investments are much riskier than others. If you buy stock in a company or invest in a piece of land, you could lose money when the stock or lot decreases in value. 

But the Vanguard Cash Plus Account doesn’t involve this sort of risky investment. It’s more like putting your money in the bank.

There are two layers of safety with the Vanguard Cash Plus Account:

  1. These types of accounts have very little risk.
  2. Even if your money did somehow disappear, the FDIC insures up to $1.25 million for each individual account. Basically, that means the government would pay you back if your money somehow went away.
Person holding cash they made after reading a Vanguard Cash Plus Account review.
The Vanguard Cash Plus Account can be a great place to grow your savings.
Source: Unsplash

Pros and Cons of a Vanguard Cash Plus Account

We’ve reached the heart of this Vanguard Cash Plus Account review. This is the part where I discuss what’s great about the service and what falls short. 

Pros

  • Low risk. These types of accounts are designed for people who don’t want to lose their money.
  • No fees. Opening and maintaining an account is completely free.
  • No minimum balance. You can keep as much or as little in the account as you’d like. 
  • Decent interest rates. The APY varies according to the federal interest rate and other factors, but it’s reached as high as 4.5%.
  • Money remains accessible. You’ll get routing and account numbers, making it easy to transfer money or make payments. 

Cons

  • Not available to new Vanguard customers. If you don’t already have a Vanguard account, you won’t be able to open a Cash Plus Account right away.
  • It’s still in the “pilot” stage. This is a new type of account, and Vanguard still hasn’t rolled out all of its features. 
  • Less chance of huge returns. You can consider this a low-risk, low-reward investment. The APY is decent, but if you’re after massive returns, you’ll probably have to try something riskier.

Vanguard Cash Plus Account Reviews

Vanguard is a massive company, which means plenty of people have posted reviews online. Most of those reviews are positive, but not all of them. That’s why Vanguard has a 3.4-star rating on ConsumerAffairs.

One reviewer described how her father trusted Vanguard, and now she’s using it successfully, too.

Vanguard has been around since 1975, meaning generations of investors have benefited from its services! 

 Five-star Vanguard Cash Plus account review from ConsumerAffairs.
A Vanguard client says the company has helped them manage their affairs.
Source: ConsumerAffairs

While Vanguard is certainly a reputable company, it does seem to be lacking in one important area: customer service. 

Check out this review to see what I mean:

Negative Vanguard review from customer complaining about the company’s poor customer service.
A Vanguard client says the company’s customer service is rude and unhelpful.
Source: ConsumerAffairs 

The Vanguard Cash Plus Account is still relatively new, so there aren’t too many people sharing their experiences with that particular product. 

Still, I was able to find one Vanguard Cash Plus Account review where someone said the pilot closed before they could become eligible.

An online reviewer who was unable to sign up for the Vanguard Cash Plus account pilot.
A reviewer says they tried to sign up for the Vanguard Cash Plus Account but found the pilot was closed.
Source: Bogleheads

In another Vanguard Cash Plus Account review, someone who hadn’t yet opened an account praised it as “a low-cost, high-yield option.”

An online reviewer praising the new Vanguard Cash Plus account option.
Someone describes the Vanguard Cash Plus Account as a “low-cost, high-yield option.”
Source: Bogleheads

So the jury’s still out on this new product from Vanguard, but people are clearly intrigued!

Vanguard Cash Plus Account Reviews Reddit

I found a Reddit thread where someone asked about the Vanguard Cash Plus Account. They were looking for people to share their experiences with the service.

A person on Reddit looking for people to share their experience with the new Vanguard Cash Plus account.
Someone on Reddit asks for a Vanguard Cash Plus Account review.
Source: Reddit

In the responses, it becomes clear that the Vanguard Cash Plus Account makes sense for some people and not for others. 

It’s great if you want an online savings-type account with a decent APY, but it doesn’t appeal to people who need an ATM card or personal checks.

A person on Reddit stating that they will not be looking into the Vanguard Cash Plus account because it doesn’t offer an ATM card or checks.
A Reddit reviewer says they’re passing on the Vanguard Cash Plus Account because it doesn’t offer an ATM card or personal checks.
Source: Reddit 
A reviewer on Reddit expressing that they believe the new Vanguard Cash Plus account is a good way to boost online savings.
A Redditor says the Vanguard Cash Plus Account is a good option for internet savings.
Source: Reddit
Positive Vanguard Cash Plus account review from a customer on Reddit platform.
A reviewer on Reddit praises the Vanguard Cash Plus Account and similar services.
Source: Reddit

Is Vanguard Cash Plus Worth It? 

The Vanguard Cash Plus Account is worth it for certain investors.

The goal of this Vanguard Cash Plus Account review isn’t to tell you straight-up whether to get the account or not. I simply want to give you all the information you need to make your own decision. 

So ask yourself some basic questions:

  • Do you already have a Vanguard account?
  • Are you looking for a low-risk place to park your savings and make modest gains through interest?
  • Would you like an alternative to a savings account where you can pay bills and make direct deposits?

If you answered “yes” to those three questions, then a Vanguard Cash Plus Account is seriously worth considering. 

So head over to the official Vanguard site to check your eligibility! 

Commonly Asked Questions About Vanguard Cash Plus

What are Alternatives to Vanguard Cash Plus?

Vanguard offers other cash investments besides the Cash Plus Account. You could try a money market fund or a brokered CD (certificate of deposit). They’re both available to new Vanguard customers, so you shouldn’t face eligibility issues.  

Is Vanguard Cash Deposit a Good Idea?

Vanguard Cash Deposit is a good idea for anyone who already has a Vanguard account and wants FDIC insurance for their savings. It’s basically an alternate “settlement fund” or another place where you can “park” the money in a Vanguard account.

Does Vanguard Have a High Yield Savings Account?

The Vanguard Cash Plus Account is essentially a high-yield savings account, with the annual percentage yield (APY) reaching 4.5% at the time of this publication. 

What are the Cons of Vanguard? 

There are a few downsides to using Vanguard, including:

  • Higher minimum investments for some funds/accounts
  • It takes a few days to open an account
  • Some people online complain about poor customer service

Vanguard Money Market Funds Interest Rates?

Each Vanguard money market fund has its own interest rate, and those rates vary each day depending on market conditions. At the time of this publication, the highest-yield Vanguard money market fund had an average 7-day SEC yield of 5.01%.

Vanguard Prime Money Market Fund?

In 2020, the Vanguard Prime Money Market Fund became the Vanguard Cash Reserves Federal Money Market Fund. It continues to exist under its new name, and it’s a solid low-risk investment option.