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VCITX or VCADX for emergency fund

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  • VCITX or VCADX for emergency fund

    I decided to re-allocate some of my emergency fund cash into a tax-exempt bond fund. I am in CA, highest income tax bracket. Would you recommend VCITX or VCADX? TIA!

  • #2
    If this is truly an emergency fund, asset safety and liquidity would be primary considerations.  I would stay at the shorter end of yield curve (VCADX) to dampen the potential asset volatility between the two choices.  I don't know if the option is available, but VCTXX is a CA specific municipal money market fund that fits into the asset safety theme and is tax-exempt to CA residences.  The fund does not appear to have admiral equivalent though.


    • #3
      Thank you so much for your advice. I looked at VCTXX, it pays less than 1% I believe. The other two I mentioned pay ~4% tax free. This is not my total EF, just part of it. I will look into sinking it into VCDAX per your advice.