Liquidretro t1_jeg3110 wrote on March 31, 2023 at 7:25 PM

Yes you should be earning interest but it's one of the most conservative investment options available, so it's not a ton of interest. https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx

I don't understand your strategy of contributing to a traditional IRA and then rolling it to a Roth. Why don't you just contribute to a Roth initially? Your max contribution per year is between all IRA accounts, roth or traditional. Can you explain why you are trying to do it this way?

DMball OP t1_jeg4fs1 wrote on March 31, 2023 at 7:35 PM

Sorry, the term is "Backdoor" roth. Income limits are too high to contribute to a Roth initially.

Also the VMFXX says the SEC 7 day yield is 4.76%. I haven't seen a cent of interest. When does it get paid or where do I view it?

Liquidretro t1_jeg8a7x wrote on March 31, 2023 at 8:01 PM

In your OP you never mentioned you were doing a backdoor Roth IRA. You should edit your OP. Even then I don't understand why you are keeping it in essentially cash before doing the conversion. https://www.investopedia.com/terms/b/backdoor-roth-ira.asp

As mentioned above the interest goes to shares not dollars.

DMball OP t1_jeg8zqe wrote on March 31, 2023 at 8:05 PM

My apologies, although not sure why it matters.

I'd prefer to keep it in cash as I contribute and build up to the max and then rollover all at once. This prevents me from losing money in investments (and having to sell to rollover) if the market goes down. Essentially this is short term savings so ideally i'd love to reap the high yield of the money market fund before rollover and investing in ETFs for long term savings.