Post #215 by rnam on the Index Investing board

Investment Strategies / Index Investing ❤

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Expense ratio is 7 bp for VBIL and 42 bp for SPAXX. That there pretty much accounts for the difference. Why would you pay Fidelty such a high expense ratio to invest in T Bills which you can buy for free or pay a very small fee for the convenience and granularity of VBIL?

Also SPAXX holds securities and repos of government agencies which are not guaranteed by US Treasury, unlike VBIL which only holds bills guaranteed by US Treasury.

If Fidelity allows maybe you can use SPAXX as a sweep account and then invest any excess in VBIL.

Schwab too has terrible sweep accounts on which they earn huge margins. I am forced to use SWVXX and do many trades to earn a market yield on cash.

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