Yeah, the Vanguard money market funds rock, but they don’t have debit cards/account numbers AFAIK, so they can’t really be used like a normal bank account. Fidelity and Schwab both can, so they’re a better replacement for a traditional bank account.
And expense ratios don’t matter for money market funds, the important thing is net return, which is how they’re all advertised. SPAXX has ~5% returns, which is after taking fees into account, so it doesn’t really matter that it has 0.77% or whatever fees. That said, most of the difference in returns can be explained by fees, so it’s interesting if you’re wondering why two similar funds are different.
And the 0% funds are cool, but they really don’t matter much. The difference between 0% and 0.04% or whatever is smaller than the tracking error between funds. I do invest in FZILX in my HSA, but I don’t think it’ll perform much differently vs competitors like VXUS.
The upside to me is the awesome HSA, decent customer service, fantastic debit card, and auto roll feature for t-bills. Schwab is similar. If Vanguard offered those features, I’d probably use them instead (I have my IRA and taxable brokerage accounts there).
security concern
I don’t think that’s a thing.
If you use one account for everything, I think it will auto draft from money markets and mutual funds, but it won’t do any market trades like selling ETFs. I personally don’t use it that way and have three accounts (and an HSA): two Bloom accounts and a Cash Management Account. The two aren’t connected, so I can’t pull from the CMA using my Bloom debit and vice versa, nor would it pull from a different account automatically. If I had a brokerage account, it would be separate from the CMA and a Bloom accounts.
So what I do is leave my CMA empty and the debit card locked unless I need to use it, and then I transfer from Bloom to the CMA so there’s cash to withdraw, and then unlock the debit card. That’s probably way more paranoid than necessary, but I rarely use my debit card, so I’m okay with it.