What Is the Seven-Day Yield?
The seven-day yield is a standard measure of the annualized yield for a money market mutual fund. It is usually calculated based on the fund’s average seven-day distribution, and allows for the direct comparison across many money market funds.
The seven-day yield may also be referred to as the seven-day annualized return.
Key Takeaways
- The seven-day yield is a method for estimating the annualized yield of a money market fund.
- It is calculated by taking the net difference of the price today and seven days ago and multiplying it by an annualization factor.
- Since money market funds tend to be very low risk, the higher the seven-day yield the better.
Understanding the Seven-Day Yield
The seven-day yield is most often calculated for money market funds. This yield includes distributions paid by the fund plus any appreciation over a seven-day period, minus averagefees incurred during seven days.
The seven-day yield helps investors compare across money market funds. The seven-day yield can help to provide an expectation for the future return on investment. Similar to forward yield, its calculation is a projection that typically includes the average distribution from the fund’s most recent payout.
Many investors may choose money market funds to hold excess cash in various types of accounts. Retirement accounts and brokerage accounts often allow for the election of a cash deposit sweep into money market funds. The seven-day yield is one of the most common metrics provided for money market fund comparisons by brokerage platforms.
The basic calculation is as follows:
((A-B-C)/B) x 365/7.
Where:
- A = The price at the end of a seven-day period plus average weekly distributions.
- B = The price at the beginning of a seven-day period.
- C = Average fees for the week.
- 365/7 = 52.14 which represents the number of weeks in a year.
The seven-day yield provides investors with an estimate of the yield they can expect over the next year, based on the average payouts of one week. The methodology for the seven-day yield can vary.
Seven-Day Yield Comparisons
Barron’s list of the industry’s best money market funds by seven-day yield are reported with and without compounding. The list shows the industry’s highest yielding money market funds by popular industry categories. Money market categories for investing can include government, prime and tax-free municipals. Tax-free municipals will be exempt from federal tax and also exempt from state tax if the investment corresponds with the investor’s state of residence.
Seven-Day Yield Example
Let's look at an actual example of the seven-day yield. The Vanguard Federal Money Market Fund (VMFXX) reports the top seven-day yield in the government category as of January 3, 2018. It has a simple seven-day yield of 1.22% and a compound seven-day yield of 1.23%. Its most recent distribution of $0.00097 was paid out on January 2, 2018, giving it an average seven-day distribution of $0.0002425.
The seven-day yield calculation is as follows:
($1+$0.0002425-1-Expenses)/$1 x 365/7 = 1.22%
Investors should be cautious of seven-day yield calculations since a fund’s seven-day yield can sometimes vary with distributions if an average is not used. The 30-day yield can also be good for comparison since its calculation is a hypothetical annualized return based on payouts from the past 30 days.
FAQs
The Standardized 7-Day Current Yield is the average income return over the previous seven days. It is the Fund's total income net of expenses, divided by the total number of outstanding shares.
What is the formula for calculating yield? ›
Determine the income generated from the investment. Divide the market value by the income. Multiply this amount by 100.
What is 7-day yield on Spaxx? ›
0.00 (0.00%) YTD Returns. +1.68% 7-Day Yield. AS OF 05/18/2023.
How is my daily yield calculated? ›
To calculate yield, a security's net realized return is divided by the principal amount.
What is 7-day yield reddit? ›
The 7-Day Yield is an annualized yield, not a return you should expect to receive every seven days. The yield is calculated by taking the average income return over the previous seven days and assuming the rate stays the same for one year.
How is 7 day yield calculated? ›
The 7-Day Yield is the average income return over the previous seven days, assuming the rate stays the same for one year. It is the Fund's total income net of expenses, divided by the total number of outstanding shares and includes any applicable waiver or reimbursem*nt.
What does 7 days APY stand for? ›
A seven day APY is exactly what it is say it is. It's the annual return on a crypto investment over a seven-day period, which takes into account the effect of compound interest. A seven day APY is a common metric to compare returns on short timeframe investments.
What is the 7 day yield for Swvxx? ›
Dividends are not guaranteed.
...
| Fund Name | Schwab Value Advantage Money Fund® - Investor Shares4 |
|---|
| Ticker | SWVXX |
|---|
| 7-day yield1 | 4.67% |
|---|
| Minimum Initial Investment | No minimum |
|---|
| Net Expense Ratio2 | 0.340% |
|---|
26 more columnsNEW: Experience our best charts yet.
To calculate the current yield of a bond in Microsoft Excel, enter the bond value, the coupon rate, and the bond price into adjacent cells (e.g., A1 through A3). In cell A4, enter the formula "= A1 * A2 / A3" to render the current yield of the bond.
Although a seven-day yield and an APY are totally different calculations, you can still compare the two (roughly) if, say, you're trying to choose between a money market account and a money fund.
How often does Spaxx pay out? ›
Customized to investor preferences for risk tolerance and income vs returns mix. Schedule monthly income from dividend stocks with a monthly payment frequency. Diversify across sectors or allocate more towards a bullish sector thesis.
How much interest does Spaxx pay? ›
Additional Information
| Return Type | 1 Yr | 3 Yrs |
|---|
| FUND Fidelity® Government Money Market Fund | 2.34% | 0.78% |
| PRIMARY BENCHMARK FTSE 3-Mo Treasury Bill Popover | 2.61% | 0.95% |
| MORNINGSTAR CATEGORY AVERAGE Money Market-Taxable Popover | 2.32% | 0.79% |
| AFTER TAXES ON DISTRIBUTIONS Popover | | |
4 more rowsAnswer and Explanation: The yield to maturity is 7.16%.
How much does Fidelity money market pay? ›
You can also hold these funds as short-term investments within a Fidelity Account4. These money market funds are eligible for SIPC protection rather than FDIC insurance coverage.
...
Interest Rates for the Fidelity® Cash Management Account.
| FDIC-Insured Deposit Sweep Balances2 | Interest Rate (as of 05/15/2023) | APY3 (as of 05/15/2023) |
|---|
| $100,000.00 - AND ABOVE | 2.57% | 2.60% |
1 more rowNEW: Experience our best charts yet.
Is APY monthly or yearly? APY is the percentage rate of return on your money over one year, and it includes compound interest. The interest may be compounded daily, monthly, or yearly, depending on the deposit account.
Is APY paid monthly or yearly? ›
APY includes compound interest. And interest can be compounded daily, monthly or annually, depending on the account.
What does APY mean and how is it calculated? ›
Annual Percentage Yield (APY) is the percentage reflecting the total amount of interest paid on an account based on the interest rate and frequency of compounding for a 365-day period. The APY formula is a valuable tool for helping to make financial projections, especially over longer time periods.
Is 7 a good dividend yield? ›
A good dividend yield varies depending on market conditions, but a yield between 2% and 6% is considered ideal.
It's relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement. In subsequent years, you adjust the dollar amount you withdraw to account for inflation.
What is rule of 72 yield? ›
The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself.
Where is the best place to park cash? ›
Best investments for short-term money
| When you need the money | Investment options | Potential interest rate |
|---|
| Two to three years | Treasurys and bond funds, CDs | 4.0+ percent |
| Three to five years (or more) | CDs, bonds and bond funds, and even stocks for longer periods | 4.5+ percent (or much more if you're investing in stocks) |
1 more rowMay 15, 2023
Whether you hold securities like stocks, bonds, mutual funds, exchange traded funds, or money market funds in a Schwab brokerage account, or cash deposits in a Schwab Bank account, we have your assets protected.
How safe is Fidelity Money Market Fund? ›
Stability & safety
While not insured by the FDIC, the funds are required by federal regulations to invest in short-maturity, low-risk investments, making them less prone to market fluctuations than many other types of investments.
How does 1% APY work? ›
APY standardizes the rate of return. It does this by stating the real percentage of growth that will be earned in compound interest assuming that the money is deposited for one year. The formula for calculating APY is: (1+r/n)n - 1, where r = period rate and n = number of compounding periods.
Are high yielding savings accounts worth it? ›
The Bottom Line
A high-yield savings account can be an ideal place to keep money you are not using in the short term but that you want fairly easy access to. It offers higher returns than a traditional savings account, and is low risk because your deposits are federally insured up to $250,000.
How often does a high-yield savings account pay out? ›
Most high-yield savings accounts have daily compounding. This means that every day, you're earning interest on your money, though most banks only deposit that interest into your account once a month.
Why does Fidelity say I have SPAXX? ›
Fidelity Government Money Market Fund (SPAXX), a taxable money market mutual fund investing in U.S. Government Agency and Treasury debt, and related repurchase agreements. Intended for investors seeking as high a level of current income as is consistent with the preservation of capital and liquidity.
How long does it take Fidelity to pay out pension? ›
Once Fidelity receives your paperwork and determines it is in good order, most transfers take 3 - 5 weeks to complete. If you transfer your assets in full, the transaction may be automated and the process may take less time to complete.
Withdrawals by check generally require 5 to 7 business days, Electronic Funds Transfer (EFT) or Fidelity Electronic Funds Transfer generally require 1 to 3 business days, and withdrawals that are directed to a Fidelity non-retirement account generally require 1 to 2 business days for processing.
Is Spaxx considered cash? ›
Fidelity Government Money Market Fund (SPAXX)
The fund is typically 99.5% or more invested in cash or cash equivalents in the form of short-term U.S. government securities or repurchase agreements that are fully collateralized by cash or such securities.
Does Fidelity Spaxx charge fees? ›
No Transaction Fee Fidelity funds are available without paying a trading fee to Fidelity or a sales load to the fund. However, the fund may charge a short-term trading or redemption fee to protect the interests of long-term shareholders of the fund.
What day does Spaxx pay? ›
Dividend Payout History
| Ex-Div Date | Pay Date |
|---|
| 2/28/2022 | 3/1/2022 |
| 1/31/2022 | 2/1/2022 |
| 12/31/2021 | 1/1/2022 |
| 11/30/2021 | 12/1/2021 |
82 more rowsAdditional Information
| Return Type | 1 Yr | 3 Yrs |
|---|
| FUND Fidelity® Government Money Market Fund | 2.34% | 0.78% |
| PRIMARY BENCHMARK FTSE 3-Mo Treasury Bill Popover | 2.61% | 0.95% |
| MORNINGSTAR CATEGORY AVERAGE Money Market-Taxable Popover | 2.32% | 0.79% |
| AFTER TAXES ON DISTRIBUTIONS Popover | | |
4 more rowsThe 7-day SEC Yield is a measure of performance in the interest rates of money market mutual funds offered by US mutual fund companies. It is also referred to as the 7-day Annualized Yield.
How does Fidelity Spaxx work? ›
Fidelity Government Money Market Fund (SPAXX)
The fund is typically 99.5% or more invested in cash or cash equivalents in the form of short-term U.S. government securities or repurchase agreements that are fully collateralized by cash or such securities.
Why does fidelity say I have spaxx? ›
Fidelity Government Money Market Fund (SPAXX), a taxable money market mutual fund investing in U.S. Government Agency and Treasury debt, and related repurchase agreements. Intended for investors seeking as high a level of current income as is consistent with the preservation of capital and liquidity.
What is the highest yielding interest rate? ›
7 best high-yield savings accounts
- UFB Premier Savings: 4.81% APY.
- CIT Bank Savings Connect: 4.60% APY.
- First Foundation Bank Online Savings Account: 4.50% APY.
- Bask Bank Interest Savings Account: 4.75% APY.
- Primis Savings Account: 4.77% APY.
- CIBC Agility Online Savings Account: 4.37% APY.
A good personal loan interest rate depends on your credit score: 740 and above: Below 8% (look for loans for excellent credit) 670 to 739: Around 14% (look for loans for good credit) 580 to 669: Around 18% (look for loans for fair credit)
Stability & safety
While not insured by the FDIC, the funds are required by federal regulations to invest in short-maturity, low-risk investments, making them less prone to market fluctuations than many other types of investments.
How does Fidelity make money with no commission? ›
Fidelity makes money from interest on cash held in custody for clients, stock loans to short-sellers, and portfolio margining.
How much does Fidelity take when you sell stock? ›
$0.00 commission applies to online U.S. equity trades, exchange-traded funds (ETFs), and options (+ $0.65 per contract fee) in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal).
Does Fidelity automatically invest my money? ›
An automatic investment plan in your investment account. At Fidelity, you can set up automatic investments into funds you already own in your brokerage, retirement, 529 savings, or other eligible retail Fidelity accounts. The investment can be made from the cash available in the account or by linking to a bank account.
