How to correctly record Vanguard transfers when "cash" is held in Money Market?

sd_mark

Hi,

If this has been asked and answered, please let me know. I saw only partially relevant questions.

I'm on Quicken Classic Premier R60.20. I started from scratch this year. I've linked my Vanguard online account where I have one nonretirement brokerage account and four IRA brokerage accounts. Each account has multiple holdings (mostly ETFs), and each account has a Federal Money Market account that Vanguard treats as the "cash" fund for the account. There is never a cash balance in an account; it's always in the MM.

Unfortunately the downloaded transactions don't seem to reflect this correctly. I frequently see a cash balance. Sometimes it is immediately spent to buy shares, which I guess evens out. Once I saw a doubled transaction. Today I'm missing a transaction.

For example, yesterday I moved let's say $1000 from the nonretirement MM to the Roth IRA MM, then used that money in the Roth to buy 5 shares of a stock for $800.

Quicken shows the sale of $1000 in the nonretirement MM to cash, then cash out (to nowhere).

Then in the Roth, it shows a it shows cash deposit (from nowhere) of $1000, a purchase of MM for $1000, then a purchase of stock for $800, leaving a cash balance of -$800 (negative). Maybe tomorrow's transaction list will show the $800 moving from the MM to cash.

What I think it should show is a "stock" transfer from the nonretirement MM to the Roth MM, then a purchase of the 5 shares paid for from the MM, with no cash involved.

What is the right way to handle auto-download Vanguard accounts? Can I designate the MM as the "cash" account in each? Should I just let it pretend like there is a cash account? What about transfers—should I manually correct those so that I do a cash transfer in Quicken (XOut + ContribX) rather than the cash out/in from nowhere?

Thanks for your thoughts.

Jim_Harman

 So in my example, on Feb. 13, I used funds in the MM settlement fund to buy some stock in the same account. On Feb. 14, the stock purchase downloaded as a "Bought", leaving me with a negative -$800 Cash balance. Then on Feb. 15, the MM "Sold" transaction appeared as a "MONEY FUND REDEMPTION", zeroing out the Cash balance in Quicken.

@sd_mark That is exactly how Vanguard handles cash. The upside of this is that you get an extra day or 2 of interest on the MM fund while the security trade settles. If you want to go the the trouble of entering a Sell for your MM fund balance and then deleting all the downloaded Buys and Sells of the MM fund, the cash that is in the MM fund will remain in Quicken's Cash Bal column.

For transfers, as mentioned above if you enter the transactions before they download, the downloaded transactions will match the already-entered transactions.

Chris_QPW

You are never going to get a "transfer" as a downloaded transaction. Doesn't exist.

These are always records as a Withdraw and a Deposit.

There is the "attempt" of Quicken to do "Transfer matching", but I doubt that even works when an investment account is involved, and at best it is a guess based on the amount and approximate date.

So, the recommended method is to pre-enter the transfer and then match the downloaded transaction to that. In the case of investment transactions, you might have to actually just change the downloaded transaction(s).

On the subject of Vanguard. When I had accounts with them, I definitely found them to have "out of sync" information.

For instance, you buy some security. You get the download for that buy, but no money has moved from the MM to pay for it and maybe have a negative balance. Then a couple of days later when buy closes, the MM transaction shows up. Same with selling a security.

And if I remember correctly the Online Cash Balance was updated late in the night whereas the transactions would post after the close of the day.

sd_mark

Thanks @Chris_QPW. Do I have this right:

• Let Quicken use a fake cash balance in all Vanguard accounts. Keep an eye on the cash for a few days after any activity to make sure cash eventually zeroes out. Correct manually if necessary.
• For a transfer between Vanguard accounts, edit the downloaded transaction, say in the From account, to be a "Cash Transferred out of Account" with the appropriate Transfer account. That will create a cash deposit in the Transfer account, duplicating the downloaded cash deposit, so in the Transfer account, delete the downloaded cash deposit.

Jim_Harman

If the transfers are scheduled, there should be no need to edit or delete transactions. You can use Reminders to record them a few days before the transactions download, and when the download comes in Quicken will use the date, amount, and account to match the transaction that is already in your Transaction List. This will work for both sides of the transfer.

For one-off transfers, if you enter them manually in advance, the transfers will also match and there should be no need to edit them.

NotACPA

In my 5 accounts at Fidelity, the little amount of cash held is either in a "Linked Checking Account" (for the 2 taxable accounts) or just held as Cash …. without bothering that it's actually in a MMF.

Q doesn't care and it saves me the hassle of buying and selling MMF shares.

Chris_QPW

https://community.quicken.com/discussion/comment/20476440#Comment_20476440

I prefer financial institutions that just download these as if it is cash like Fidelity does, but when they don't like in the case of Vanguard it would be a pain to try to treat is as cash because they are going to download buy/sells of the MMF, and you would end up having to delete those constantly.

For some financial institutions Quicken allows you to treat one MMF as cash and it will then delete these for you leaving the cash as the cash balance.

Unfortunately, it doesn't do it for all financial institutions (I have no idea what is in the downloaded information from the financial institution allows this). And for financial institutions that might use multiple MMF like Chase, you are stuck with at the most only one of them being flagged as cash.

This is why I think this idea should be implemented:

https://community.quicken.com/discussion/7943516/let-users-choose-how-money-market-transactions-are-treated

Bob_L

IMO, Vanguard downloads accurately represent how their accounts are treated in the real world. That is they show as buys and sells from the Federal money market settlement account. It can sometimes be confusing, e.g. when you see a settlement transaction that seems to be an odd amount because it is actually the net of several transactions within the settlement account. However, trying to turn all of those transactions into cash would in my opinion complicate things even more than how things are now. With the federal money market as a security, I can also easily see how it is doing financially in portfolio view, reports, etc.

sd_mark

Okay I've upvoted @Geobrick's suggestion.

@Bob_L: "...trying to turn all of those transactions into cash would in my opinion complicate things even more than how things are now…."

Not sure I follow. My complaint is the the Vanguard downloads DO turn all those transactions into cash even though there is no actual cash account. So in my example, on Feb. 13, I used funds in the MM settlement fund to buy some stock in the same account. On Feb. 14, the stock purchase downloaded as a "Bought", leaving me with a negative -$800 Cash balance. Then on Feb. 15, the MM "Sold" transaction appeared as a "MONEY FUND REDEMPTION", zeroing out the Cash balance in Quicken.

It's slowly dawning on me that this may be the only way Quicken/Vanguard can represent transactions that execute one day but settle the next. The stock purchase shows a Feb. 13 date, which is the day the trade happened; the MM redemption occurred on the Feb. 14 settlement date.

I guess I can live with that. The transfer between accounts, where it shows the cash going nowhere and then materializing out of nowhere, is a bit more annoying, so I may update those infrequent transactions manually.

Bob_L

You have it now. There will be times when vanguard will show a negative balance due to the settlement delays as you mentioned. That is how it works in the real world, and you will get used to it.

Jim_Harman

 So in my example, on Feb. 13, I used funds in the MM settlement fund to buy some stock in the same account. On Feb. 14, the stock purchase downloaded as a "Bought", leaving me with a negative -$800 Cash balance. Then on Feb. 15, the MM "Sold" transaction appeared as a "MONEY FUND REDEMPTION", zeroing out the Cash balance in Quicken.

@sd_mark That is exactly how Vanguard handles cash. The upside of this is that you get an extra day or 2 of interest on the MM fund while the security trade settles. If you want to go the the trouble of entering a Sell for your MM fund balance and then deleting all the downloaded Buys and Sells of the MM fund, the cash that is in the MM fund will remain in Quicken's Cash Bal column.

For transfers, as mentioned above if you enter the transactions before they download, the downloaded transactions will match the already-entered transactions.

sd_mark

Thanks all for the illuminating discussion! I guess I can only mark one "answer" but it's more the accumulation that helps.

q_lurker

I believe you can mark multiple posts as answering your question. Mostly, that help later readers get to the better responses quicker.

Re: Transfers — you can certainly pre-enter the transaction and let Quicken match the two sides to the two downloaded transaction, as Jim suggests. I don’t have a problem with what you wrote earlier with the manual edits.

• For a transfer between Vanguard accounts, edit the downloaded transaction, say in the From account, to be a "Cash Transferred out of Account" with the appropriate Transfer account. That will create a cash deposit in the Transfer account, duplicating the downloaded cash deposit, so in the Transfer account, delete the downloaded cash deposit.

Your choice.

sd_mark

Well I tried pre-entering an IRA distribution at Vanguard from a traditional IRA to a nonretirement money market. It only half worked.

In the IRA, I entered "Cash Transferred out of Account" with the Transfer account as the nonretirement brokerage. This gave me a WithdrwX in the IRA and an Xln in the nonretirement. That covered the "cash" portion only; I expected to match those two transactions, then accept the downloaded sell IRA/buy MM transactions.

It worked on the nonretirement side: I had one transaction to match and the new purchase to accept.

In the IRA, I have two new transactions: the expected ETF "Sold" transaction and a "Withdraw" with the description "Auth db / Electronic Transaction". In other words, with WithdrawX that I entered manually was not matched to the Withdraw that Quicken downloaded from Vanguard.

If I try to "Manually match transaction", it says "There are no transactions to match".

So I guess I'm back to deleting the downloaded "Withdraw" and marking the "WithdrawX" that I entered as Cleared.

Bob_L

You should set up a reminder or manually enter the amount of the IRA withdrawal as a deposit in the non-IRA account with the source being a transfer from the IRA, in order to have the tax reports come out correctly. The download from the IRA should match that transfer, but if it doesn't then you are correct you should just delete it. Then the settlement sells and buys should follow, typically a day later bringing both cash balances to zero.