When Does Swvxx Pay Interest?

Earning interest on your money market investments can be an important part of your overall investment strategy. If you hold shares in the Schwab Government Money Fund Investor Shares (SWVXX), you may be wondering when you actually receive interest payments on your investment.

If you’re short on time, here’s a quick answer to your question: SWVXX pays out interest on the last business day of each month.

In this comprehensive guide, we’ll take a close look at SWVXX payout details, including payment frequency, calculation methods, and how to maximize your interest earnings.

SWVXX Overview


SWVXX is a money market mutual fund offered by Charles Schwab. It invests in short-term debt securities like commercial paper, repurchase agreements, Treasury bills, and CDs. The fund’s objective is to provide investors with liquidity and as high a level of current income as possible.

Some key things to know about SWVXX:

  • It is an ultra-short term bond fund, so it invests in securities with very short maturities (less than 1 year).
  • The fund has very low risk, but also relatively low returns compared to bond funds with longer maturities.
  • SWVXX has an expense ratio of 0.35%, which is on the lower end for money market funds.
  • It offers daily liquidity – investors can move money in and out of the fund on any business day.

Investment Objective and Strategy

As a money market fund, SWVXX’s primary objective is to provide maximum current income consistent with liquidity and the preservation of capital. Here’s how it aims to accomplish this:

  • The fund invests in high-quality short-term debt instruments that mature in 397 days or less. This includes securities like commercial paper, certificates of deposit, Treasury bills, and repurchase agreements.
  • SWVXX maintains a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. This keeps the portfolio focused on ultra short-term securities to minimize risk.
  • The fund only purchases securities that are determined to present minimal credit risk. Schwab’s credit analysts conduct rigorous review of issuers.
  • SWVXX strives to offer a stable $1.00 net asset value (NAV), although this is not guaranteed.

By emphasizing ultra short-term, high-quality and liquid securities, SWVXX provides investors a means of keeping money accessible for near-term needs while trying to earn a modest yield in the process.

SWVXX Interest Payment Details

Payment Frequency

SWVXX pays interest on a monthly basis. The fund distributes net income to investors each month via direct deposits into linked bank accounts. This frequent interest payment schedule allows investors to compound returns more quickly than funds paying quarterly or annually.

Interest Calculation Method

SWVXX calculates interest using the average daily balance method. This means the fund tracks your account balance each day of the month and takes the average. The interest payment is based on the average daily balance multiplied by the current monthly yield.

Using the average daily balance method is advantageous for investors who add money frequently or have a fluctuating account balance. You earn interest on every dollar invested each day it remains in the fund.

Viewing Interest Earned

Schwab provides several ways to view the interest earned in SWVXX each month:

  • The amount will appear on your monthly account statement.
  • You can log in to your Schwab Alliance account online to see interest transactions.
  • Call 1-800-515-2157 to speak with a Schwab representative who can provide interest details.

The interest payments can also be used to estimate the fund’s current yield. Multiply a month’s interest by 12 to approximate the annual yield percentage.

With its high liquidity and monthly interest payments, SWVXX can be a smart place to park cash for short-term savings goals or as part of an investment portfolio allocation.

Maximizing SWVXX Interest Earnings

Contribute Frequently

One of the best ways to maximize interest earnings on your SWVXX account is to contribute frequently. Making regular contributions, such as monthly or even weekly, means more of your money will be earning that sweet SWVXX interest rate over time.

This compounding effect can really add up, especially the earlier you start contributing. Even small, consistent contributions can make a big difference long-term.

Consider Your Account Type

Be sure to open the right account type for your goals. For example, contributing to a Roth IRA instead of a taxable account means you won’t pay taxes on the interest earned. This lets you keep and reinvest more of your returns.

IRAs also allow higher annual contribution limits than regular taxable accounts. However, you need earned income and meet eligibility requirements to contribute to an IRA.

Compare Interest Rates

Keep an eye on SWVXX’s interest rate compared to other options. While SWVXX frequently offers very competitive, stable yields for a money market account, even slightly higher rates elsewhere could add up over time.

Consider laddering some funds into short-term CDs or high-yield savings accounts to maximize earnings. Just beware of tradeoffs like access and liquidity.

By frequently contributing, choosing the right account type, and shopping around for the best rates, you can optimize your earnings on the cash parked in your SWVXX account. A little effort goes a long way when compound interest is involved!

Other Money Market Funds

Fidelity Investments Money Market Fund

The Fidelity Investments Money Market Fund is another popular option for investors looking to park their cash. This fund offers very competitive rates while providing account holders with check writing privileges and ATM access.

According to Fidelity’s website, their retail money market fund currently yields 2.08%.

One of the main benefits of the Fidelity money market fund is its massive size – with over $350 billion in assets, it has the scale needed to offer higher returns. The fund invests in securities issued by entities like the U.S. Treasury and top global banks.

While not FDIC-insured, it strives to maintain a stable $1 NAV and historically has done so successfully.

The Fidelity Investments Money Market Fund allows a minimum investment of just $2,500 to get started. For those with significant cash holdings looking for a place to store short-term liquidity that offers competitive rates, this fund is a top choice to consider.

Vanguard Federal Money Market Fund

The Vanguard Federal Money Market Fund is a great option for risk-averse investors looking for safety and liquidity. This fund invests exclusively in short-term U.S. Treasury securities, making it one of the most conservative places to put cash.

While the Vanguard Federal Money Market Fund offers lower yields than funds that purchase corporate debt, its current 7-day SEC yield is a respectable 1.79%. The fund maintains an impressively stable $1 share price and has never had a losing year since its inception in 1975.

The Vanguard Federal Money Market Fund requires a minimum investment of $3,000. For those seeking principal preservation and daily liquidity backed by the full faith of the U.S. government, it remains an excellent choice in today’s rising rate environment.


Knowing the details around SWVXX interest payments can help you maximize earnings. By contributing regularly, holding funds in the right account type, and comparing rates, you may be able to grow your money market returns over time.

Understanding payment frequency, calculation methods, and how to view your accrued dividends allows you to accurately track the interest your SWVXX investment generates each month and quarter. Monitor your payments and look for opportunities to boost interest income from this conservative investment vehicle.

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