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It doesn’t matter if vanguard goes down. Your funds are segregated. A mmf like VUSXX is as safe as a HYSA. It only holds treasury bills and repos. Plenty safe for me. Some MMFs hold commercial paper which would add a little risk in my opinion. A HYSA that is FDIC insured is safe no matter how small the bank is
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I think back in 2008 there was a liquidity crunch and some went below the $1 value they were meant to stay at. Believe there is new regulation/standard now where there is less commercial paper, if at all. Treasuries and repos are fine and make up most of it.
I don't consider money market funds to be risky today, maybe 99.99% safe compared to 100% safe for funds under the FDIC/NCUA limit at an insured bank.
I actually think only one broke the buck in 2008 and there was one other that had previously to the GFC. I am not positive but think only Prime mmfs can hold commercial paper, so if you just avoid prime funds, they should be plenty safe. Prime funds probably pay a bit more but usually have higher minimums and as you mention have a bit more risk.
The government will not let the money market system fail. Brokerage accounts are also protected by SIPC insurance, up to $500k ($250k max can be cash). While SIPC doesn’t protect your invested assets from capital losses, that wouldn’t really matter in the case of a money market fund.