No, VUSXX is the correct fund. It is 100% fed govt obligations, so it is federally taxable but fully CA state tax exempt. It has a .07% expense ratio (which is about as low as you’ll find on any fund…$17.50 on $25000). I prefer it over bank funds, because almost nothing is more secure and liquid than a short term treasury, and short term treasuries are insulated from radical market shifts in a financial crisis. I save hundreds in CA taxes by holding them instead of receiving bank interest.
So, in your case, depending on your tax bracket, with bank interest you could earn an extra $25 ( .1% extra interest rate) plus $17.50 (expense ratio fee), but pay an extra $75 in CA state income taxes.