The Best Money Market Funds to Buy
The best money market funds keep your cash safe and earn interest for your portfolio at the same time. That's one constant in an ever-evolving fund industry.
One of the more anticipated developments in 2026 was the debut of ETF share classes for mutual funds. For more than 20 years, this structure was effectively exclusive to Vanguard due to a patent.
It allowed the firm to pair mutual funds with share classes of ETFs, using the ETF's in-kind creation and redemption process to help reduce taxable capital gains distributions across the entire fund structure.
That tax efficiency, combined with scale, contributed to Vanguard's cost advantage.
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That changed in early 2026. In February, F/m Investments added a mutual fund share class to an existing Treasury bill ETF. In March, Dimensional Fund Advisors followed by launching an ETF share class of an actively managed micro-cap mutual fund.
These moves signaled that the structure is beginning to open up more broadly across the industry.
Even before ETF share classes were formally expanded, many fund providers had already been replicating mutual fund strategies inside ETF wrappers. The appeal was clear. ETFs offer intraday liquidity, and they tend to generate fewer capital gains distributions.
This has been especially common among active managers. Fidelity, for example, launched ETF versions of both its Blue Chip Growth and Magellan mutual funds.
One category where the ETF format hasn't taken off in the same way is money market funds. While money market ETFs have been introduced as a way to deliver cash-like stability with ETF liquidity, they've attracted only modest inflows.
That stands in stark contrast to traditional money market mutual funds, which still hold trillions of dollars in assets.
Here's why money market funds continue to dominate cash management, along with a look at some specific options for your consideration.
Why money market funds are different
Most mutual funds experience some level of volatility. Even though their net asset value (NAV) is only priced once per day at market close, that value can still fluctuate depending on how the underlying securities perform.
Money market funds operate differently. They're designed to maintain a fixed $1 per share NAV. That means, under normal conditions, the price you buy and sell at remains constant regardless of day-to-day market movements. The return instead comes from the income the fund generates.
This stability is not absolute. During periods of extreme market stress, such as the 2008 financial crisis, a small number of money market funds "broke the buck," meaning their NAV fell below $1.
That undermined confidence in the product and triggered significant reforms. In response, the Securities and Exchange Commission (SEC) implemented stricter regulations to improve safety and liquidity.
These include requirements for higher credit quality holdings, minimum daily and weekly liquidity thresholds, limits on maturity and duration and, for certain fund types, the ability to impose liquidity fees or redemption gates during periods of stress.
Today, investors can choose from three broad categories of money market funds:
- Government money market funds must invest at least 99.5% of their assets in cash, U.S. Treasury securities, repurchase agreements collateralized by Treasuries and obligations issued or guaranteed by U.S. government agencies. This makes them the most conservative option in the category.
- Prime money market funds have a broader investment mandate and can hold instruments such as certificates of deposit, commercial paper and short-term corporate debt. They typically offer slightly higher yields than government funds but come with marginally higher credit risk.
- Tax-exempt money market funds invest primarily in short-term municipal securities issued by states, local governments and related agencies. Most of the income generated is exempt from federal income tax. Depending on the fund, it may also be exempt from the alternative minimum tax (AMT) or state taxes for residents in certain jurisdictions.
Regardless of the type, most money market funds distribute income on a monthly basis. On an annualized basis, yields tend to move in line with prevailing short-term interest rates.
Currently, that places most money market fund yields in the range of the federal funds rate, around 3.50% to 3.75%.
How we picked the best money market funds
Our primary consideration was fees. Money market funds are not designed to significantly outperform prevailing short-term interest rates. Their returns tend to track the fed funds rate.
Because these funds take on minimal credit and interest rate risk, there's little room to generate excess return. That makes fees one of the biggest determinants of investor outcomes.
The key metric to focus on is the seven-day SEC yield, which is quoted after expenses. In practice, the higher the expense ratio, the lower the yield a fund can deliver.
This can lead to situations where a prime money market fund, despite taking on slightly more credit risk, ends up yielding less than a government money market fund simply because its fees are higher. For this reason, we capped expense ratios at 0.20% per year.
We also considered accessibility. As mutual funds, some money market funds still impose minimum investment requirements. While these have become less common, certain large providers continue to require substantial initial investments.
That can be a barrier for investors just starting out. To address this, we limited our selection to funds with minimum investments of $5,000 or less, or those structured as ETFs where the minimum investment is one share (or less with fractional trading).
In addition, we focused on retail-accessible share classes for those structured as mutual funds. Many money market funds offer institutional share classes with lower fees, but these often require minimum investments in the millions of dollars and are geared toward entities such as pension funds, endowments or family offices.
Finally, we applied a basic scale filter. Given the large number of funds in this space, we restricted eligibility to those with at least $50 million in assets under management. This helps avoid the risk of fund closure due to insufficient interest.
North Capital Treasury Money Market Fund
- Assets under management: $64.4 million
- Expense ratio: 0.00%
- Minimum investment: N/A
- 7-day SEC yield: 3.70%
The North Capital Treasury Money Market Fund (NCGXX) is a bit of an under-the-radar option. While much smaller than offerings from large providers like Vanguard, Fidelity or Schwab, it stands out on a few key metrics.
The most notable advantage is cost. North Capital currently waives the fund's expense ratio down to zero. Since the seven-day SEC yield is quoted after fees, this directly boosts investor income, placing NCGXX's yield among the higher end of the money market category.
Accessibility is another differentiator. Despite being structured as an institutional share class, the fund doesn't require a minimum investment. That makes it viable even for investors starting with smaller amounts of capital.
For those willing to look beyond the largest fund families, NCGXX offers a simple, low-cost way to park cash while earning competitive yields.
Learn more about NCGXX at the North Capital provider site.
Vanguard Federal Money Market Fund
- Assets under management: $374.2 billion
- Expense ratio: 0.11%
- Minimum investment: $3,000
- 7-day SEC yield: 3.58%
If your preference is to stick with a large, established provider, Vanguard is hard to beat. The firm's cooperative ownership structure has historically led to consistent fee reductions, which directly benefit investors through higher net yields.
In that respect, the Vanguard Federal Money Market Fund (VMFXX) stands out as a core option.
While it does come with a $3,000 minimum investment, its expense ratio remains low relative to comparable funds from Fidelity and Schwab, supporting a competitive 3.58% seven-day SEC yield.
VMFXX is a government money market fund. That means at least 99.5% of its assets are invested in cash, U.S. government securities or repurchase agreements fully backed by government securities or cash.
This structure keeps credit risk minimal while maintaining a stable $1 net asset value.
Learn more about VMFXX at the Vanguard provider site.
Vanguard Treasury Money Market Fund
- Assets under management: $105.6 billion
- Expense ratio: 0.07%
- Minimum investment: $3,000
- 7-day SEC yield: 3.63%
Government money market funds can come in different forms. The most conservative tend to focus exclusively on U.S. Treasuries, and that's the case with the Vanguard Treasury Money Market Fund (VUSXX).
VUSXX invests at least 80% of its assets in Treasury bills or repurchase agreements backed by Treasuries. Vanguard itself classifies this as one of its lowest-risk offerings.
Despite being more conservative than VMFXX, it actually offers a higher 3.63% seven-day SEC yield. That comes down to cost. With a lower 0.07% expense ratio, more of the underlying yield is passed through to investors.
Learn more about VUSXX at the Vanguard provider site.
iShares Prime Money Market ETF
- Assets under management: $484.1 million
- Expense ratio: 0.20%
- Minimum investment: None
- 7-day SEC yield: 3.63%
Money market funds have now arrived in ETF form. Unlike traditional mutual fund versions, their net asset value is not fixed at $1. In practice, though, it remains very stable.
For example, the iShares Prime Money Market ETF (PMMF) trades within a narrow range around $100 per share. Over the course of the month, the NAV gradually increases as interest accrues, then resets lower on the ex-distribution date.
PMMF is structured as a prime money market fund. That allows it to invest beyond government securities into instruments such as certificates of deposit, commercial paper issued by financial institutions and corporations, as well as asset-backed securities.
Despite its higher 0.20% expense ratio, PMMF delivers a 3.63% seven-day SEC yield, comparable to more conservative Treasury-focused funds.
It also removes the barrier of minimum investments, with investors able to buy in at roughly $100, or the price of a single share.
Learn more about PMMF at the iShares provider site.
iShares Government Money Market ETF
- Assets under management: $104.4 million
- Expense ratio: 0.20%
- Minimum investment: None
- 7-day SEC yield: 3.48%
Prime money market funds like PMMF introduce some degree of credit risk. While still low due to the short duration and generally high quality of holdings, it isn't negligible. During the 2008 financial crisis, it was primarily prime money market funds that "broke the buck."
Investors looking to minimize that risk while staying within an ETF structure may prefer the iShares Government Money Market ETF (GMMF). Unlike PMMF, this fund is required to invest at least 99.5% of its assets in cash, U.S. government securities or repurchase agreements backed by those securities.
In practice, the portfolio is primarily composed of U.S. Treasuries, with smaller allocations to agency debt and government-backed repurchase agreements. This keeps credit risk extremely low and aligns GMMF more closely with traditional government money market funds.
The tradeoff is income. At a 3.48% seven-day SEC yield, GMMF pays slightly less than PMMF, reflecting its more conservative positioning, net of higher fees vs VMFXX or VUSXX.
Learn more about GMMF at the iShares provider site.
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