Is It Prime Time for Money Market Funds?

With the Federal Reserve raising interest rates again, where is the best place to store your money?

A woman looks at her spending habits on a computer with a pen and paper.
(Image credit: Getty Images)

The Federal Reserve raised interest rates by a quarter-percentage point at its meeting earlier this week, lifting the fed funds rate, a key bank lending rate, to a target range of 5.25% to 5.50%. Avid savers jumped at the opportunity for greater returns as high-yield savings accounts crept closer to five percent.

It was the 11th interest rate hike since March 2022, bringing the benchmark borrowing rate to its highest level since 2001. As the market responds to the new rate increase, money market funds could begin offering comparable rates to those of high-yield savings accounts (HYSA). Should rate watchers keep their money where it is or move on to potentially higher yields? 

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Seychelle Thomas
Contributing Writer

Seychelle is a seasoned financial professional turned personal finance writer. She’s passionate about empowering people to make smart financial decisions by combining 10 years of finance industry experience with solid research and a wealth of knowledge. Seychelle is also a Nav-certified credit and lending expert who has explored money topics such as debt consolidation, budgeting, credit, and lending in her work for publications including GOBankingRates, LendEDU, and Credible.