Money Market Funds
Money market funds are low-risk funds that provide higher returns than traditional savings accounts while maintaining easy access to our cash.
The primary goal of money market funds is to preserve your cash while generating income, which is ideal for many busy professionals or those who’d like to generate consistent and stable income in volatile times.
There are three major types of money market funds:
- Government or Treasury money market funds (majority of assets held in short-term Treasury bills)
- Prime money market funds (still primarily invested in short-term Treasury bills but may include some short-term corporate debt)
- Municipal money market funds (invests in national or local municipal bonds)
The safest type of money market fund is the Treasury money market fund, which exclusively holds short-term Treasury bills. This is followed by government money market funds, which hold other government debt in addition to primarily Treasury bills.
To start, we suggest:
- Reading our detailed Introduction to Money Market Funds.
- The best money market funds for each brokerage, including Vanguard, Fidelity, Merrill Edge and Merrill Lynch, Charles Schwab, and E*TRADE.
- Which government money market funds to buy on Charles Schwab and Fidelity.
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