The Federal Open Market Committee (FOMC) held interest rates steady at 4.25% to 4.5% in its March 19 decision — resisting political pressure from President Donald Trump, who had been calling for cuts.
But the Fed doesn’t take orders from the White House. Instead, it follows a dual mandate: promote maximum employment and keep inflation at a tolerable level; the central bank’s current inflation target is 2%.
In holding firm, the Fed signaled caution. Despite calls for easing, it’s watching closely as a still-tight labor market and the potential inflationary impact of tariffs add uncertainty to the outlook.
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For now, that means borrowing costs will stay elevated — and so will yields on short-term fixed-income securities, particularly those held by money market funds.
Money market funds invest in highly liquid, high-quality instruments with short maturities — typically just a few months. These often include U.S. Treasurys, repurchase agreements, certificates of deposit, promissory notes and more.
Unlike traditional mutual funds, they’re designed to maintain a stable $1 per share net asset value (NAV), making them a popular tool for capital preservation.
“If you have cash that you may need to access soon, a high-yielding money market fund is a good place to park it safely,” says Jim Penna, senior manager of retirement services at VectorVest.
Many asset managers offer these funds, and Charles Schwab is no exception. Its money market lineup includes eight fund pairs — 16 options in total — spanning different strategies and tax treatments.
Half are designated as “ultra shares,” which are institutional-grade versions with lower fees — typically a 0.19% expense ratio — but a steep $1 million minimum investment requirement. The other half are retail-accessible “investor shares” with no minimum investment, though all of them charge a slightly higher 0.34% expense ratio.
Here are five of the best Charles Schwab money market funds to buy, all of which fall into the retail investor-friendly “investor shares” category:
| Fund | 7-day yield* |
| Schwab Value Advantage Money Fund (ticker: SWVXX) | 4.2% |
| Schwab Government Money Fund (SNVXX) | 4.1% |
| Schwab U.S. Treasury Money Fund (SNSXX) | 4.0% |
| Schwab Municipal Money Fund (SWTXX) | 2.8% |
| Schwab New York Municipal Money Fund (SWYXX) | 2.8% |
*All yields as of March 31, 2025.
Schwab Value Advantage Money Fund (SWVXX)
“One of the Schwab money market funds I like is SWVXX,” Penna says. “It invests in short-term securities issued by the U.S. government, corporations and financial institutions.” The broad mandate of SWVXX is made possible due to its classification as a “prime” money market fund. These types of money market funds are not limited to only government-issued securities. Thus, they can earn higher yields.
Right now, SWVXX is paying a 4.2% seven-day SEC yield. This metric is calculated net of its 0.34% expense ratio that all investor shares carry. This is why Schwab Value Advantage Money Fund – Ultra Shares (SNAXX), which charges a lower 0.19% expense ratio, pays a slightly higher 4.3% seven-day SEC yield. When you’re shopping around for money market funds, pay attention to fees as those decrease the expected yield.
Schwab Government Money Fund (SNVXX)
“While all money market funds are generally considered low-risk, government money market funds are viewed as the most conservative option,” says Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors. “These funds must keep at least 99.5% of their assets in government securities or related repurchase agreements.” The trade-off for this safety is generally a lower yield.
This dynamic can be seen with SNVXX, which has a higher credit quality than SWVXX, but pays a marginally lower 4.1% seven-day SEC yield. However, this trade-off may be acceptable to risk-conscious investors looking to eliminate credit risk as much as possible. Should a 2008-style recession occur, government money market funds are at a lower risk of seeing their NAV fall below $1 versus prime money market funds.
[Read: How to Earn $1,000 Per Month From Dividend Stocks]
Schwab U.S. Treasury Money Fund (SNSXX)
“For our multifamily office clients, we want a money market fund that is as safe as possible from disruption from pandemics, wars, strikes and other global macro events,” Schulman says. “In these cases, we often look to Treasury money market funds, which are considered flight-to-safety instruments and don’t have the spread-widening risk of corporate or foreign instruments.”
Schwab’s safest money market fund from a credit risk perspective is SNSXX. Unlike SNVXX, this fund does not own any repurchase agreements. Instead, it is backed by Treasury bills, which are highly liquid and backed by the U.S. government. This fund can be a more accessible and simpler alternative to rolling individual Treasury bills on your own. SNSXX currently pays a 4% seven-day SEC yield.
Schwab Municipal Money Fund (SWTXX)
“If tax efficiency is your primary focus, consider investing in a municipal money market fund, where most earnings are typically free from federal taxes,” Schulman says. “These funds generally invest in debt securities from local and state entities, like city hospitals, state colleges, power companies and transit systems, so in addition to receiving tax-advantaged income, you will be doing a social good.”
SWTXX is Schwab’s main municipal money market fund. The 2.8% seven-day SEC yield may seem modest, but because it’s largely exempt from federal taxes, the tax-equivalent yield is likely much higher — especially for those in higher income brackets. The tax-equivalent yield allows you to compare tax-free and taxable yields on an apples-to-apples basis, and you can easily estimate it using various online calculators; what your own tax-equivalent yield is for this fund will depend on your tax bracket.
Schwab New York Municipal Money Fund (SWYXX)
Some municipal bond funds are exempt from both federal and state taxes if you live in the same state where the securities are issued. For example, New York residents can avoid both with SWYXX, which is especially helpful given the state’s high personal income tax rates. This fund owns municipal securities issued by the state of New York and various municipal agencies in the region.
SWYXX currently pays a 2.8% seven-day SEC yield, which may appear low at first glance, but when adjusted for its double tax exemption, it can be particularly attractive for high-income New Yorkers. High-net-worth investors with $1 million to invest can save more with the Schwab New York Municipal Money Fund — Ultra Shares (SNYXX), which pays a slightly higher 2.9% seven-day SEC yield due to a slightly less onerous expense ratio of 0.19%.
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5 Best Schwab Money Market Funds originally appeared on usnews.com
Update 04/01/25: This story was published at an earlier date and has been updated with new information.
