On March 19, the Federal Open Market Committee (FOMC) made one of its most closely watched decisions of the year — holding the federal funds rate steady at 4.25% to 4.5%.
This key short-term benchmark influences everything from savings account yields to borrowing costs, and the Fed cited continued economic uncertainty and inflationary risk — especially from the Trump administration’s new tariffs — as the reason for pausing further cuts.
[Sign up for stock news with our Invested newsletter.]
While this move stirred more volatility in the equity markets, it was welcome news for money market funds, which remain a low-risk haven for capital preservation.
With the Fed holding rates steady, these funds continue to offer yields above 4%, making them an attractive option for conservative investors.
“Money market funds invest in very liquid, short-term securities with the objective of preserving your capital, while also providing income at prevailing market rates,” says Nafis Smith, principal and head of taxable money markets at Vanguard.
Money market funds are designed to maintain a stable $1 net asset value (NAV) per share and pay monthly income. They accomplish this by investing in high-quality, highly liquid and ultra-short-term debt instruments.
Depending on the type of money market fund, this can include U.S. Treasury bills, repurchase agreements, commercial paper and certificates of deposit (CDs).
“The risk associated with money funds is very low, given that the SEC mandates that only securities with high credit quality and shorter maturities are eligible holdings,” Smith explains.
Here are seven of the best money market funds to buy for 2025:
| Money market fund | Expense ratio | 7-day SEC yield |
| North Capital Treasury Money Market Fund (ticker: NCGXX) | 0% | 4.3% |
| Vanguard Federal Money Market Fund (VMFXX) | 0.11% | 4.2% |
| Vanguard Treasury Money Market Fund (VUSXX) | 0.07% | 4.3% |
| Fidelity Money Market Fund (SPRXX) | 0.42% | 4.1% |
| Schwab Municipal Money Fund – Investor Shares (SWTXX) | 0.34% | 3.0% |
| Schwab New York Municipal Money Fund – Investor Shares (SWYXX) | 0.34% | 3.0% |
| BlackRock Wealth Liquid Environmentally Aware Fund (PINXX) | 0.55% | 4.0% |
North Capital Treasury Money Market Fund (NCGXX)
“Consumers are savvy — they will not settle for a 1% interest rate at their bank if they can easily invest in a money market fund and earn five times the return,” says James P. Dowd, CEO at North Capital. For example, investors who buy NCGXX can earn a competitive 4.3% seven-day SEC yield. Despite being an institutional share class fund, NCGXX is accessible, with no minimum investment requirements.
“By offering an institutional share class with same-day liquidity to institutions and individuals, we hope to encourage all types of investors to incorporate NCGXX into their liquidity management,” Dowd says. In addition, the fund is currently operating under a generous fee waiver, bringing its net expense ratio down to 0%. This feature makes NCGXX free to own for the time being.
Vanguard Federal Money Market Fund (VMFXX)
“Money market funds are highly correlated with short-term interest rates,” Smith says. “If you look backward at how much the federal funds target rate has changed over the past year, you’ll see that money market rates have moved in lockstep with them.” With the Federal Reserve now holding rates steady after a series of three consecutive cuts, the yields on money market funds have stabilized.
Vanguard’s flagship money market fund is VMFXX. This fund currently pays a 4.2% seven-day SEC yield and charges a relatively low 0.11% expense ratio. As a government money market fund, VMFXX is required to invest 99.5% of its assets in cash, U.S. government securities or repurchase agreements collateralized by U.S. government securities. However, there is a $3,000 minimum investment requirement to access this fund.
Vanguard Treasury Money Market Fund (VUSXX)
“Money market funds can be a great way to save for short-term goals like buying a car, a down payment or building your emergency savings,” says Sophoan Prak, a certified financial planner and financial advisor at Vanguard. “Generally, if you have a planned expense within one year, a money market fund can be a good investment option for it.” Vanguard also offers VUSXX as an alternative to VMFXX.
Like VMFXX, VUSXX is also classified as a government money market fund. However, the fund further limits its risk with a heavy allocation to U.S. Treasury bills, where it has 98% of its invested capital, making it a shade more conservative than VMFXX. It currently pays a 4.3% seven-day SEC yield and charges a lower 0.07% expense ratio but requires the usual $3,000 minimum investment.
[Read: 5 Best S&P 500 Index Funds to Buy Now]
Fidelity Money Market Fund (SPRXX)
“Prime money market funds invest in debt securities issued by corporations, government agencies and government-sponsored entities,” says Jeff Fisher, managing principal and head of investment strategy at Peapack-Gladstone Bank. These types of money market funds can offer higher yields compared to government money market funds, at the cost of slightly greater risk. A popular example is SPRXX.
In addition to Treasury bills and repurchase agreements, SPRXX also holds CDs, time deposits and commercial paper. Unlike the Vanguard money market funds, SPRXX also has no minimum required investment, making it more accessible. However, it does charge a higher 0.42% expense ratio. This eats into the fund’s income potential, reducing its seven-day SEC yield to 4.1%.
Schwab Municipal Money Fund – Investor Shares (SWTXX)
“Tax-exempt money market funds invest in debt securities issued by states, counties, school districts and other municipal borrowers,” Fisher says. “This income is exempt from U.S. income taxes and, in some instances, from state income taxes.” These funds are especially suitable for high-income-bracket investors who have maxed out tax-sheltered accounts, such as a Roth IRA or 401(k).
A great example is SWTXX, which currently pays a 3% seven-day SEC yield exempt from federal income taxes. While this may seem low compared to the previous options, it isn’t an apples-to-apples comparison. The true metric to understand is the “tax equivalent yield,” which adjusts for your tax bracket and shows the pre-tax rate a taxable fund would need in order to match SWTXX’s after-tax return.
Schwab New York Municipal Money Fund – Investor Shares (SWYXX)
New York ranks among the highest when it comes to income tax rates, but high-earning investors residing there can save with a state-specific municipal money market fund like SWYXX. The 3% seven-day SEC yield paid by this fund is exempt from both federal and state income taxes. At a 0.34% expense ratio, it is also fairly affordable, especially compared to actively managed municipal bond funds.
High-net-worth investors can save even more by opting for the Schwab New York Municipal Money Fund — Ultra Shares (SNYXX). This fund is the institutional version of SWYXX. It features a similar portfolio and strategy but pays a slightly higher 3.1% seven-day SEC yield thanks to a lower 0.19% expense ratio. However, it does require a hefty $1 million minimum investment requirement to access.
BlackRock Wealth Liquid Environmentally Aware Fund (PINXX)
Investors who prioritize environmental, social and governance (ESG) considerations may prefer a specialized money market fund like PINXX. This prime money market fund features the usual $1 fixed NAV but screens its portfolio to exclude issuers that fail to meet certain ESG criteria. This includes screening out industries like thermal coal, oil sands, tobacco and weapons.
PINXX is well capitalized, with around $4.9 billion in assets under management (AUM), and has a reasonable $1,000 minimum investment requirement. However, the fund does charge a much higher 0.55% expense ratio, which reduces its seven-day SEC yield down to just 4%. Still, investors may be willing to overlook this drawback given that PINXX is one of the few ESG money market funds available.
More from U.S. News
Will the Stock Market Crash in 2025?
9 Highest Dividend-Paying Stocks in the S&P 500
Recession 2025: What to Watch and How to Prepare
7 Best Money Market Funds to Buy for 2025 originally appeared on usnews.com
Update 03/24/25: This story was published at an earlier date and has been updated with new information.
