Gone are the days when investors could throw a dart at a list of money market funds and reliably earn a 5% low-risk yield. In September, the Federal Reserve made yet another 25-basis-point, or 0.25-percentage-point, cut to its policy interest rate, and it’s expected to do so again at its October meeting. The current range, as of Oct. 28, is 4% to 4.25%. That range is likely to be 3.75% to 4% at the conclusion of the Fed’s Oct. 29 meeting.
Because money market funds invest in short-term fixed income securities such as Treasury bills, repurchase agreements and commercial paper, their yields move in lockstep with short-term interest rates, while their net asset value per share remains fixed at $1.
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With yields now lower, squeezing out maximum income from money market funds requires more due diligence. Investors need to shop around and compare funds carefully based on both their type and fees.
On the fund type side, prime money market funds can hold a broader range of assets, including commercial paper and certificates of deposit issued by corporations. This flexibility usually results in a small yield pickup compared to government-only money market funds, though it comes with slightly higher credit and liquidity risk.
More importantly, investors need to pay attention to expense ratios. The seven-day SEC yield listed for a money market fund already factors in the average fees charged by the fund manager. All else being equal, higher expenses mean a lower yield that investors actually receive.
Finally, taxes also remain an important consideration. Even as nominal yields decline, the after-tax income investors take home can shrink further depending on their tax bracket.
For high-earning investors, municipal money market funds may be worth considering. These funds typically pay income that is exempt from federal taxes and, in some cases, from state and local taxes, helping preserve more of the yield earned.
Here are seven of the best money market funds to buy for 2025:
| Fund | Expense ratio | 7-day SEC yield |
| North Capital Treasury Money Market Fund (ticker: NCGXX) | 0% | 4.1% |
| Vanguard Treasury Money Market Fund (VUSXX) | 0.07% | 4.0% |
| Vanguard Federal Money Market Fund (VMFXX) | 0.11% | 4.0% |
| Fidelity Money Market Fund (SPRXX) | 0.42% | 3.9% |
| Schwab Prime Advantage Money Fund (SWVXX) | 0.34% | 4.0% |
| Schwab Municipal Money Fund (SWTXX) | 0.34% | 2.4% |
| Schwab AMT Tax-Free Money Fund (SWWXX) | 0.34% | 2.4% |
North Capital Treasury Money Market Fund (NCGXX)
NCGXX is among the highest-paying money market funds, with a 4.1% seven-day SEC yield. This is made possible thanks to a waiver that brings the fund’s expense ratio to 0%. Without this subsidy, NCGXX would only pay a 3.1% seven-day SEC yield. This money market fund can be accessed by retail investors through U.S. Bank or directly through North Capital. It currently has $41 million in assets.
“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. “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.”
Vanguard Treasury Money Market Fund (VUSXX)
“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. “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.”
The highest-quality securities can be found within government money market funds like VUSXX. This fund takes it a step further by focusing exclusively on Treasury bills without the usual repurchase agreements. After accounting for a 0.07% expense ratio, investors can earn a 4% seven-day SEC yield before taxes. However, VUSXX does require a $3,000 minimum initial investment.
Vanguard Federal Money Market Fund (VMFXX)
“Money market funds are correlated with short-term interest rates,” Smith says. “If you look backward at how much the federal funds target rate has changed historically, you’ll see that money market rates have moved in lockstep with them.” During the rising interest rate environment of 2022, money market funds like VMFXX were paying yields of around 5% with very low risk, making them attractive safe havens.
However, given the ongoing interest rate cuts, VMFXX now only pays a 4% seven-day SEC yield. This fund is also a government money market fund, but unlike VUSXX it also holds repurchase agreements. Normally this would result in a yield boost, but VMFXX’s higher 0.11% expense ratio cuts into that. The fund also requires a $3,000 minimum investment, like most Vanguard mutual funds.
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. All else being equal, the higher credit risk incurred by prime money market funds should result in a yield slightly higher than that of government money market funds.
However, this can often be negated in practice if fund fees are high. For example, Fidelity’s prime money market fund, SPRXX, only pays a 3.9% seven-day SEC yield, which is lower than government money funds like VMFXX. This is due to SPRXX’s significantly higher 0.42% expense ratio. However, SPRXX may still be attractive to new investors due to its lack of a minimum required investment.
[READ: 7 Best Treasury ETFs to Buy Now]
Schwab Prime Advantage Money Fund (SWVXX)
Each of the large asset managers will usually offer their own lineup of money market funds. For example, investors on Charles Schwab’s brokerage platform can use SWVXX. This prime money market fund currently pays a more competitive 4% seven-day SEC yield. This is higher than what SPRXX pays because SWVXX charges a lower 0.34% expense ratio. The fund also has no minimum required investment.
Schwab’s money market fund lineup is split into retail and institutional share classes. The latter have markedly lower expense ratios and thus higher yields, but also required high minimum investments. For example, investors with at least $1 million in capital can access the Schwab Prime Advantage Money Fund — Ultra Shares (SNAXX), which pays a higher 4.2% seven-day SEC yield with a lower 0.19% expense ratio.
Schwab Municipal Money Fund (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 federal income taxes and, in some instances, from state income taxes.” State income tax exemption is only achievable if the money market fund is a state-specific variant, and the investor resides in the same state.
Schwab has ample options for either situation. The broadly diversified, federal-income-tax-exempt one is SWTXX, which is currently paying a 2.4% seven-day SEC yield. Depending on your income tax bracket, the tax-equivalent yield for SWTXX could be significantly higher. The fund charges a Schwab-standard 0.34% expense ratio and has no minimum initial required investment.
Schwab AMT Tax-Free Money Fund (SWWXX)
Municipal money market funds can help investors avoid federal income tax, while state-specific ones may also avoid state taxes if the investor resides in that state. However, high-net-worth investors may face another layer of taxation called the alternative minimum tax (AMT). This parallel tax system limits deductions and ensures individuals above certain income thresholds pay a minimum amount in taxes.
To help mitigate this, investors can turn to AMT-specific municipal money market funds like SWWXX. The fund’s monthly distribution is exempt from both federal income tax and the AMT, making it particularly appealing for investors in higher tax brackets. It currently pays a 2.4% seven-day SEC yield, with a standard 0.34% expense ratio, and requires no minimum investment.
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7 Best Money Market Funds to Buy for 2025 originally appeared on usnews.com
Update 10/28/25: This story was published at an earlier date and has been updated with new information.
