Macroeconomic cycles are often defined by the environments in which certain assets tend to perform best. For example, real assets such as commodities and natural resource stocks have historically held up better during inflationary periods.
Since September 2024, however, U.S. markets have been operating in a different regime: an interest rate-cutting cycle. Ahead of the Sept. 18, 2024, meeting of the Federal Reserve, the high end of the policy rate sat at 5.5%. A series of rate cuts since then has brought it down to 3.75%.
Under the leadership of Chair Jerome Powell, the central bank has taken the view that post-pandemic inflation moderated enough to justify easing after an extended period of restrictive policy.
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That shift created both winners and losers. Investors exposed to bond funds faced pressure earlier in the cycle. When rates rise, newly issued bonds come with higher coupons, forcing the prices of existing bonds to fall so their yields remain competitive.
Money market fund investors experienced the opposite. Yields of 5% or more were available with relatively low risk, driven by exposure to ultra-short-term, high-quality instruments such as Treasury bills, repurchase agreements, certificates of deposit and commercial paper.
These funds are structured to maintain a stable $1 per share net asset value (NAV), a feature that has largely held outside periods of extreme market stress. But as rates moved lower, those elevated yields faded. Money market returns have slipped below 4% in line with prevailing short-term interest rates.
Still, recent data showed a lower-than-expected unemployment rate, raising the possibility that the Fed may see less need to continue easing. Since rate cuts are often used to counter labor-market weakness, a steadier jobs backdrop could support a temporary hold. For money market funds, a pause would mean income levels staying higher for longer, even if only modestly and temporarily.
Here are seven of the best money market funds to buy today:
| Fund | Expense ratio | 7-day SEC yield |
| North Capital Treasury Money Market Fund (ticker: NCGXX) | 0.00% | 3.8% |
| Vanguard Federal Money Market Fund (VMFXX) | 0.11% | 3.6% |
| Vanguard Treasury Money Market Fund (VUSXX) | 0.07% | 3.7% |
| Schwab Prime Advantage Money Fund (SWVXX) | 0.34% | 3.5% |
| Schwab Municipal Money Fund — Investor Shares (SWTXX) | 0.34% | 1.5% |
| iShares Prime Money Market ETF (PMMF) | 0.20% | 3.7% |
| Texas Capital Government Money Market ETF (MMKT) | 0.20% | 3.7% |
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. “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.”
This money market fund currently delivers a 3.8% seven-day SEC yield, higher than peers. This is made possible by a fee waiver that makes the fund free to invest in for the time being. Before the fee waiver, the fund’s unsubsidized seven-day SEC yield would be around 3.1%. NCGXX is also highly accessible to beginner retail investors because it has no minimum required investment.
Vanguard Federal Money Market Fund (VMFXX)
“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.”
VMFXX is a government money market fund. Accordingly, 99.5% of this fund’s assets must be invested in cash, U.S. government securities, or repurchase agreements collateralized by U.S. government securities or cash. After subtracting a 0.11% expense ratio, investors currently earn a 3.6% seven-day SEC yield. However, accessing VMFXX requires a $3,000 initial investment at a minimum.
Vanguard Treasury Money Market Fund (VUSXX)
“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.” That relationship creates a cycle where money market funds tend to see outflows when rates fall, due to the yield on risk assets like dividend stocks becoming more attractive.
Still, investors prioritizing capital preservation with the potential for moderate income might consider a government money market fund like VUSXX. Unlike VMFXX, this fund invests exclusively in U.S. Treasury bills and repurchase agreements backed by Treasurys, which makes it marginally safer. VUSXX pays a 3.7% seven-day SEC yield after deducting a 0.07% expense ratio, with a $3,000 minimum investment required.
Schwab Prime Advantage Money Fund (SWVXX)
“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. Prime funds are designed to offer slightly higher yields in exchange for increased credit risk, though that trade-off does not always materialize once fees are considered.
SWVXX illustrates this dynamic. As a prime money market fund, it has a broader mandate than VMFXX, with the ability to hold short-term corporate debt. Even so, its 3.5% seven-day SEC yield trails some government funds due to a higher 0.34% expense ratio. The fund may still appeal to investors already using Schwab’s brokerage platform, particularly because it has no minimum investment requirement.
[READ: 7 of the Best High-Yield Bond Funds to Buy Now]
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 federal income taxes and, in some instances, from state income taxes.” Such funds may be useful for investors in higher income brackets who have already maximized tax-advantaged accounts. For this role, consider SWTXX.
SWTXX currently pays a 1.5% seven-day SEC yield after accounting for its 0.34% expense ratio. While that yield may appear low at first glance, it does not tell the full story. Investors should calculate the fund’s tax-equivalent yield, which estimates what a taxable money market fund would need to earn, given an investor’s marginal tax rate, to match the federal tax-free income paid by SWTXX.
iShares Prime Money Market ETF (PMMF)
Most money market funds are structured as mutual funds, meaning purchases and redemptions are processed once per day at the fund’s closing NAV. Exchange-traded funds (ETFs) offer a different structure. When a money market strategy is wrapped in an ETF, investors can buy and sell shares throughout the trading day at market prices, with bid and ask spreads similar to stocks.
PMMF launched in February 2025 and has grown to about $434 million in assets under management. It currently pays a 3.7% seven-day SEC yield after a 0.2% expense ratio. One distinction investors should be aware of is that PMMF’s NAV is not fixed. Instead, it follows a sawtooth pattern, gradually rising as interest accrues and then dropping on the monthly ex-dividend date by the amount of the distribution.
Texas Capital Government Money Market ETF (MMKT)
PMMF is not the only money market ETF available. Investors can also buy MMKT, which invests exclusively in U.S. government securities. The fund currently offers a 3.7% seven-day SEC yield after deducting a 0.2% expense ratio, the same as PMMF. Liquidity for MMKT is excellent, with Texas Capital disclosing a 30-day median bid-ask spread of just one basis point, or 0.01%.
Like other money market ETFs, MMKT does not maintain a fixed $1 NAV per share. Instead, its NAV typically hovers around $100, with interest accruing gradually in small increments on a daily basis. On the ex-dividend date, the NAV drops by the amount of the distribution, which is paid out later. Uniquely, MMKT follows a weekly distribution schedule as opposed to the more typical monthly payouts.
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7 Best Money Market Funds to Buy for 2026 originally appeared on usnews.com
Update 01/12/26: This story was previously published at an earlier date and has been updated with new information.
