Money market funds occupy a unique place in the investment landscape. Unlike certificates of deposit or bank savings accounts, they are not insured by the Federal Deposit Insurance Corp.
Even so, they are widely regarded as among the safest mutual funds available because they are designed to maintain a stable $1 net asset value, or NAV, per share, a feature that distinguishes them from traditional bond or stock mutual funds.
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That stability has not always been guaranteed. During the height of the 2008 financial crisis, the Primary Reserve Fund “broke the buck” when its NAV fell below $1 after suffering losses on Lehman Brothers commercial paper following the investment bank’s collapse.
The event triggered widespread panic, with investors rapidly withdrawing money from other money market funds, even those that had little or no exposure to toxic Lehman securities.
In response, U.S. policymakers moved quickly to restore confidence. The Treasury Department introduced a temporary guarantee program for eligible money market funds, while regulators later implemented a series of structural reforms.
These included liquidity requirements, redemption liquidity fees and, in certain circumstances, redemption gates, all designed to discourage destabilizing investor runs and provide fund managers with additional flexibility during periods of market stress.
Those changes have made today’s money market fund industry substantially more resilient, although not without trade-offs. Some institutional borrowers have argued that the reforms have increased their funding costs, but they have also strengthened investor confidence in the asset class by reducing the likelihood of another systemic run.
Even with those safeguards, investors should not treat every money market fund as interchangeable. Government, prime and municipal money market funds each hold different types of short-term securities, leading to meaningful differences in yield, credit risk and tax treatment.
Investors should also compare expense ratios, remembering that the quoted seven-day SEC yield is reported after fees have already been deducted.
Here are seven of the best money market funds to buy in 2026:
| Fund | Expense Ratio | 7-day SEC Yield |
| North Capital Treasury Money Market Fund (ticker: NCGXX) | 0% | 3.7% |
| Vanguard Federal Money Market Fund (VMFXX) | 0.11% | 3.6% |
| Vanguard Treasury Money Market Fund (VUSXX) | 0.07% | 3.6% |
| Fidelity Money Market Fund (SPRXX) | 0.42% | 3.3% |
| Fidelity Tax-Exempt Money Market Fund (FMOXX) | 0.42% | 1.3% |
| iShares Prime Money Market ETF (PMMF) | 0.20% | 3.7% |
| JPMorgan 100% U.S. Treasury Securities Money Market ETF (JMMF) | 0.16% | 3.5% |
North Capital Treasury Money Market Fund (NCGXX)
NCGXX is one of the highest-paying money market funds currently available, with a 3.7% seven-day SEC yield, near the upper end of the Federal Reserve’s 3.5% to 3.75% target range. That is thanks to a fee waiver that reduces the fund’s expense ratio to 0%. Without the fee waiver, the unsubsidized seven-day SEC yield would be 3%. Investors can access NCGXX through U.S. Bank or directly through North Capital.
“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 three 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 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.”
Government money market funds like VMFXX are generally considered the safest category because regulations require at least 99.5% of their assets to be invested in cash, U.S. Treasury securities or other government-backed obligations, along with repurchase agreements collateralized by those securities. VMFXX currently charges a 0.11% expense ratio and pays a 3.6% seven-day SEC yield.
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.” With the fed funds target rate on hold again in the 3.5% to 3.75% range, money market investors have been able to earn elevated yields for longer.
Even within government money market funds, there are important differences in composition. For example, VUSXX limits its holdings to U.S. Treasurys and Treasury-backed repurchase agreements. Although that narrower mandate would typically reduce income versus VMFXX, its lower 0.07% expense ratio largely offsets the difference, resulting in the same 3.6% seven-day SEC yield.
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 Private Bank. Depending on the fund, this can include commercial paper, certificates of deposit and bank obligations. While still high quality, they are less creditworthy compared to Treasurys.
However, that additional credit risk does not always translate into higher net yields. For example, SPRXX currently pays a 3.3% seven-day SEC yield despite taking on more risk than government funds such as VMFXX, largely because of its higher 0.42% expense ratio. The advantage is accessibility, as SPRXX does not require a $3,000 minimum initial investment like most of Vanguard’s money market funds.
Fidelity Tax-Exempt Money Market Fund (FMOXX)
Most money market fund distributions are fully taxable at the federal level, although Treasury-only funds are generally exempt from state and local income taxes. “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.”
FMOXX is one such option. Although its 1.3% seven-day SEC yield appears low and it carries the same 0.42% net expense ratio as SPRXX, the more meaningful measure for many investors is its tax-equivalent yield. This calculates what an ordinary money market fund would need to pay in order to match FMOXX’s federal tax-exempt yield. Fidelity currently estimates a tax-equivalent yield of 2.3% for FMOXX.
iShares Prime Money Market ETF (PMMF)
Traditional money market mutual funds are bought and sold once per day at a stable $1 per-share NAV. However, newer money market exchange-traded funds, or ETFs, unlock intraday trading on an exchange, although they no longer maintain a fixed $1 NAV. Even so, they remain subject to similar investment restrictions and rank among the most conservative ETFs available.
PMMF is one example. After a 0.2% expense ratio, the fund currently pays a 3.7% seven-day SEC yield. Its NAV per share typically hovers around $100, gradually rising as interest accrues before dropping by approximately the distribution amount on the ex-dividend date, after which the cycle repeats. BlackRock also offers a more conservative version, the iShares Government Money Market ETF (GMMF).
JPMorgan 100% U.S. Treasury Securities Money Market ETF (JMMF)
JMMF is among the most conservative money market ETFs because it invests exclusively in U.S. Treasury securities, avoiding repurchase agreements and other government-backed obligations. That pure Treasury mandate also makes JMMF’s income exempt from state and local taxation. The fund currently pays a 3.5% seven-day SEC yield after deducting a 0.16% expense ratio.
One feature that sets JMMF apart from most money market funds is its weekly distribution schedule. Most weekly income ETFs tend to use derivatives, but JMMF does not. As with PMMF, its share price typically hovers around $100, gradually increasing as interest accrues before dropping by approximately the payout amount on the weekly ex-dividend date, after which the process begins again.
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7 Best Money Market Funds to Buy for 2026 originally appeared on usnews.com
Update 07/09/26: This story was previously published at an earlier date and has been updated with new information.
