Best Money Market Funds for Cash Management To Buy Now

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Money market funds are designed for investors who want to preserve capital, maintain liquidity and earn interest that typically tracks short-term interest rates. They are often used as a place to hold emergency savings, investment cash awaiting deployment or short-term funds that should not be exposed to market volatility.

While money market funds are among the most conservative investment options available, not all funds are the same. Differences in underlying holdings, expenses and risk profile can affect yield and suitability.

At a Glance: Best Money Market Funds

Fund	Ticker	Fund Type	Risk Profile/Use Case	One-Line Reason It Stands Out
Vanguard Federal Money Market Fund	VMFXX	Government	Very low	Backed primarily by U.S. government securities
Fidelity Government Money Market Fund	SPAXX	Government	Very low	Widely used cash sweep option
Vanguard Prime Money Market Fund	VMMXX	Prime	Low	Higher yield with minimal added risk
Fidelity Prime Money Market Fund	FZDXX	Prime	Low	Actively managed institutional-grade fund
Schwab Government Money Fund	SNVXX	Government	Very low	Conservative option for cash management
Vanguard Treasury Money Market Fund	VUSXX	Treasury-only	Very low	Direct exposure to U.S. Treasury securities

Yields and fund structures are based on current fund sponsor disclosures.

Why Investors Use Money Market Funds

Money market funds aim to maintain a stable net asset value while paying income from short-term debt instruments. According to the Investment Company Institute, money market funds are commonly used for cash management because of their liquidity and relatively low risk.

In higher-rate environments, money market yields often rise quickly because holdings reset frequently.

What Is a Money Market Fund?

A money market fund is a mutual fund that invests in short-term, high-quality debt securities, such as Treasury bills, government agency securities and commercial paper. These funds are regulated under SEC Rule 2a-7, which limits maturity, credit risk and liquidity requirements.

Money market funds are not bank accounts and are not FDIC insured.

Best Money Market Funds To Watch

Vanguard Federal Money Market Fund (VMFXX)

VMFXX invests primarily in U.S. government securities and repurchase agreements. Vanguard disclosures emphasize capital preservation and liquidity. It is commonly used as a default settlement fund in Vanguard brokerage accounts.

Fidelity Government Money Market Fund (SPAXX)

SPAXX holds government securities and is often used as a cash sweep fund at Fidelity. According to Fidelity, the fund focuses on safety and daily liquidity. Yields generally track short-term interest rate movements closely.

Vanguard Prime Money Market Fund (VMMXX)

VMMXX is a prime money market fund that can invest in high-quality corporate commercial paper in addition to government securities. Vanguard notes that prime funds may offer slightly higher yields with modestly higher risk.

Fidelity Prime Money Market Fund (FZDXX)

FZDXX is an actively managed prime money market fund typically available to institutional or high-balance investors. Fidelity disclosures highlight strict credit quality standards. Minimum investment requirements may apply.

Schwab Government Money Fund (SNVXX)

SNVXX focuses on government-backed securities and repurchase agreements. Schwab positions the fund as a conservative cash management option. Expense ratios and minimums vary by share class.

Vanguard Treasury Money Market Fund (VUSXX)

VUSXX invests exclusively in U.S. Treasury securities. According to Vanguard, Treasury-only funds may appeal to investors seeking maximum credit quality. Yields can be slightly lower than prime funds.

Money Market Funds vs. Money Market Accounts

The Federal Reserve notes that money market fund yields closely follow changes in the federal funds rate, while bank deposit rates often lag.

Risks To Understand Before Investing

Although money market funds are low risk, they are not risk-free. The SEC cautions that while rare, money market funds can experience losses under extreme market stress.

Prime funds also carry minimal credit risk compared to government-only funds.

How Money Market Funds Fit Into a Portfolio

Money market funds are often used as a cash allocation, not a long-term growth investment. Vanguard research shows that holding cash equivalents can improve flexibility and reduce portfolio volatility during uncertain markets.

They are especially useful for emergency funds, short-term goals or investment dry powder.

Final Take to GO

Money market funds offer a practical way to earn interest on cash while maintaining liquidity and capital stability. Government and Treasury funds prioritize safety, while prime funds may offer slightly higher yields with modest additional risk.

For most investors, money market funds work best as a cash management tool, not a substitute for long-term investing.

Data was compiled on Jan. 29, 2026, and is subject to change.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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