Best money market funds in February 2026
A money market fund is a type of mutual fund that invests in highly liquid, short-term debt securities, such as U.S. government securities, and/or repurchase agreements that are collateralized solely by U.S. government securities or cash (collectively, government securities).
What is a Money Market Fund?
Think of a Money Market Fund (MMF) as a “super-savings account” that lives inside your brokerage account.
Unlike a regular savings account at a bank, which lends your money out to homebuyers and businesses, a Money Market Fund takes your cash and lends it to the safest borrower in the world: The U.S. Government.
Technically, it is a mutual fund, but it trades at a stable price of $1.00 per share. If you put in $1,000, you have 1,000 shares. You earn interest (dividends) on that money every single month.
Why use them? (The T-Bill ETF alternative)
You might be wondering, “Why not just use a High-Yield Savings Account?” or “How is this different from the T-Bill ETFs (like SGOV) you mentioned?”
- Higher Yields than Banks: Banks take a cut of the profit. MMFs pass almost all the interest from government debt directly to you.
- Convenience (The “Sweep”): This is the #1 reason to use them. Many brokerages (like Fidelity and Vanguard) use MMFs as your “default” cash holding. When you sell a stock, your cash instantly goes into the MMF and starts earning ~3.5%+. You don’t have to “buy” it manually like a T-Bill ETF.
- Safety: Funds like VMFXX and SPAXX hold mostly U.S. government debt. While they aren’t FDIC insured, they are considered virtually risk-free.
When should you use a Money Market Fund?
- Your “Dry Powder”: Money you are waiting to invest in the stock market.
- Short-Term Savings: Down payment for a house, wedding fund, or tax bill money.
- The “Lazy” Option: If you don’t want to log in and trade T-Bill ETFs (like SGOV) every month, an MMF is 99% as good with 0% of the effort.
How to understand the table below
- 7-Day Yield: This is the annualized interest rate the fund paid over the last week. Think of it like an APY.
- Expense Ratio: The fee the fund manager charges. Note: The yields shown are AFTER these fees are deducted.
- Portfolio Net Assets: How massive the fund is. Bigger is generally safer and more liquid.
- Redemption Gate / Liquidity Fee: “No” is good. It means the fund won’t lock your money up during a crisis.
Top Money Market Funds (February 2026)
Based on 7-Day SEC Yield:
| 7-Day Yield | Ticker | Fund Name | Portfolio Net Assets ($B) | Average Maturity | Minimum Investment | Net Expense Ratio | Redemption Gate | Liquidity Fee |
|---|---|---|---|---|---|---|---|---|
| 3.64% | VUSXX | Vanguard Treasury Money Market Fund → | 103.8 | 45 Days | 3000 | 0.09% | No | None |
| 3.62% | VMRXX | Vanguard Cash Reserves Federal Money Market Fund → | 121.4 | 43 Days | 3000 | 0.10% | No | None |
| 3.61% | FRGXX | Fidelity Government Portfolio → | 261.5 | 35 Days | 10M (Inst) | 0.14% | No | None |
| 3.60% | VMFXX | Vanguard Federal Money Market Fund → | 376.2 | 43 Days | 3000 | 0.11% | No | None |
| 3.51% | SWVXX | Schwab Value Advantage Money Fund → | 248.9 | 29 Days | 0 | 0.34% | No | None |
| 3.40% | FDRXX | Fidelity Government Cash Reserves → | 237.2 | 41 Days | 0 | 0.27% | No | None |
| 3.34% | DGQXX | Dreyfus Government Cash Management → | 169.1 | 48 Days | 2500 | 0.44% | No | None |
| 3.33% | SPAXX | Fidelity Government Money Market Fund → | 437.4 | 45 Days | 0 | 0.42% | No | None |
| 3.19% | MJGXX | JPMorgan U.S. Government Money Market Fund → | 348.3 | 39 Days | 1000 | 0.59% | No | None |
How to Invest
The beauty of Money Market Funds is their simplicity.
- Open a Brokerage Account: If you have an account with Vanguard, Fidelity, or Schwab, you likely already have access.
- Check your “Core Position”: At Fidelity, for example, your uninvested cash sits in SPAXX automatically. You don’t even have to place a trade.
- Buy Manually: If you want a higher yield fund (like buying VUSXX inside a Vanguard account), you “buy” it just like a stock. Enter the ticker symbol, enter the dollar amount, and hit submit.
Banks vs. Money Market Funds vs. T-Bill ETFs
| Feature | Savings Account | Money Market Fund (e.g. VMFXX) | T-Bill ETF (e.g. SGOV) |
|---|---|---|---|
| Yield | Lower (~0.5% - 4.5%) | High (~3.6%+) | Highest (~3.6% - 3.7%) |
| Insurance | FDIC Insured | SIPC Protected (Not FDIC) | SIPC Protected (Not FDIC) |
| Ease | Easiest | Automatic / Easy | Requires Trading |
| Taxes | Fully Taxable | Fully Taxable* | State Tax Exempt |
*Some specific MMFs (like VUSXX) can be state tax-exempt, but most (like SPAXX) are not.
Conclusion
If you have cash sitting in a big bank checking account earning 0.01%, you are losing money to inflation every day. Moving that cash to a Money Market Fund is the easiest “free lunch” in investing. It takes minutes to set up, and you instantly start earning 300x more interest.
Disclaimer: This guide is for informational purposes only. Investment products are not FDIC insured, are not bank guaranteed, and may lose value.