10 Best Money Market Mutual Funds Of January 2024 (2024)

The 10 Best Money Market Funds of January 2024

Fidelity Money Market Fund (SPRXX)

10 Best Money Market Mutual Funds Of January 2024 (1)

Minimum Investment

$1

Expense Ratio

0.42%

7-Day Yield

5.10%

10 Best Money Market Mutual Funds Of January 2024 (2)

$1

0.42%

5.10%

Why We Picked It

The Fidelity Money Market Fund is one of three funds on our list that require a minimum initial investment of only one dollar. Still, it is not the cheapest option—six of the other funds herein levy even lower expense ratios.

The bulk of SPRXX’s holdings are various forms of repurchase agreements. Repos, as they’re also known, are overnight loans to the Federal Reserve, backed by U.S. Treasurys. The Fed buys them back the next day at a slightly higher price. That price premium is their implicit interest rate.

“These are the safest things in the world,” Crane Data President and Publisher Peter Crane told Forbes Advisor.

In addition, SPRXX’s holdings include other types of repos, commercial debt and certificates of deposit

Schwab Value Advantage Money Fund Investor (SWVXX)

10 Best Money Market Mutual Funds Of January 2024 (3)

Minimum Investment

$1

Expense Ratio

0.34%

7-Day Yield

5.27%

10 Best Money Market Mutual Funds Of January 2024 (4)

$1

0.34%

5.27%

Why We Picked It

The Schwab Value Advantage Money Fund was the world’s fastest growing money market fund in 2022 and among the fastest growing in 2023, thanks to Schwab and other brokerages shifting their so-called sweep money out of low-yield bank deposits, into higher-yield money funds, Crane says.

SWVXX now holds more than $160 billion of shareholders’ assets. Treasury and other government agency repurchase agreements are SWVXX’s largest single type of holding. CDs and commercial paper are its second and third largest types of holdings.

T. Rowe Price U.S. Treasury Money Fund Z (PRTXX)

10 Best Money Market Mutual Funds Of January 2024 (5)

Minimum Investment

$2,500

Expense Ratio

0.30%

7-Day Yield

5.13%

10 Best Money Market Mutual Funds Of January 2024 (6)

Why We Picked It

T. Rowe Price U.S. Treasury Money Fund is yet another money market fund on our list in which U.S. Treasury repurchase agreements account for the vast majority of fund holdings. U.S. Treasury bills are the fund’s second biggest category of holdings.

Currently, all securities held by the fund will mature in 397 days or less, and PRTXX’s weighted average maturity of holdings will not exceed 120 days.

Invesco Premier Portfolio Institutional (IPPXX)

10 Best Money Market Mutual Funds Of January 2024 (7)

Minimum Investment

$1,000

Expense Ratio

0.18%

7-Day Yield

5.45%

10 Best Money Market Mutual Funds Of January 2024 (8)

$1,000

0.18%

5.45%

Why We Picked It

Invesco Premier Institutional has the highest yield of all funds on our list. That’s due to a portfolio that consists mainly of short-term, high-credit-quality money market instruments. The securities are U.S.-dollar-denominated obligations, and they include primarily commercial paper, certificates of deposits, master and promissory notes, municipal securities and repurchase agreements.

JPMorgan Liquid Assets Money Market Fund (MJLXX)

10 Best Money Market Mutual Funds Of January 2024 (9)

Minimum Investment

$1,000

Expense Ratio

0.59%

7-Day Yield

5.02%

10 Best Money Market Mutual Funds Of January 2024 (10)

$1,000

0.59%

5.02%

Why We Picked It

One distinctive feature of JPMorgan Liquid Assets Money Market Fund is that it considers financially material environmental, social and governance (ESG) factors in investment decisions. MJLXX managers consider those factors with the goal of enhancing long-term, risk-adjusted financial returns.

But fund literature makes clear that MJLXX’s consideration of ESG factors does not alter the fund’s strategic goal, which is to invest in high-quality, short-term money market instruments. These include corporate notes, commercial paper, funding agreements, repurchase agreements, CDs and bank obligations.

Vanguard Federal Money Market Fund (VMFXX)

10 Best Money Market Mutual Funds Of January 2024 (11)

Minimum Investment

$3,000

Expense Ratio

0.11%

7-Day Yield

5.32%

10 Best Money Market Mutual Funds Of January 2024 (12)

Why We Picked It

With more than $280 billion of assets, Vanguard Federal Money Market Fund is the second largest portfolio on our list of the best money market funds of 2023. In fact, VMFXX is the second largest such fund industrywide. The larger fund is Fidelity Government Money Market (SPAXX), the next fund on our list.

VMFXX invests largely in securities issued by the U.S. government or its agencies. It also invests in repurchase agreements with collateral backing of U.S. Treasuries or to a lesser extent mortgage-backed securities. VMFXX maintains an average maturity of 60 days or less.

Fidelity Government Money Market Fund (SPAXX)

10 Best Money Market Mutual Funds Of January 2024 (13)

Minimum Investment

$1

Expense Ratio

0.42%

7-Day Yield

5.01%

10 Best Money Market Mutual Funds Of January 2024 (14)

$1

0.42%

5.01%

Why We Picked It

True to its name, the Fidelity Government Money Market Fund normally has nearly all of its shareholders’ money at work in cash, U.S. government securities and/or repurchase agreements that are collateralized by cash or government securities.

Hypersafe as SPAXX holdings are, they are not entirely risk free. SPAXX literature points out that certain issuers of U.S. Government securities are sponsored or chartered by Congress but their securities are neither issued nor guaranteed by the U.S. Treasury. Offsetting that negligible chink in SPAXX’s armor is its massive size, now exceeding $310 billion.

Vanguard Treasury Money Market Fund (VUSXX)

10 Best Money Market Mutual Funds Of January 2024 (15)

Minimum Investment

$3,000

Expense Ratio

0.09%

7-Day Yield

5.32%

10 Best Money Market Mutual Funds Of January 2024 (16)

$3,000

0.09%

5.32%

Why We Picked It

The Vanguard Treasury Money Market Fund is a stablemate of VFMXX. VUSXX follows a slightly different strategy in constructing its portfolio. VUSXX cautiously invests solely in U.S. Treasury obligations and repurchase agreements fully collateralized by U.S. Treasury securities.

Like its larger sister fund, VUSXX maintains a dollar-weighted average maturity of 60 days or less. Its expense ratio is the lowest on our list.

T. Rowe Price Government Money Fund (PRRXX)

10 Best Money Market Mutual Funds Of January 2024 (17)

Minimum Investment

$2,500

Expense Ratio

0.31%

7-Day Yield

5.11%

10 Best Money Market Mutual Funds Of January 2024 (18)

$2,500

0.31%

5.11%

Why We Picked It

T. Rowe Price Government Money Fund invests only in U.S. dollar-denominated money market securities. All of PRRXX’s securities mature in 397 days or less. The fund’s weighted average maturity will not exceed 60 days.

Roughly three-quarters of fund holdings consist of repurchase agreements. PRRXX’s second largest category of holdings is made up of debt issued by the U.S. government and its agencies.

BlackRock Wealth Liquid Environmentally Aware Fund Investor (PINXX)

10 Best Money Market Mutual Funds Of January 2024 (19)

Minimum Investment

$1,000

Expense Ratio

0.49%

7-Day Yield

5.09%

10 Best Money Market Mutual Funds Of January 2024 (20)

$1,000

0.49%

5.09%

Why We Picked It

BlackRock Wealth Liquid Environmentally Aware Fund, also known as BlackRock Wealth LEAF, is another socially conscious fund in our list of the best money market funds for 2023. PINXX considers environmental, social and governance (ESG) factors in its investment decisions, but is not ruled by such factors, according to fund literature. The fund invests in a broad array of securities. Roughly 40% of its holdings are U.S. government agency repurchase agreements. About another 20% are CDs. More than 10& are commercial paper–that is, short-term unsecured promissory notes issued by companies. Nearly an equal amount are asset-backed commercial paper. The rest is a mix of fixed income securities.

*Asset weights are sourced from fund filings, all other data are sourced from Crane Data, current as of January 2, 2024, unless noted otherwise.

Methodology

To compile our list of the best money market mutual funds, we searched for funds with a winning combinations of some key traits:

  • Wide availability. Many funds offer high yields and charge investors low fees, but the funds are available only through certain brokerages, advisors or workplace retirement plans. Instead, we generally only let funds through our screening process if Crane Data classifies them as retail funds. Likewise, we tried to steer clear of funds that charge liquidity fees or impose limits on redemptions.
  • Low minimums and fees. We screened out all funds that demand initial investments of more than $3,000. And we screened for funds with the lowest expense ratios—all of our picks levy expense ratios of 0.57% or less.
  • Highest possible yields. We screened out funds with 7-day yields of less than 4.47%. Seven-day yield is the industry standard for making comparisons among funds. It considers fund distributions plus appreciation, minus average fees over seven days—and then projects this average forward over the next 12 months.
  • Large portfolios. We screened out funds with low asset levels. Only one has as little as just over $1 billion in assets. Six have roughly $3 billion to $50 billion in assets. Three have roughly $130 billion to more than $270 billion.

Finding funds with all of those attributes is a balancing act. A fund may excel in one or two or even three categories, but it may be a laggard in others or even be an outright failure in some categories.

Why does asset level matter? Because money market funds are not bank deposits. They are not insured by the Federal Deposit Insurance Corporation (FDIC). If a financial crisis arises, the funds that stand the best chance of preserving your principal are the biggest funds.

First, they have the deepest pockets. “It takes ample resources to withstand tough times,” Crane said. Second, more assets means more shareholders. And in a financial emergency, you’ll want as many allies as possible to sway regulators and politicians trying to decide which funds and fund complexes to help. “Having 10-to-50 million shareholders on your side doesn’t hurt if you’ve got to call on Washington for emergency support,” Crane said.

Size also matters during ordinary times as well. “The bigger the fund, generally the better its service,” Crane said. “In general, I don’t like funds at small financial firms. And I don’t want to think about limitations on access and extra fees charged by funds with weird share class letters at the end of the alphabet.”

To learn more about our rating and review methodology and editorial process, check out our guide on how Forbes Advisor rates investing products.

The author owned shares of the Fidelity Money Market Fund when this article was published. He held no positions in the other securities discussed in the post at the original time of publication.

What is a Money Market Mutual Fund?

Money market funds are fixed income mutual funds that invest in debt securities with short maturities and very low credit risk. They offer ultra-low volatility and extremely good liquidity and may invest in taxable or tax-exempt government securities.

Money market funds are open-ended funds, meaning they may sell unlimited shares to customers. The fund sells and redeems the shares at a price equivalent to the net asset value (NAV), which is calculated daily.

The managers of money market funds always aim to keep their NAV fixed at $1 per share using special pricing and valuation conventions. Some allow their NAV to float based on the current market value of the securities in their portfolios.

There are plenty of reasons investors are yanking their cash out of bank deposits. First of all, they’re spooked by the collapse of Silicon Valley Bank. Second, for many people money market funds look like a safer bet than the stock market, which is a witches’ brew of woes: cryptocurrency crack-ups, rising interest rates, sticky inflation and the specter of recession.

Types of Money Market Funds

Money market mutual funds are defined by their type of investments, typically labeled as government, prime or municipal funds.

Prime and municipal funds are further classified as retail or institutional, depending upon the type of investors in the fund. Government funds must invest 95.5% of their assets in government-issued securities and consequently are extremely safe.

Municipal money market funds invest in municipal bonds issued by municipalities and municipal agencies, which pay interest exempt from federal income tax.

Prime money market funds invest in corporate commercial paper, repurchase agreements, certificates of deposit, and other bank debt securities.

Which Is Better: Money Market Fund or Savings Account?

A savings account with a financial institution is the safest, most liquid option for holding cash. That’s because the FDIC insures savings account deposits for up to $250,000, and funds are instantly available at the ATM or counter.

That same insurance coverage applies to money market accounts (MMAs), which are available at banks and credit unions, but are not the same thing as similarly named money market mutual funds. Money market mutual funds, often referred to simply as money market funds, are investment securities, not bank accounts. As such, they have no FDIC insurance.

Still, money market funds are also very low risk given that they invest in cash and securities guaranteed by the US government, such as Treasury bills, Treasury notes and repurchase agreements based on government-backed obligations.

Both accounts are extremely liquid, although some funds impose liquidity fees on redemption and certain limitations on redemption periods.

Money Market Funds in the Current Environment

Money market funds offered negligible yields in the low-rate environment that persisted over the past several years. Now that interest rates are rising, seven-day yields have climbed.

Still, inflation remains high. Rising interest rates are enabling savers to trim the gap between the value of their savings in money market funds and the pace at which inflation is eroding that money’s purchasing power.

Investors are responding, big time. Assets in money market funds have hit all-time record levels four weeks in a row, according to cranedata.com. Investors poured a net $152.7 billion into money market funds in May.

That put money market fund assets at $5.8 trillion. That’s a leap of 17.8% over the past 52 weeks. It’s a 13.1% surge this year alone.

Keeping up with inflation and out-earning savings and checking accounts are not the only catalysts for inflows.

“The failure of Silicon Valley Bank and the cryptocurrency collapse have spooked investors, who are leery about leaving money in bank deposit accounts in excess of the FDIC-insured amount of $250,000–and even amounts smaller than that,” Crane said.

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As a seasoned financial expert with a deep understanding of money market funds, I'll provide a comprehensive breakdown of the concepts and information covered in the article titled "The 10 Best Money Market Funds of January 2024."

  1. Fidelity Money Market Fund (SPRXX):

    • Minimum Investment: $1
    • Expense Ratio: 0.42%
    • 7-Day Yield: 5.10%
    • Investment Strategy: Primarily holds repurchase agreements (repos), which are overnight loans to the Federal Reserve backed by U.S. Treasurys. Also includes other types of repos, commercial debt, and certificates of deposit.
  2. Schwab Value Advantage Money Fund Investor (SWVXX):

    • Minimum Investment: $1
    • Expense Ratio: 0.34%
    • 7-Day Yield: 5.27%
    • Investment Strategy: Invests in Treasury and other government agency repurchase agreements, CDs, and commercial paper.
  3. T. Rowe Price U.S. Treasury Money Fund Z (PRTXX):

    • Minimum Investment: $2,500
    • Expense Ratio: 0.30%
    • 7-Day Yield: 5.13%
    • Investment Strategy: U.S. Treasury repurchase agreements dominate the fund's holdings, with U.S. Treasury bills as the second-largest category.
  4. Invesco Premier Portfolio Institutional (IPPXX):

    • Minimum Investment: $1,000
    • Expense Ratio: 0.18%
    • 7-Day Yield: 5.45%
    • Investment Strategy: Focuses on short-term, high-credit-quality money market instruments, including commercial paper, certificates of deposits, and repurchase agreements.
  5. JPMorgan Liquid Assets Money Market Fund (MJLXX):

    • Minimum Investment: $1,000
    • Expense Ratio: 0.59%
    • 7-Day Yield: 5.02%
    • Investment Strategy: Considers ESG factors in investment decisions, primarily investing in high-quality, short-term money market instruments like corporate notes, commercial paper, and repurchase agreements.
  6. Vanguard Federal Money Market Fund (VMFXX):

    • Minimum Investment: $3,000
    • Expense Ratio: 0.11%
    • 7-Day Yield: 5.32%
    • Investment Strategy: Invests largely in securities issued by the U.S. government or its agencies, including repurchase agreements with collateral backing.
  7. Fidelity Government Money Market Fund (SPAXX):

    • Minimum Investment: $1
    • Expense Ratio: 0.42%
    • 7-Day Yield: 5.01%
    • Investment Strategy: Focuses on cash, U.S. government securities, and collateralized repurchase agreements. Acknowledges some risk in certain issuers of U.S. Government securities.
  8. Vanguard Treasury Money Market Fund (VUSXX):

    • Minimum Investment: $3,000
    • Expense Ratio: 0.09%
    • 7-Day Yield: 5.32%
    • Investment Strategy: Invests solely in U.S. Treasury obligations and fully collateralized repurchase agreements, maintaining a low expense ratio.
  9. T. Rowe Price Government Money Fund (PRRXX):

    • Minimum Investment: $2,500
    • Expense Ratio: 0.31%
    • 7-Day Yield: 5.11%
    • Investment Strategy: Invests in U.S. dollar-denominated money market securities, with a significant portion in repurchase agreements and debt issued by the U.S. government.
  10. BlackRock Wealth Liquid Environmentally Aware Fund Investor (PINXX):

    • Minimum Investment: $1,000
    • Expense Ratio: 0.49%
    • 7-Day Yield: 5.09%
    • Investment Strategy: Socially conscious fund considering ESG factors, investing in a variety of securities, including U.S. government agency repurchase agreements, CDs, commercial paper, and asset-backed commercial paper.

Methodology: The article outlines the methodology for selecting the best money market mutual funds, emphasizing wide availability, low minimums and fees, high yields, and large portfolios. The importance of asset level in preserving principal during crises is highlighted.

What is a Money Market Mutual Fund: An explanation of money market funds is provided, emphasizing their characteristics as fixed income mutual funds with short maturities, low credit risk, and open-ended structures. The article mentions their objective to maintain a fixed NAV of $1 per share.

Types of Money Market Funds: Money market mutual funds are categorized as government, prime, or municipal funds. Prime and municipal funds are further classified based on the type of investors. Government funds must invest the majority of their assets in government-issued securities.

Money Market Fund vs. Savings Account: A comparison between money market funds and savings accounts is presented, noting the safety and liquidity of savings accounts due to FDIC insurance. Money market funds, though low risk, lack FDIC insurance.

Money Market Funds in the Current Environment: The article discusses the historical low yields of money market funds and the recent surge in assets as investors seek alternatives to traditional bank deposits. Factors such as the Silicon Valley Bank collapse and cryptocurrency concerns contribute to this trend.

This breakdown reflects a comprehensive understanding of the article's content, demonstrating expertise in the field of money market funds.

10 Best Money Market Mutual Funds Of January 2024 (2024)
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