1. Vanguard Treasury Money Market Fund (VUSXX)
The Vanguard Treasury Money Market Fund (VUSXX +0.00%) is primarily composed of U.S. Treasury Bills, with 98% of its holdings in these instruments. It’s one of the most conservative options offered by Vanguard, but it still has an expense ratio of 0.07%. Its seven-day yield in late September 2026 was 3.78%.
This is a good choice for someone looking to preserve wealth in a cash-equivalent account. Although it’s taxable, it’s also in highly unshakeable securities. There is virtually no risk in T-Bills.
2. Fidelity Institutional Government Portfolio (FIGXX)
The Fidelity Institutional Government Portfolio (FIGXX +0.00%) is another highly secure money market fund, filled with government-backed instruments. But instead of strictly being Treasuries, it’s made up of Treasuries, agency bonds, and government repurchase agreements. It’s also a very conservative option, though government agencies are not quite as unshakeable as T-Bills.
The expense ratio is 0.18%, and the seven-day yield in late September 2026 was 3.71%. The fund has been around since 1985 and is considered a taxable account.
3. Invesco Premiere Portfolio (IMRXX)
The Invesco Premiere Portfolio (IMRXX +0.00%) also contains many government securities, but that’s not all it contains. If you’re looking for a money market fund that’s a mix of public and private debt, IMRXX may be the right investment for you. In addition to government repurchase agreements, it has significant holdings in asset-backed commercial loans and certificates of deposit.
Because of the nature of these investments, there is some risk, but it’s still a highly rated fund with an inception date of 1988. In late September 2026, the seven-day yield was 3.91%. It has an expense ratio of 0.18%.
4. iShares Prime Money Market ETF (PMMF)
The iShares Prime Money Market ETF (PMMF +0.01%) is a hybrid instrument for anyone looking for the security’s mullet equivalent. It’s structured like an ETF and trades on exchanges in the same way, but also invests in money market instruments and follows money market rules. Much of what it invests in is commercial securities from large banks such as JPMorgan Chase (JPM -0.66%) and Wells Fargo (WFC -0.25%), as well as from foreign banks, both private and public.
These investments are still not considered high risk, but are certainly riskier due to the involvement of private banks and other financial companies. Its seven-day yield in late September 2026 was 3.90%. It has an expense ratio of 0.20%.
5. Western Asset Select Tax Free Reserves (LTFXX)
For something truly different, the Western Asset Select Tax Free Reserves fund may be for you. Unlike the other money market funds on this list, it focuses exclusively on variable-rate demand notes. These are long-term municipal bonds with variable interest rates and a put option that allows the bond to be sold back to the issuer at face value. This type of bond is also generally tax-advantaged, which can be a benefit for investors looking to minimize their tax liability.
The net expense ratio for this product is 0.23%. It had a seven-day yield of 3.08% in late September 2026.
How to buy money market funds
- Open your brokerage account: Log in to your brokerage account where you handle your investments. If you don’t have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
- Search for the fund: Enter the ticker into the search bar to bring up the fund’s trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this fund.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you’re willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Benefits and risks of investing in money market funds
The best money market funds can be solid instruments for many investors, especially when coupled with stock portfolios. However, there are both benefits and risks to consider:
- Low risk, low return. The best money market funds are very low-risk and can be treated almost like cash. This ensures the preservation of capital but doesn’t really allow it to grow much. This is why the returns for money market funds are in the 3% range. Compared to an S&P index fund like the Vanguard S&P 500 ETF (VOO +0.54%), which has returned 15% this year, 3% is basically nothing.
- Exposure to debt securities. It’s really both a benefit and a risk. If you want exposure to debt securities, money market funds will do that for you without your having to be an expert in evaluating these instruments. Instead of looking at individual bonds, for example, you can look at the fund’s rating to gauge your risk. The higher the risk, the higher the reward, to a point.
- High liquidity. Like investing in stocks, money market funds are highly liquid. This gives you some advantages over instruments like T-Bills, which you often invest in indirectly through a fund. Unlike a bill or a bond that has to find a matching buyer when you’re a seller, money market funds can often be sold much more like stocks to free up cash on demand.
Methodology: How these funds were chosen
The money market funds in this article were chosen based on expense ratios, returns, credit ratings, and their security mixes. I tried to select a representative sample that could illustrate different types of funds for an investor just starting to explore this area.
Should you invest in money market funds?
Money market funds can be a part of a complete portfolio, but they should probably not be the only thing you invest in. The safest ones have very low returns, and the money market funds with higher returns either have high expense ratios or are incredibly risky. However, they do fill a need for someone looking specifically for wealth preservation versus rapid growth.
So, should you invest in money market funds? Probably everyone should have instruments like this, if not specifically money market funds, in their portfolios. It’s always a balancing act between growth and preservation, and money market funds do tick the preservation box pretty hard with low expense ratios for the most reputable among them.