Best Money Market Funds (October 2026): Ranked by 7-Day Yield and Cost
Written & reviewed by Hans Goldstein, EA, independent licensed insurance producer · CA license 4273294 · NPN 20602398Admitted to practice before the IRS
Yields and expenses re-checked on Vanguard, Fidelity and Schwab sites on October 3, 2026 (J.P. Morgan figure from September 24, 2026) · Reviewed
Short answer
The highest-yielding major retail money market fund on October 2, 2026 was Vanguard Treasury Money Market (VUSXX) at 3.82%, followed by Vanguard Federal (VMFXX) at 3.79% and Schwab Prime Advantage (SWVXX) at 3.71%, per the fund companies' sites. Most Fidelity funds paid 3.49% to 3.56%. The ranking comes down mostly to cost: Vanguard charges 0.07% to 0.11%, most others 0.34% to 0.42%, and all of them paid less than a 3-month T-bill (4.24% on September 24, 2026).
Money market fund vs MYGA, after tax
What $100,000 earns in 5 years: money market fund vs MYGA, after tax
Rates used: Money market fund 3.76%, the highest 7-day yield we tracked (VUSXX, fund sites, September 23, 2026); yields change daily; change it to the rate you are offered. MYGA 5.95%, the best A-rated rate we track as of October 13, 2026: Delaware Life Pinnacle Plus 5-year (AM Best A-, negative outlook, 7/31/2026), $100,000 and up, effective October 6, 2026 (Delaware Life rate sheet).
| Money market fund, interest taxed every year | $115,550 |
|---|---|
| MYGA, tax-deferred, before tax | $133,507 |
| MYGA after paying tax on all the interest at withdrawal | $126,136 |
| Tax deferral alone adds about | $674 |
| MYGA ahead of the money market fund, after tax | $10,586 |
Assumes 22% federal and 0% state income tax, no withdrawals, rates held for the whole term. MYGA interest is taxed as ordinary income when you withdraw it, not as capital gains. Gains taken before age 59 1/2 can owe a 10% IRS penalty, and cashing out early can cost a surrender charge. In an IRA both grow tax-deferred, so the edge there is the rate alone. A MYGA is backed by the issuing insurer's claims-paying ability and your state's guaranty association up to its limits, not the FDIC. General education, not tax, legal or financial advice.
Money market funds ranked (October 2026)
| # | Fund | Type | 7-day yield (10/02/2026 unless noted) | Expense ratio | Minimum | Why it is here |
|---|---|---|---|---|---|---|
| 1 | Vanguard Treasury Money Market (VUSXX) | Treasury | 3.82% | 0.07% | $3,000 | Lowest cost; best state-tax profile for high-tax states |
| 2 | Vanguard Federal Money Market (VMFXX) | Government | 3.79% | 0.11% | $3,000 | Vanguard's settlement fund; very low cost |
| 3 | Schwab Prime Advantage Money Fund (SWVXX) | Prime | 3.71% | 0.34% | None | Highest-yielding Schwab retail fund; prime credit exposure |
| 4 | Fidelity Money Market Premium Class (FZDXX) | Prime | 3.68% | 0.30% net | $100,000 | Fidelity's best yield for larger balances |
| 5 | Schwab Treasury Obligations Money Fund (SNOXX) | Treasury | 3.61% | 0.34% | None | Schwab's best-paying no-minimum Treasury fund |
| 6 | Fidelity Government Cash Reserves (FDRXX) | Government | 3.56% | 0.37% gross | $0 | Cheapest Fidelity government core option |
| 7 | Fidelity Money Market Fund (SPRXX) | Prime | 3.56% | 0.42% gross | $0 | No-minimum Fidelity prime fund |
| 8 | Schwab U.S. Treasury Money Fund (SNSXX) | Treasury | 3.54% | 0.34% | None | Treasury option at Schwab |
| 9 | Fidelity Treasury Money Market (FZFXX) | Treasury | 3.53% | 0.42% gross | $0 | Most Treasury-heavy Fidelity fund checked (64% direct Treasuries, 08/31/2026) |
| 10 | JPMorgan Liquid Assets, Morgan (MJLXX) | Prime | 3.53% (09/24) | see prospectus | $1,000 | Large prime fund; retail class |
| 11 | Fidelity Government Money Market (SPAXX) | Government | 3.49% | 0.42% | $0 | Common Fidelity core position |
| 12 | Fidelity Treasury Only Money Market (FDLXX) | Treasury | 3.49% | 0.42% gross | $0 | Treasury-only at Fidelity |
Rates expire like milk.
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How money funds compare with other cash options
| Cash alternative | Rate | As of |
|---|---|---|
| Federal funds target range | 3.75%-4.00% | 09/17/2026 |
| 3-month Treasury bill | 4.24% | 09/24/2026 |
| 1-year Treasury | 4.51% | 09/24/2026 |
| Best 1-year CDs (national) | 4.35%-4.50% APY | 09/25/2026 |
| Sallie Mae High-Yield Savings | 3.85% APY | 09/24/2026 |
| Marcus High-Yield Savings | 3.50% APY | 09/24/2026 |
Best Fidelity money market fund (October 2026)
For balances under $100,000, FDRXX and SPRXX tied for Fidelity's highest yield at 3.56% on October 2, 2026; FDRXX is the government fund of the two. With $100,000 or more, FZDXX paid 3.68%. In a high-tax state, the Treasury funds FZFXX (3.53%) and FDLXX (3.49%) can net more after state tax. Fidelity's full lineup is compared in the SPAXX review and SPAXX vs FDRXX.
VUSXX vs SPAXX
On October 2, 2026 VUSXX paid 3.82% and SPAXX 3.49%, a 0.33-point gap that is almost entirely the expense ratio (0.07% vs 0.42%). Example: on $100,000 that is about $330 a year before tax at those yields. SPAXX's advantage is convenience: it is the automatic core position in many Fidelity accounts. Details: VUSXX review.
Other funds people ask about
Federated Hermes Prime Cash Obligations Fund (PCOXX), a $104 billion prime fund sold mainly through advisors and platforms, had a 3.88% 7-day net yield on October 2, 2026; see the PCOXX review. Schwab's $1 million Ultra share classes paid about 0.15 points more than the Investor classes in the table; they are listed in SNSXX vs SWVXX.
From my desk: how I compare this to locked rates
When I compare a client’s cash options, I sort them by when the money is needed before I sort them by yield. A money fund is the right answer for the next few months. For money that has sat untouched for years, the comparison that matters is a daily-reset, yearly-taxed yield against a locked, tax-deferred one.
Example: $250,000 for five years at VUSXX’s 3.82% (assumed constant) ends near $288,500 after 24% federal tax; a 5-year MYGA at 5.80% (low end of the A-rated range on September 24, 2026) ends near $311,900, with tax deferred, a surrender charge for early exit, and the rate backed by the claims-paying ability of the issuing insurer. I do not sell or advise on money market funds; this is the insurance side of the comparison.
How to choose
- Start with cost. Within a fund type, yield differences are mostly expense-ratio differences.
- In a high-tax state, lean toward a Treasury fund. Repo-heavy government funds pass through less state-exempt income.
- Prime funds pay a little more for taking corporate and bank credit risk, and they can charge liquidity fees.
- Don’t ignore convenience. The fund at your own brokerage settles trades automatically; moving cash elsewhere is a manual step.
- The Fed just hiked. The target rose to 3.75% to 4.00% on September 16, 2026, and fund yields lag by a few weeks.
In September 2026 I removed funds whose current yield or ticker I could not confirm on the sponsor's site. An earlier version listed TMPXX, which does not appear on the SEC's ticker list, and yields of 4.00% to 4.35% that were months out of date.
VUSXX vs. a 5-year MYGA: $250,000 math
| $250,000 for 5 years | VUSXX at 3.82% | 5-yr MYGA at 5.80% |
|---|---|---|
| Rate | Variable, resets daily | 5.80%, fixed for the term |
| Tax on earnings | Every year | Deferred until withdrawn |
| Value after 5 years, after 24% federal tax | ~$288,500 | ~$311,900 (tax paid at the end) |
| Protection | Not FDIC insured; seeks $1.00 NAV | Insurer claims-paying ability + state guaranty association (limits vary by state) |
| Getting out early | Daily liquidity | Surrender charge above the free-withdrawal amount; IRS 10% penalty before 59½ |
About $23,400 more after federal tax on the MYGA (24% bracket, state tax ignored). The VUSXX column assumes today's yield holds for five years; a money market yield resets daily, so that flatters it. For money you may need inside two years, or that must stay FDIC insured, the MYGA is the wrong tool. MYGA benchmark: carriers rated A or better topped out around 5.80% to 6.00% on 5-year compound-interest MYGAs, per AnnuityRateWatch carrier data, September 24, 2026. Rates vary by state, premium and carrier.
Current MYGA rates · Annuity vs CD · HYSA vs money market fund
Best money market funds: FAQ
What money market fund pays the most right now?
Among the major retail funds checked on October 3, 2026, Vanguard Treasury Money Market Fund (VUSXX) led at 3.82% (7-day, October 2), followed by Vanguard Federal (VMFXX) at 3.79% and Schwab Prime Advantage (SWVXX) at 3.71%.
Why do Vanguard funds yield more?
Cost. VUSXX charges 0.07% and VMFXX 0.11%, versus 0.34% at Schwab and 0.37% to 0.42% on most Fidelity funds. The portfolios earn similar gross yields; the expense ratio comes straight out of what you receive.
Which money market fund is best for high-tax states?
A Treasury fund, because more of its income can be state-exempt: VUSXX, SNSXX, FZFXX or FDLXX. Government funds hold repurchase agreements whose income is generally state-taxable. Check the fund's year-end percentage and your state's rules.
Are money market funds safe?
They are not FDIC insured and can lose value, but government and Treasury funds hold short-term U.S. government debt and repurchase agreements backed by it. Prime funds add corporate and bank credit and can charge liquidity fees under SEC rules.
Do money market funds beat CDs or Treasuries right now?
Not on yield. On September 24, 2026 the 3-month Treasury bill yielded 4.24% and the 1-year 4.51%, and the best 1-year CDs paid about 4.35% to 4.50%. All of those beat the 3.49% to 3.82% range of the funds listed here. Money funds win on daily liquidity.
What happened to the Fed rate?
On September 16, 2026 the Federal Reserve raised its target range by 0.25%, to 3.75% to 4.00%. That came after a cut to 3.50% to 3.75% in December 2025. Money fund yields typically follow within a few weeks.
My take
In October 2026 the best money funds for most savers were Vanguard's VUSXX and VMFXX, because they are cheapest. Money funds are for cash you need to reach; with T-bills and 1-year CDs paying more, money that can sit a year or five belongs somewhere with a fixed rate.
Hans Goldstein is an independent licensed insurance producer (CA license 4273294, NPN 20602398). He is not affiliated with Vanguard, Fidelity, Schwab or J.P. Morgan, does not sell money market funds or other securities, and gives no advice on them. Fund data is copied from the fund company's website as of the dates shown. Money market funds are not FDIC insured and can lose value. Past performance does not predict future results. MYGA figures are illustrations, not quotes.
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Disclosure
This review reflects publicly available fund prospectuses, fact sheets, and approximate 7-day SEC yields as of the date stated above. Money market fund yields change daily and reset roughly in line with the federal funds rate; always confirm current yield, expense ratio, holdings, and weighted average maturity against the most recent fund disclosure document before committing capital. Money market funds are not FDIC-insured. Government and Treasury money market funds historically maintain a stable $1.00 NAV but are not guaranteed to do so. See the "breaking the buck" history. Prime money market funds may impose liquidity fees or redemption gates during market stress. This is general education, not a personal recommendation or an offer of any product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) and does not sell securities or money market funds; comparisons to multi-year guaranteed annuities (MYGAs) are provided for informational context only. No compensation has been received from any fund company in connection with the publication of this review. Always read the actual fund prospectus and consult a licensed advisor before investing. Past yield does not predict future yield. State income tax treatment of U.S. Treasury obligations varies and is subject to change. Tax discussion reflects federal and California law as of 2026 and is subject to change.