BlackRock Liquidity TempFund (TMPXX) Review (2026)
Quick take: BlackRock TempFund is one of the largest institutional prime money market funds in the world, with retail-accessible share classes. Competitive yield, reasonable expense ratio for a prime product, and the credit muscle of the world's largest asset manager. Carries the same edge-case prime-fund risks as any commercial-paper-holding MMF.
| Fund family | BlackRock |
| Holdings type | Prime (commercial paper, CDs, repo, agency, Treasury) |
| Weighted avg. maturity | ~35 days |
| State tax on dividends | Minimal state-tax exemption (prime fund) |
How BlackRock Liquidity TempFund actually works
TempFund is the BlackRock answer to FZDXX, JLAXX, and other big-brand prime MMFs. The fund is well-run, deeply liquid, and the expense ratio is reasonable. As with all prime MMFs, the right question is not 'is this a good fund' (yes) but 'do I want prime exposure at all' — and the answer for most retirement-age buyers is no, government and Treasury MMFs are the cleaner sleep-at-night choice.
Every U.S. money market fund operates under SEC Rule 2a-7, which dictates portfolio quality, weighted average maturity (60 days max for the WAM, 120 days for the weighted average life), and daily/weekly liquid asset minimums. The differences between funds are at the margin: which short paper they hold, what expense ratio they charge, and what tax treatment the dividends qualify for.
Holdings overview
Holdings type: Prime (commercial paper, CDs, repo, agency, Treasury).
Weighted average maturity (WAM): ~35 days. WAM determines how fast the fund's yield repositions when the Fed moves. A 30-day WAM means within roughly one month of a Fed rate move, the entire portfolio has repriced — that's why MMF yields chase the Fed funds rate so tightly.
State-tax treatment: Minimal state-tax exemption (prime fund).
What we like
- Competitive yield with a reasonable 21 bps expense ratio for the institutional share class.
- World's largest asset manager — deep credit and treasury operations.
- Multiple share classes for different account sizes.
- Strong liquidity infrastructure.
What we don't
- Prime exposure — commercial paper carries edge-case credit risk.
- Prime funds can impose liquidity fees or redemption gates in stressed markets.
- Almost no state-tax exemption.
- Retail share classes can have higher expense ratios than the headline institutional class.
- Yield resets within weeks of Fed cuts.
Tax notes
Money market fund dividends are reported on Form 1099-DIV as ordinary income and taxed at your marginal federal rate (10% – 37%). For high earners in 32%+ brackets plus state tax, the after-tax yield on a 4.20% MMF can drop to 2.50-2.70%.
If the fund holds U.S. Treasury obligations, the portion of dividends attributable to those holdings is exempt from state and local income tax in most states (CA, NY, NJ, MA, OR enforce this strictly — CT, IL have minimum percentage thresholds). The fund publishes a year-end disclosure showing what percentage of dividends qualify. For a Californian in the 9.3% state bracket, the state-tax exemption on a Treasury-only MMF is worth ~40 bps of effective after-tax yield.
By contrast, multi-year guaranteed annuity (MYGA) growth defers tax until withdrawal. For a high earner who doesn't need the income, that deferral compounds into a meaningful effective-yield bump.
When a MYGA beats this MMF — $250,000 math
BlackRock Liquidity TempFund pays roughly 4.22% today. That yield resets within days of any Fed move — up or down. A multi-year guaranteed annuity (MYGA) locks a rate for the entire term. Comparing both on $250,000:
| Scenario | 3-Year Term | 5-Year Term |
|---|---|---|
| BlackRock Liquidity TempFund @ 4.22% (held constant — optimistic) | $283,004 | $307,394 |
| Top A-rated MYGA @ 5.40% / 5.55% | $292,726 | $327,515 |
| MYGA advantage | +$9,722 | +$20,121 |
And the MYGA math above understates the gap, because:
- The MMF yield is held constant. In reality MMF yields move with the Fed funds rate — the Fed projects rate cuts through 2027.
- MMF dividends are taxed every year as ordinary income. MYGA growth defers tax until withdrawal. For a 32% federal + 9.3% CA earner, annual tax drag is ~30-40% of the yield.
- The MYGA rate is contractually guaranteed; the MMF yield is not guaranteed at all.
For money you don't need within 3 years, the math almost always favors a MYGA — not because MMFs are bad, but because MMFs were never designed for multi-year money.
Who this fund is best for
Short-term cash you may need within the next 6-12 months. Brokerage cash that would otherwise sit in a low-yield sweep. Emergency reserves. Any cash position where liquidity and current yield matter more than rate certainty.
Who should consider an alternative
If you have $50K+ that you reliably won't touch for 3+ years, the MMF is the wrong vehicle. The correct vehicle for 3-5 year money in 2026 is a top-rated MYGA at 5.40-5.60%. The math is in the table above, and it's not close. See current MYGA rates →
FAQ — BlackRock Liquidity TempFund
Q: Is my money market fund FDIC-insured?
A: No. Money market funds are SEC-regulated mutual funds, not bank deposits. They are not FDIC- or NCUA-insured. Government and Treasury MMFs invest in extremely safe collateral (T-bills, repo backed by Treasuries, agency paper) but are not guaranteed to maintain the $1.00 NAV.
Q: What is the 7-day SEC yield?
A: The 7-day SEC yield is the annualized net yield earned by the fund over the prior 7 days, after expenses. It is the industry-standard yield disclosure and is updated daily. It is roughly forward-looking for the next week, not a guarantee of forward yield.
Q: How quickly does the yield reset when the Fed changes rates?
A: Very fast. Government MMFs hold paper with a weighted average maturity (WAM) of roughly 7-45 days, so within a month of a Fed move the entire portfolio has repriced. A 25 bp cut typically shows up in the 7-day yield within 2-4 weeks.
Q: Can I lose money in a money market fund?
A: Realistically, almost never on government and Treasury funds. Twice in history a U.S. money market fund has 'broken the buck' (NAV below $1.00): the Community Bankers U.S. Government Fund in 1994 and the Reserve Primary Fund in 2008. Both were edge cases. Government and Treasury MMFs are the safest tier.
Q: Are Treasury MMF dividends state-tax-exempt?
A: Generally yes — the portion of dividends attributable to direct U.S. Treasury obligations is exempt from state and local income tax in most states. Funds publish a year-end 'U.S. government interest' percentage. For high-state-tax residents (CA, NY, NJ, OR), this can boost effective yield by 30-50 bps.
Q: How is a MMF different from a high-yield savings account?
A: HYSAs are FDIC-insured bank deposits; MMFs are SEC-regulated mutual funds. HYSA APYs are set by the bank and tend to lag the Fed. MMF 7-day yields move with the Fed within weeks. Top MMFs typically out-yield top HYSAs by 30-80 bps in a stable rate environment.
Q: Why would I ever choose a MYGA over a money market fund?
A: For money you won't need for 3+ years. A MYGA locks today's rate (5.40-5.60% on top A-rated 3-5 year products) for the full term — the MMF yield can fall 200+ bps in a single year if the Fed cuts. MYGAs also defer tax until withdrawal, which is meaningful for high earners.
Q: What happens to a MMF in a Fed cutting cycle?
A: Yield drops in lockstep, fast. In 2020 the Fed cut from 1.75% to 0.25% over 4 months; government MMF 7-day yields fell from ~1.65% to ~0.02% by mid-year. Anyone who locked a 3-5 year CD or MYGA at the 2020 highs out-earned MMF holders by hundreds of bps annually.
More Money Market Fund research
- Best Money Market Funds 2026 (ranked)
- MMF vs MYGA — when each wins
- MMF vs HYSA — yield spread and risk
- MMF vs CD — liquidity vs lock
- Breaking the buck — 1994 & 2008 cases
- How MMF yields track the Fed funds rate
- High-Yield Savings reviews
- Best MYGA rates 2026
Bottom line
BlackRock Liquidity TempFund (TMPXX) is a competent, reasonably priced money market fund. For short-term cash inside a BlackRock brokerage account, it does its job. For money you actually won't need for 3+ years, you can do meaningfully better with a locked rate on a top-rated MYGA — same A-rated insurance carriers, 100+ bps higher rate, tax deferred. Worth a 15-minute independent second opinion before letting six-figure cash sit in this fund for years.
About Hans Goldstein: Independent retirement income specialist. CA Life License #4163961. NPN #20602398. Reviews 30+ carriers and the full menu of cash alternatives. Phone: 213-414-2808. Email: hans@goldsteinco.net.
Hans is independently licensed as an insurance producer; he does not sell money market funds or other securities. These reviews are based on publicly available fund prospectuses, fact sheets, SEC filings, and SEC-yield reporting requirements.
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Money market funds are great for short-term cash. For money you don't need for 3+ years, a multi-year guaranteed annuity (MYGA) typically pays 100-150 bps more and defers tax. Get an independent side-by-side before you let cash drift in a MMF for 5 years.
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📞 Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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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 "breaking the buck" history. Prime money market funds may impose liquidity fees or redemption gates during market stress. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific 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.