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The 5 Best Money Market Funds for May and How To Invest in Them
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The 5 Best Money Market Funds for May and How To Invest in Them
Money market mutual funds can be useful savings vehicles. Here are the 5 best money market funds as measured by yield, and how to choose which funds may be best for you.
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9 years of experience Expertise Stocks ETFs economic newsSam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. Sam has previously written for Investopedia, Benzinga, Seeking Alpha, Wealth Daily and Investment U, and has worked as an editor for Investment U, Wealth Daily and Haven Investment Letter. He is based in Brooklyn, New York.
Sam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. Sam has previously written for Investopedia, Benzinga, Seeking Alpha, Wealth Daily and Investment U, and has worked as an editor for Investment U, Wealth Daily and Haven Investment Letter. He is based in Brooklyn, New York. Published in Lead Writer + more + more
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Previously, she led taxes and retirement coverage at NerdWallet.Pamela joined NerdWallet after working at companies including Hallmark Cards, Sprint Corp. and The Kansas City Star. She has been a writer and editor for more than 20 years.
Pamela joined NerdWallet after working at companies including Hallmark Cards, Sprint Corp. and The Kansas City Star. She has been a writer and editor for more than 20 years.Pamela is a thought leader in content diversity, equity, inclusion and belonging, and finds ways to make every piece of content conversational and accessible to all.
Pamela is a thought leader in content diversity, equity, inclusion and belonging, and finds ways to make every piece of content conversational and accessible to all.She is a graduate of the Maynard Institute's Maynard 200 program, and the National Association of Black Journalists Executive Leadership Academy. She is a two-time winner of the Kansas City Association of Black Journalists' President's Award. She was also founding co-chair of NerdWallet's Nerds of Color employee resource group.
She is a graduate of the Maynard Institute's Maynard 200 program, and the National Association of Black Journalists Executive Leadership Academy. She is a two-time winner of the Kansas City Association of Black Journalists' President's Award. She was also founding co-chair of NerdWallet's Nerds of Color employee resource group. Managing Editor + more + moreWhile rates have come down since the highs of recent years, today's interest rates are still a welcome environment for income-seeking investors — especially those who are considering investing in money market mutual funds. And month-over-month, we actually saw some pretty substantial increases in rates. At this time last month, the highest-paying money market fund on this list (UBS Select Treasury Preferred Fund) had a forward yield dividend of 3.36%. Today, it's up to 3.6%.
While rates have come down since the highs of recent years, today's interest rates are still a welcome environment for income-seeking investors — especially those who are considering investing in money market mutual funds. And month-over-month, we actually saw some pretty substantial increases in rates. At this time last month, the highest-paying money market fund on this list (UBS Select Treasury Preferred Fund) had a forward yield dividend of 3.36%. Today, it's up to 3.6%.Money market funds are investment vehicles that invest in high-quality, short-term debt securities, and pass the interest payments on to investors. Like many index funds and other mutual funds, money market mutual funds only change price once each trading day.
Money market funds are investment vehicles that invest in high-quality, short-term debt securities, and pass the interest payments on to investors. Like many index funds and other mutual funds, money market mutual funds only change price once each trading day.And while they’re not risk-free, they are typically considered lower-risk than most other types of mutual funds, and can still deliver relatively high yields. It’s just a matter of finding the right one for your portfolio.
And while they’re not risk-free, they are typically considered lower-risk than most other types of mutual funds, and can still deliver relatively high yields. It’s just a matter of finding the right one for your portfolio.5 best money market funds by yield for May 2026
5 best money market funds by yield for May 2026Below is a list of the five highest-yielding money market mutual funds that have at least $1 billion in assets.
Below is a list of the five highest-yielding money market mutual funds that have at least $1 billion in assets.Symbol
Symbol
Symbol SymbolFund name
Fund name
Fund name Fund nameYield
Yield
Yield YieldSTPXX
STPXXUBS Select Treasury Preferred Fund
UBS Select Treasury Preferred Fund3.6%
3.6%PIFXX
PIFXXGovernment Portfolio
Government Portfolio3.6%
3.6%DTLXX
DTLXXDreyfus Treasury and Agency Liquidity Money Market Fund
Dreyfus Treasury and Agency Liquidity Money Market Fund3.53%
3.53%NOGXX
NOGXXU.S. Government Money Market Fund
U.S. Government Money Market Fund3.48%
3.48%SNOXX
SNOXXSchwab Treasury Obligations Money Fund
Schwab Treasury Obligations Money Fund3.35%
3.35%Source: MutualFunds.com. Data is current as of May 1, 2026, and is for informational purposes only.
Source: MutualFunds.com. Data is current as of May 1, 2026, and is for informational purposes only. Source: MutualFunds.com. Data is current as of May 1, 2026, and is for informational purposes only.Why invest in money market funds?
Why invest in money market funds?Money market funds are considered a good place to park cash, because they're much less volatile than the stock or bond markets.
Money market funds are considered a good place to park cash, because they're much less volatile than the stock or bond markets.Money market funds are used by investors who want to protect rather than grow their savings, but still aim to earn some interest. Typically, the interest rate paid by money market funds is on par with or slightly higher than bank savings or money market accounts. Money market funds are often used by investors to house cash holdings within brokerage accounts — investors may keep some cash in a money market fund, so it is ready to invest when opportunities arise.
Money market funds are used by investors who want to protect rather than grow their savings, but still aim to earn some interest. Typically, the interest rate paid by money market funds is on par with or slightly higher than bank savings or money market accounts. Money market funds are often used by investors to house cash holdings within brokerage accounts — investors may keep some cash in a money market fund, so it is ready to invest when opportunities arise.They are cost effective because, unlike many mutual funds, they have no fees when your cash joins or leaves the fund. There also can be tax benefits, as some money market funds hold municipal securities that are exempt from federal and state taxes.
They are cost effective because, unlike many mutual funds, they have no fees when your cash joins or leaves the fund. There also can be tax benefits, as some money market funds hold municipal securities that are exempt from federal and state taxes.What’s the downside of money market funds?
What’s the downside of money market funds?Lower long-term returns. Money market funds aren’t a great tool for building long-term savings, including retirement savings. The younger the investor, the more a portfolio should contain equity mutual funds, which are riskier but also have the potential for significantly higher annual returns. Money market funds often are best used when you’re in or near retirement, or when you're looking to stash money for a short-term goal.
Lower long-term returns Lower long-term returns . Money market funds aren’t a great tool for building long-term savings, including retirement savings. The younger the investor, the more a portfolio should contain equity mutual funds, which are riskier but also have the potential for significantly higher annual returns. Money market funds often are best used when you’re in or near retirement, or when you're looking to stash money for a short-term goal.Like all investments, money market funds carry a risk of losing value. This is especially true when uncertainty swirls around the U.S debt ceiling. Still, money market funds are widely considered a safe alternative to bank deposits because federal laws require funds to hold only high-quality, short-term debt.
Like all investments, money market funds carry a risk of losing value. Like all investments, money market funds carry a risk of losing value. This is especially true when uncertainty swirls around the U.S debt ceiling. Still, money market funds are widely considered a safe alternative to bank deposits because federal laws require funds to hold only high-quality, short-term debt.Types of money market funds
Types of money market fundsYou may be seeing that some of the funds in the table above are called “government” money market funds, while others are specified as “municipal” money market funds. These refer to separate types of money market funds — and it’s important to understand the differences between them.
You may be seeing that some of the funds in the table above are called “government” money market funds, while others are specified as “municipal” money market funds. These refer to separate types of money market funds — and it’s important to understand the differences between them.The three types of money market funds are government money market funds, municipal money market funds and prime money market funds. Each type has a slightly different investment profile and tax treatment.
The three types of money market funds are government money market funds, municipal money market funds and prime money market funds. Each type has a slightly different investment profile and tax treatment.Government money market funds
Government money market fundsGovernment money market funds invest at least 99.5% of their money into highly liquid, government-backed assets such as cash, short-term U.S. government debt and repurchase agreements backed by government debt.
Government money market funds invest at least 99.5% of their money into highly liquid, government-backed assets such as cash, short-term U.S. government debt and repurchase agreements backed by government debt.Income from these funds is subject to federal income tax, unless it is held in a tax-advantaged account such as an individual retirement account (IRA).
Income from these funds is subject to federal income tax, unless it is held in a tax-advantaged account such as an individual retirement account (IRA) .Some of the assets in government money market funds, such as Treasury bills, generate income that is usually exempt from state and local taxes. However, some of the other assets, such as repurchase agreements, are subject to those taxes — so it’s a good idea to assume that government money market fund income is subject to those taxes as well.
Some of the assets in government money market funds, such as Treasury bills , generate income that is usually exempt from state and local taxes. However, some of the other assets, such as repurchase agreements, are subject to those taxes — so it’s a good idea to assume that government money market fund income is subject to those taxes as well.There is, however, another type of money market fund whose income can be exempt from both federal and state taxes, under the right circumstances. That's the municipal money market fund.
There is, however, another type of money market fund whose income can be exempt from both federal and state taxes, under the right circumstances. That's the municipal money market fund.Brokerage firms
Brokerage firms
Brokerage firmson Charles Schwab's website
on E*TRADE's website
on Vanguard's website
on Fidelity's website
Municipal money market funds
Municipal money market fundsMunicipal money market mutual funds — also known as tax-free money market mutual funds — invest in short-term municipal debt.
Municipal money market mutual funds — also known as tax-free money market mutual funds — invest in short-term municipal debt.The income generated by these funds — like the income generated by municipal bonds themselves — is exempt from federal income taxes. Most states also exempt their own municipal bonds from state income taxes.
The income generated by these funds — like the income generated by municipal bonds themselves — is exempt from federal income taxes. Most states also exempt their own municipal bonds from state income taxes.So depending on where you live, you may be able to find a municipal money market fund whose income is exempt from both federal and state taxes. Look for a fund that invests specifically in municipal debt from your state of residence.
So depending on where you live, you may be able to find a municipal money market fund whose income is exempt from both federal and state taxes. Look for a fund that invests specifically in municipal debt from your state of residence.Prime money market funds
Prime money market fundsPrime money market mutual funds invest in short-term corporate debt, rather than government debt.
Prime money market mutual funds invest in short-term corporate debt, rather than government debt.The income generated by prime money market funds — like the income generated by corporate bonds — is fully taxable, unless it is held in a tax-advantaged account.
The income generated by prime money market funds — like the income generated by corporate bonds — is fully taxable, unless it is held in a tax-advantaged account.Money market mutual funds vs. money market accounts
Money market mutual funds vs. money market accountsMoney market funds and money market accounts have similar names, invest in similar assets and pay similar yields. The major differences between money market mutual funds and money market accounts are features, tax treatment and Federal Deposit Insurance Corporation (FDIC) coverage.
Money market funds and money market accounts have similar names, invest in similar assets and pay similar yields. The major differences between money market mutual funds and money market accounts are features, tax treatment and Federal Deposit Insurance Corporation (FDIC) coverage .The table below can help clarify them.
The table below can help clarify them.Money market mutual funds
Money market mutual funds
Money market mutual funds Money market mutual fundsMoney market accounts
Money market accounts
Money market accounts Money market accountsFDIC coverage
FDIC coverage FDIC coverageNo.
No.Yes, up to $250,000 per person per account.
Yes, up to $250,000 per person per account.Features
Features FeaturesLimited. The fund can be bought and sold, and income can be cashed out or reinvested. Some funds may have check-writing privileges.
Limited. The fund can be bought and sold, and income can be cashed out or reinvested. Some funds may have check-writing privileges.Often has similar features to a checking account: ATM withdrawals, check-writing privileges, direct deposit, etc.
Often has similar features to a checking account: ATM withdrawals, check-writing privileges, direct deposit, etc.Tax treatment of income
Tax treatment of income Tax treatment of incomeMay be exempt from some or all income taxes, depending on fund type and location.
May be exempt from some or all income taxes, depending on fund type and location.Fully taxable.
Fully taxable.How to choose a money market fund
How to choose a money market fundSee what’s available in your brokerage account
See what’s available in your brokerage accountNot every money market mutual fund is available in every brokerage account. Some brokers that are also mutual fund custodians — Fidelity, for example — only offer access to their own money market funds.
Not every money market mutual fund is available in every brokerage account. Some brokers that are also mutual fund custodians — Fidelity , for example — only offer access to their own money market funds.» Not satisfied with your broker’s offerings? See our list of the best brokers for mutual funds.
» Not satisfied with your broker’s offerings? » Not satisfied with your broker’s offerings? See our list of the best brokers for mutual funds .Decide which type of money market fund is right for you
Decide which type of money market fund is right for youThe type of investment account you’re using may also be relevant to your choice of money market mutual fund.
The type of investment account you’re using may also be relevant to your choice of money market mutual fund.An in-state municipal money market mutual fund can provide you with completely-tax-free income — a valuable benefit if you’re investing through a taxable brokerage account.
An in-state municipal money market mutual fund can provide you with completely-tax-free income — a valuable benefit if you’re investing through a taxable brokerage account.But if you’re investing through a tax-advantaged account such as an IRA or health savings account (HSA), then you don’t need to worry about taxes in the first place, and you may want to pick the highest-yielding fund available instead.
But if you’re investing through a tax-advantaged account such as an IRA or health savings account (HSA) , then you don’t need to worry about taxes in the first place, and you may want to pick the highest-yielding fund available instead.Check fees and expense ratios
Check fees and expense ratiosYield isn’t the only number you should look at when you’re shopping for a money market mutual fund.
Yield isn’t the only number you should look at when you’re shopping for a money market mutual fund.Mutual funds also have expense ratios, or annual percentage fees. Many also have one-time buying or selling fees. When evaluating funds, it’s good to subtract expense ratios from yields — and also consider other fees — to determine which fund is the best-paying.
Mutual funds also have expense ratios , or annual percentage fees. Many also have one-time buying or selling fees . When evaluating funds, it’s good to subtract expense ratios from yields — and also consider other fees — to determine which fund is the best-paying.» Wondering how to get started? Check out our roundup of the best brokers for beginners.
» Wondering how to get started? » Wondering how to get started? Check out our roundup of the best brokers for beginners .Neither the author nor editor held positions in the aforementioned investments at the time of publication.
Neither the author nor editor held positions in the aforementioned investments at the time of publication. Neither the author nor editor held positions in the aforementioned investments at the time of publication. About the author Sam Taube Sam Taube Sam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree in 2016. See full bio.Helpful resources
Helpful resources Index Funds vs. Mutual Funds: The Differences That Matter Best Mutual Funds for May and How to Invest The Best ETFs and How to Start Investing 14 Best-Performing and Affordable ESG ETFs for 2026 More like this Investment Basics Investing How to Invest in Stocks Learn how to invest in stocks, including how to select a brokerage account and research stock market investments. 2 By Chris Davis, Sam Taube Investment Calculator Use our free investment return calculator to estimate how your money can grow. Enter your planned contributions, timeline, rate of return and compounding frequency to get started. Chris Davis What Is a Brokerage Account? Where and How to Open One Opening a brokerage account is the first step to investing. You can open one in as little as 15 minutes, but you'll need to fund it and select investments to start building out your portfolio. 2 By Arielle O'Shea, Pamela de la Fuente Best Investments: Where to Invest in 2026 Wondering where to invest your money this year? High-yield savings accounts, CDs, bonds, funds and stocks are all considered among the best investments available. Learn more about the risks, potential returns and how to get started. 2 By Chris Davis, Alieza Durana Best Brokers for Beginner Investors: Top Picks for 2026 We spent hours analyzing the best brokers for beginners to find ones that offer low costs, helpful educational content and a broad investment selection. Our testers also looked for trading platforms that are easy to navigate. 2 By Alana Benson, Bella Avila How to Invest in Stocks Learn how to invest in stocks, including how to select a brokerage account and research stock market investments. 2 By Chris Davis, Sam Taube Investment Calculator Use our free investment return calculator to estimate how your money can grow. Enter your planned contributions, timeline, rate of return and compounding frequency to get started. Chris Davis What Is a Brokerage Account? Where and How to Open One Opening a brokerage account is the first step to investing. You can open one in as little as 15 minutes, but you'll need to fund it and select investments to start building out your portfolio. 2 By Arielle O'Shea, Pamela de la Fuente Best Investments: Where to Invest in 2026 Wondering where to invest your money this year? High-yield savings accounts, CDs, bonds, funds and stocks are all considered among the best investments available. Learn more about the risks, potential returns and how to get started. 2 By Chris Davis, Alieza Durana Best Brokers for Beginner Investors: Top Picks for 2026 We spent hours analyzing the best brokers for beginners to find ones that offer low costs, helpful educational content and a broad investment selection. Our testers also looked for trading platforms that are easy to navigate. 2 By Alana Benson, Bella Avila How to Invest in Stocks Learn how to invest in stocks, including how to select a brokerage account and research stock market investments. 2 By Chris Davis, Sam Taube Investment Calculator Use our free investment return calculator to estimate how your money can grow. Enter your planned contributions, timeline, rate of return and compounding frequency to get started. Chris Davis What Is a Brokerage Account? Where and How to Open One Opening a brokerage account is the first step to investing. You can open one in as little as 15 minutes, but you'll need to fund it and select investments to start building out your portfolio. 2 By Arielle O'Shea, Pamela de la Fuente Best Investments: Where to Invest in 2026 Wondering where to invest your money this year? High-yield savings accounts, CDs, bonds, funds and stocks are all considered among the best investments available. Learn more about the risks, potential returns and how to get started. 2 By Chris Davis, Alieza Durana