Money market funds

Money market funds are a low-risk, short-term savings alternative that have the potential to earn more than traditional savings accounts while providing easy access to your cash.

4 benefits of money market funds

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Stability & safety

While not insured by the FDIC, the funds are required by federal regulations to invest in short-maturity, low-risk investments, making them less prone to market fluctuations than many other types of investments.

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Liquidity

Easily retrieve funds from a money market mutual fund to get cash, pay a bill, or make another investment in your account.

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Competitive yields

We are focused on helping investors achieve their financial goals while taking a conservative approach toward managing risk.

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Potential tax advantages

Money market yields are variable and can be a potential source of tax-efficient income for accounts exposed to taxes.

What is a money market fund?

Money market funds are fixed income mutual funds that invest in debt securities characterized by short maturities and minimal credit risk. These securities are issued by government entities or companies who borrow money and repay principal and interest to investors within a short period of time.

Some investors use money market funds to save for short-term goals or emergencies, or as a low-volatility allocation in their portfolio of stocks and bonds. Some investors choose a government money market fund as the core position in a brokerage account to receive or make recurring payments, or hold money before moving to another investment.

Types of money market funds

Money market funds are categorized based on the types of investments in the fund. Fidelity offers government, prime, and municipal (or tax-exempt) money market funds, and is an industry leader, managing over $650 billion in total money market assets.1

Government: Fidelity Government Money Market Fund (SPAXX)*

This fund generally invests at least 99.5% of the fund's total assets in cash, US government securities and repurchase agreements. If used as a core position in a brokerage account, the fund offers a convenient way to earn a return on money before investing further, or while saving. 

As of month-end October 2019, the 7-day yield of SPAXX on an annualized basis net of fund expenses was 16.6X higher than the average savings account rate.2

Prime: Fidelity Money Market Fund (SPRXX)

Invests the fund's assets primarily in US dollar-denominated money market securities of domestic and foreign issuers, US government securities, and repurchase agreements. Prime MMMFs have historically offered higher yields than government MMMFs.

As of month-end October 2019, the 7-day yield of SPRXX on an annualized basis net of fund expenses was 18.2X higher than the average savings account rate.2

Municipal: Fidelity Municipal Money Market Fund (FTEXX)

Seeks as high a level of interest income exempt from federal income tax as is consistent with liquidity and stability of principal. This fund normally invests at least 80% of assets in municipal securities whose interest is exempt from federal income tax.

As of month-end October 2019, the 7-day yield of FTEXX on an annualized basis net of fund expenses was 9.8X higher than the average savings account rate.2

Next steps

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