Are money market funds safe?
Rule 2a-7's actual requirements, the 2023 reforms, and the two times a fund broke the buck — with this month's liquidity figures.
Data: June 2026 month-end SEC filings
All figures are from the June 2026 month-end Form N-MFP filings (report date ) — money-market funds must file within five business days of month-end. Regulatory data, not live quotes.
- Money-market funds are not FDIC-insured. SIPC protects brokerage custody of your shares, not the fund's value.
- Since the SEC's 2023 amendments to rule 2a-7 (adopted July 2023, phased in through 2024), funds must hold at least 25% of assets in daily liquid assets and 50% in weekly liquid assets, and redemption gates are no longer permitted.
- Across the June 2026 filings, the median government fund held 73.8% of assets in daily liquid assets and 84.2% in weekly liquid assets — above the 25%/50% SEC minimums.
- Two money-market funds have "broken the buck" (repriced below $1.00): Community Bankers U.S. Government Fund in 1994 and the Reserve Primary Fund in September 2008 ($0.97).
What rule 2a-7 requires
Every US money-market fund operates under SEC rule 2a-7, which limits portfolio risk on four axes: maturity (weighted average maturity ≤ 60 days, weighted average life ≤ 120 days), credit quality (minimal credit risk, mostly first-tier securities), diversification (issuer concentration limits), and liquidity (≥ 25% daily and ≥ 50% weekly liquid assets since the 2023 amendments — up from 10%/30% originally). Each fund's actual WAM, WAL, and liquid-asset percentages are on its page here (e.g. SPAXX, VMFXX) and in the CSV downloads.
Stable $1.00 vs floating NAV
Government funds and retail prime/tax-exempt funds may price shares at a stable $1.00 using amortized cost. Institutional prime and institutional tax-exempt funds have priced to four decimals (a floating NAV) since October 2016. On Form N-MFP every fund also reports market-value NAV to the SEC monthly, which is where this site's data comes from.
The 2023 reforms, in brief
Adopted July 2023 after the March 2020 stress (when prime and tax-exempt funds saw heavy outflows and the Fed opened the Money Market Mutual Fund Liquidity Facility), the amendments: raised daily/weekly liquid-asset minimums to 25%/50%; eliminated redemption gates and the automatic link between fees and liquidity levels; and added the mandatory liquidity fee for institutional prime/tax-exempt funds described in the FAQ below. Sources: SEC press release 2023-129 and the SEC's investor.gov explainer.
FAQ
Are money market funds FDIC insured?
No. A money market fund is a mutual fund, not a bank deposit — FDIC insurance never applies. SIPC protection at a brokerage covers custody of your shares if the broker fails, but does not protect against the fund's value falling.
Can a money market fund lose money?
Yes, though it is rare. Stable-NAV funds aim to hold $1.00 per share; two funds have repriced below $1.00 in the industry's history — Community Bankers U.S. Government Fund (1994) and the Reserve Primary Fund (September 2008, $0.97). Institutional prime and tax-exempt funds have floated their share price to four decimals since the SEC's 2016 reforms.
What is a liquidity fee on a money market fund?
Under the SEC's 2023 rule 2a-7 amendments, an institutional prime or institutional tax-exempt fund must charge a liquidity fee when its daily net redemptions exceed 5% of assets, unless the estimated liquidity cost is under one basis point; non-government funds may also charge a discretionary fee when the board deems it in the fund's interest. Government funds (most retail sweep funds) are not subject to these fees. The 2023 amendments also removed the redemption gates allowed since 2014.
What is the difference between government and prime money market funds?
A government fund must hold at least 99.5% of assets in cash, US government securities, or repos collateralized by them; a prime fund can also hold bank and corporate short-term debt, which typically yields slightly more with slightly more credit risk. Tax-exempt funds hold municipal paper whose income is generally federal-tax-exempt.
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