Money market funds vs savings accounts vs T-bills
What actually differs - insurance, taxes, and how each rate is set - with this month's numbers.
Data: October 2026 month-end SEC filings
All figures are from the October 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.
- The median US government money-market fund 7-day net yield was 3.70% at October 2026 month-end (SEC N-MFP filings).
- The 3-month Treasury bill rate was 4.06% and the effective federal funds rate 3.88% as of and (FRED).
- Bank savings APY includes compounding; a fund's 7-day yield does not - at these levels the compounding difference is only a few basis points (see the explainer). This site does not track individual bank savings rates.
| Money market fund | High-yield savings | Treasury bills | |
|---|---|---|---|
| What it is | SEC-registered mutual fund holding short-term debt | Bank deposit account | Short-term US government debt you hold directly |
| Rate quoted as | 7-day SEC yield (no compounding) | APY (compounded) | Discount / investment yield |
| Rate moves | Daily, follows the Fed with a short lag | At the bank's discretion | Set at weekly auctions |
| Insurance | None - not FDIC-insured; SIPC covers brokerage custody, not fund value | FDIC up to $250,000 | None needed - direct US government obligation |
| State income tax | Depends on holdings (see tax-equivalent yield) | Fully taxable | Exempt from state income tax |
| Access | Brokerage account; T+0/T+1 settlement | Immediate to linked accounts | Sell before maturity or hold to maturity |
Where I bonds fit
Series I savings bonds are the other cash-like option many savers compare with these three. They pay a fixed rate plus an inflation rate that Treasury resets every May 1 and November 1, and they trade liquidity for that inflation link: an I bond cannot be cashed in its first 12 months, cashing it before 5 years gives up the last 3 months of interest, and purchases are limited to $10,000 per person per year through TreasuryDirect. Interest is exempt from state and local income tax. Money you may need within a year fits the table above better; the current I bond rate:
I bond rate from Savings Bond Check
FAQ
Is a money market fund better than a high-yield savings account?
They differ structurally, not just in rate. A money market fund is an SEC-registered fund whose 7-day yield follows the Fed with a short lag and is not FDIC-insured; a high-yield savings account is an FDIC-insured bank deposit whose APY the bank sets at its discretion. Fund yields are quoted without compounding (7-day SEC yield), savings accounts with compounding (APY). Which pays more changes over time and by bank; this site publishes the fund side: the median government-fund 7-day yield was 3.70% at October 2026 month-end.
Are I bonds better than a money market fund?
They do different jobs. An I bond's rate tracks inflation and its interest is exempt from state and local income tax, but it cannot be cashed for 12 months, cashing before 5 years costs the last 3 months of interest, and purchases are capped at $10,000 per person per year. A money market fund pays a floating yield and keeps cash available within a day or so. Source for the I bond rules: TreasuryDirect.
Are Treasury bills better than a money market fund?
T-bills are direct US government obligations - state-tax exempt, no fund expenses, but you manage maturities yourself and the rate is fixed at auction (4.06% for 3-month bills as of November 9, 2026). A government money market fund handles rolling short-term paper for you for an expense ratio, pays a floating 7-day yield (median 3.70% at October 2026 month-end), and keeps cash same-day accessible at a stable $1 share price.
Rates only - nothing here is a recommendation among these products. Fund figures are month-end SEC filings; market rates are FRED series with their own dates.