5 Best Schwab Money Market Funds | Investing

The trend of falling interest rates seen in late 2025 has been put on pause this year.

At its March Federal Open Market Committee meeting, the Federal Reserve held the target federal funds range at 3.5% to 3.75%, citing economic uncertainty due to the Iran war and other factors, and risks to both sides of its dual mandate to support maximum employment and stable prices.

While the decision was widely anticipated by markets, one of its quieter effects shows up in the yields paid by money market funds, which are closely tied to short-term interest rates.

Money market funds invest in high-quality, short-term fixed-income securities and are generally grouped into three categories: government, prime and municipal.

Depending on the fund, holdings can include Treasury bills, repurchase agreements, commercial paper, promissory notes and short-term debt issued by state and local agencies.

When pooled into a fund structure, investors benefit from a stable $1 net asset value (NAV) per share in all but the most extreme market conditions, along with monthly interest distributions.

Those distributions are typically quoted using the seven-day SEC yield, which closely tracks prevailing short-term interest rates. When the Federal Reserve raises rates, money market fund yields rise while maintaining their low-risk profile. When rates fall, yields decline and the appeal fades.

With rates now on hold, investors earning relatively attractive low-risk yields from money market funds may be able to enjoy them a little longer.

Here are five of the best Charles Schwab money market funds to consider today:

SWVXX is often the first option investors see within Schwab’s money market fund lineup. It is categorized as a prime money market fund, which allows for the broadest range of eligible holdings. In addition to Treasury bills and repurchase agreements, prime funds can also hold corporate debt instruments such as commercial paper, promissory notes and certificates of deposit.

Currently, SWVXX pays a 3.5% seven-day SEC yield after accounting for its 0.34% net expense ratio. Investors with larger balances may notice a higher-yielding option in the form of “ultra” shares. These shares require a $1 million minimum investment but currently offer a 3.6% seven-day SEC yield. The higher yield is driven by lower fees, as the ultra share class carries a reduced 0.19% expense ratio.

“While all money market funds are generally considered low-risk, government money market funds are viewed as the most conservative option,” says Michael Ashley Schulman, partner at Cerity Partners. “These funds must keep at least 99.5% of their assets in government securities or related repurchase agreements.” They offer more safety than prime funds but lower yields.

For investors prioritizing safety, Schwab offers SNVXX, a government money market fund that holds U.S. Treasurys, agency securities and repurchase agreements. Compared with SWVXX, SNVXX’s seven-day SEC yield is slightly lower at 3.4%. However, in a severe credit stress scenario, SNVXX would be expected to hold up better due to its government-only mandate. The fund charges a 0.34% expense ratio.

“For our multifamily office clients, we want a money market fund that is as safe as possible from disruption from pandemics, wars, strikes and other global macro events,” Schulman says. “In these cases, we often look to Treasury money market funds, which are considered flight-to-safety instruments and don’t have the spread-widening risk of corporate or foreign instruments.”

SNSXX invests exclusively in U.S. Treasury securities, with no exposure to repurchase agreements. While repos are generally low-risk, they still introduce counterparty exposure and reliance on collateral valuation, which pure Treasury funds avoid. This makes SNSXX technically one of the safest money market options available. Despite that conservatism, SNSXX still delivers a 3.4% seven-day SEC yield with a 0.34% expense ratio.

“If tax efficiency is your primary focus, consider investing in a municipal money market fund, where most earnings are typically free from federal taxes,” Schulman says. “These funds generally invest in debt securities from local and state entities, like city hospitals, state colleges, power companies and transit systems, so in addition to receiving tax-advantaged income, you will be doing a social good.”

Schwab’s municipal offering, SWTXX, currently pays a 2.6% seven-day SEC yield. While that figure may appear modest at first glance, it is federally tax-exempt. On a tax-equivalent basis, this yield can compare favorably with taxable money market funds that advertise higher headline rates. As a result, SWTXX can be a sensible cash-management tool for investors in a higher income tax bracket. The fund has an expense ratio of 0.34%.

Income from most municipal money market funds is exempt from federal income taxes, but it is still subject to state taxes. For investors in high-tax states, that limits their usefulness. This is where a state-specific option like SWKXX comes in. The fund’s income is exempt from both federal taxes and, for California residents, state income tax, which is among the highest in the country.

SWKXX currently carries an expense ratio of 0.34% and pays a 2.2% seven-day SEC yield, the lowest in Schwab’s lineup. However, that figure understates its value for California residents. The more appropriate metric is the tax-equivalent yield, which adjusts for an investor’s federal and state tax bracket. For higher earners in California, SWKXX’s tax-free income can be comparable to or exceed the after-tax yield of taxable money market funds.