Best Money Market ETFs
Cash-equivalent yield with daily liquidity
ETFs tracked
8
Avg TER
0.23%
Median Yield
3.79%
Money market ETFs hold the shortest, safest debt instruments available — Treasury bills maturing in days to weeks, repo agreements, and high-grade commercial paper. Their job is to replace idle cash in a brokerage account with a yield that tracks the Fed funds rate, without meaningful principal risk.
The defining feature is yield responsiveness. When the Fed hikes, Treasury bills auctioned the next week pay more, the ETF's holdings roll into that new paper within days, and the distribution yield follows with a lag of roughly 30 days. SGOV's yield climbed from under 0.5% in early 2022 to above 5% by mid-2023 as the Fed tightened. It has trended back down through 2024–2025 as cuts unfolded. This is the opposite of a long-duration bond fund, which locks in a yield for years.
Cost matters enormously here. When gross yields are 4–5%, a 0.09% expense ratio versus 0.36% is the difference between keeping 98% of the yield and keeping 92%. The cheapest broad money market ETFs charge 0.03–0.09%. Over a decade on $100,000 held continuously, that fee spread compounds to a few thousand dollars.
The main alternatives are high-yield savings accounts (FDIC-insured, tracked yield, instant settlement) and money market mutual funds (per-share NAV held at $1, stable-value structure, sold through brokers rather than exchanges). Money market ETFs sit between them: intraday trading, Treasury-backed, not FDIC-insured but structurally very safe.
Who this is for
- Investors parking cash between allocations for days to months
- Brokerage account holders tired of near-zero sweep yields
- Not suitable for multi-year cash needs that would be better served by CDs or longer-duration bonds
Top 8 ETFs
Browse all 8 money market ETFs
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Open screenerFrequently asked questions
- What is a money market ETF?
- A money market ETF holds short-term, low-risk debt — typically Treasury bills, government repo, and high-grade commercial paper. It pays distributions tracking short-term interest rates and has minimal principal risk. Unlike money market mutual funds, ETFs trade on exchanges and do not target a $1 stable NAV.
- Is a money market ETF better than a high-yield savings account?
- It depends on the environment and your needs. Treasury ETFs like SGOV have historically matched or slightly exceeded HYSA rates, with US state-tax exemption on Treasury interest. HYSAs are FDIC-insured up to $250,000 and settle same-day via bank transfer. Many investors use both — HYSA for emergency cash, ETF for investment-account cash.
- Can I lose money in a money market ETF?
- The principal risk of ultra-short Treasury ETFs is very close to zero — the largest month-over-month drawdown on funds like BIL has been less than 0.1%. Money market ETFs holding commercial paper (prime funds) carry small credit spread risk and have briefly dislocated during crises like March 2020.
- How quickly does the yield change when the Fed moves rates?
- Yields on money market ETFs typically reflect new Fed policy within 30 days, because the underlying Treasury bills mature and roll into new paper every few weeks. This is the opposite of long-duration bond ETFs, which lock in yields for years.
Related Asset Class
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