Retail Money Funds

Money funds can be purchased directly from mutual fund companies or from brokerages firms. Typically these funds hold short-term debt obligations and cash instruments with weighted average maturity of 90 days or less. Yields vary based on portfolio holdings and market conditions. Historically money funds have been able to maintain a $1 net asset value by investing in highly-rated or government-backed financial instruments and prevent loss of principal, but investors have no guarantees or federal insurance against losses.

The following funds are larger-sized in assets with expense ratios of less than 0.75%. The yield quoted is the 7-day effective yield net of expenses which includes the compounding effect of dividends and is a better direct comparision to the annual percentage yields (APYs) quoted by banks. Yields are not updated daily. Check with the mutual fund company directly for the most current yield.

Vanguard Prime MMF 0.53%, minimum $3,000

Ivy Money Market Fund 0.95%, minimum $1,000

American Century Prime Money Market Fund 0.81%, minimum $2,500

Touchstone Money Market Fund 0.99%, minimum $2,500

Western Asset Money Market Fund 0.50%, minimum $1,000

Merrill Lynch CMA Money Fund 0.76%, minimum $2,000

American Century Premium Money Market Fund 0.89%, minimum $2,500

Fidelity Money Market Fund 0.85%, minimum $25,000

Fidelity Select Money Market Portfolio 0.85%, minimum $2,500

Thrivent Money Market Fund 0.71%, minimum $1,500

TIAA-CREF Money Market Fund 0.44%, minimum $2,500

Fidelity Cash Reserves 0.74%, minimum $2,500

Putnam Money Market Fund 0.81%, minimum $500

Calvert Social Investment Money Market Fund 0.89%, minimum $1,000

Dreyfus BASIC Money Market Fund 0.41%, minimum $25,000

Oppenheimer Money Market Fund 0.82%, minimum $1,000

Dreyfus Liquid Assets Money Market Fund 0.41%, minimum $2,500

Schwab Value Advantage Money Fund 0.41%, minimum $25,000

AARP Money Market Fund 0.40%, minimum $100

PayPal Money Market Fund 0.42%, minimum $1

RBB Money Market Fund 0.05%, minimum $1

UPDATE: (March 13, 2009): Several mutul fund companies have closed their Treasury-only money funds to new investors.

MONEY FUND INSURANCE

Fidelity Investments and Vanguard Group joined the U.S. Treasury's emergency insurance program for money-market mutual funds which protects investors from losses on money deposited before September 19, 2008. The government program designed to shore up confidence in the ability of mutual fund money market funds to maintain a $1 net asset value has now reached over a 97% participation rate in the industry. Most fund companies have posted on their website if they are participating in the Treasury Department guaranty program.