Quick answer: which one is FDIC insured?
Bank money market accounts (MMA): yes. A money market account at an FDIC-member bank is a deposit account, insured up to $250,000 per depositor, per bank, per ownership category. Business money market accounts are insured the same way, separately from the owners' personal deposits.
Money market funds (MMF): no. A money market fund is a brokerage investment, not a bank deposit, so it is never FDIC insured. It is covered by SIPC against the broker failing, not against the fund losing value.
The 2008 "breaking the buck" event
On September 16, 2008, the Reserve Primary Fund -- one of the largest and oldest money market funds -- "broke the buck," meaning its NAV dropped from $1.00 to $0.97 per share. The fund held $785 million in Lehman Brothers commercial paper, which became worthless overnight after Lehman's bankruptcy.
The US Treasury temporarily guaranteed all money market fund balances to prevent a broader run. The SEC subsequently tightened MMF rules: stricter liquidity requirements (at least 10% daily, 30% weekly liquid assets), caps on longer-dated holdings, and "gates" and "fees" for institutional funds. As of 2026, retail MMFs remain structurally safer than in 2008, but the FDIC guarantee does not apply.
Common retail money market funds (reference)
VMRXX / VUSXX
Vanguard
Federal + Government. State tax advantage on Treasury portion.
FZDXX / SPAXX
Fidelity
FZDXX: Prime. SPAXX: Government. Check yield at fidelity.com.
SWVXX / SNVXX
Schwab
SWVXX: Prime. SNVXX: Government. See prospectus for holdings.
These are informational references only. Not a recommendation. Verify current yields at each brokerage.
Are bank money market accounts FDIC insured?⌄
Yes. A money market account (MMA) opened at an FDIC-member bank is a deposit account, insured by the FDIC up to $250,000 per depositor, per insured bank, per ownership category -- the same coverage that applies to a savings account or CD. At a credit union, a money market account is covered the same way by the NCUA Share Insurance Fund up to $250,000. This is different from a money market fund, which is an investment product and is not FDIC insured.
Are business money market accounts FDIC insured?⌄
Yes. A money market account held by a corporation, partnership, LLC, or unincorporated association is FDIC insured up to $250,000, and it is insured separately from the owners', partners', or members' personal deposits at the same bank, provided the entity is engaged in an independent activity (a legitimate business purpose, not opened solely to increase deposit insurance coverage). All deposits the same business holds at one bank are added together toward that single $250,000 limit; the number of owners or account signers does not change the coverage.
Are any money market funds FDIC insured?⌄
No. Money market funds (money market mutual funds) are investment products held at a brokerage, not bank deposits, so none of them are FDIC insured -- including government and Treasury funds such as VUSXX, VMFXX, SPAXX, and SNVXX. They are covered by SIPC up to $500,000 if the brokerage fails, but SIPC does not protect against the fund losing value. Only a money market account at an FDIC-member bank carries the $250,000 FDIC guarantee.
Can a money market fund lose money?⌄
Very rarely, but yes. Money market funds aim to maintain a stable $1.00 net asset value (NAV) per share. The Reserve Primary Fund 'broke the buck' in September 2008, dropping to $0.97, after holding Lehman Brothers commercial paper. This triggered the 2008 money market fund crisis. The Treasury temporarily guaranteed MMF values during the crisis. Since then, the SEC has tightened rules on MMF holdings (higher liquidity requirements, limits on risky holdings). As of 2026, 'breaking the buck' remains a non-zero risk, though extremely rare.
What is the difference between FDIC and SIPC?⌄
FDIC (Federal Deposit Insurance Corporation) insures deposits at FDIC-member banks -- checking, savings, money market accounts, CDs -- up to $250,000 per depositor per institution per ownership category. SIPC (Securities Investor Protection Corporation) protects brokerage account holders against broker failure (not investment losses). SIPC covers up to $500,000 ($250,000 in cash) if a SIPC-member broker goes bankrupt. SIPC does NOT protect against investment losses in money market funds.
Is a money market fund at Fidelity, Vanguard, or Schwab FDIC insured?⌄
No. VMRXX (Vanguard Cash Reserves Federal Money Market Fund), FZDXX (Fidelity Money Market Fund), and SWVXX (Schwab Value Advantage Money Market Fund) are investment funds, not FDIC-insured bank deposits. They are SIPC protected (against broker failure) but not against fund value loss. Government MMFs (VUSXX, VMFXX) hold US Treasury securities and are considered extremely low risk, but they are not backed by the FDIC guarantee.
Which money market fund has the highest yield right now?⌄
In June 2026, government money market funds are yielding approximately 3.5-3.9% (7-day SEC yield), broadly in line with the top MMA rates at banks. VMRXX and VUSXX at Vanguard, SPAXX at Fidelity, and SNVXX at Schwab are among the largest and most commonly held. Government MMFs that hold primarily US Treasury securities also carry state income tax exemption on the Treasury portion of their income -- an advantage for high-tax-state savers.
When should I use a money market fund instead of a money market account?⌄
Use a money market fund when: your cash is already in a brokerage account and you do not need bank-level check writing; when MMF yields are higher than MMA rates and the slightly higher risk is acceptable; or when you want state income tax exemption on Treasury-backed MMF interest. Use a money market account when: you need FDIC insurance certainty, want check-writing directly on the account, or the cash is for a near-term specific purpose (emergency fund, down payment).