Banking
Money Market Fund
Quick definition
Mutual fund holding short-term, highly liquid debt (T-bills, commercial paper, repos) targeting stable $1/share value plus yield.
Money market funds are mutual funds investing in short-duration debt instruments. Typically yield close to the fed funds rate (mid-3 percent range as of 2026). Three types: government MMFs (treasuries + repos, safest), prime MMFs (commercial paper, slightly higher yield), municipal MMFs (tax-exempt). For startup treasury, government MMFs are standard: full liquidity and government-backed. Not FDIC-insured but SIPC-insured up to $500K at most brokerages.
Frequently asked questions
- What is Money Market Fund?
- Money market funds are mutual funds investing in short-duration debt instruments. Typically yield close to the fed funds rate (mid-3 percent range as of 2026). Three types: government MMFs (treasuries + repos, safest), prime MMFs (commercial paper, slightly higher yield), municipal MMFs (tax-exempt). For startup treasury, government MMFs are standard: full liquidity and government-backed. Not FDIC-insured but SIPC-insured up to $500K at most brokerages.
- Why is Money Market Fund important for startups?
- Money Market Fund is a banking concept that matters for startup founders because it shows up in fundraising readiness, financial decision-making, and operational discipline at the stage where mistakes are expensive to undo. Founders who understand it are better prepared for diligence, board meetings, and investor conversations.
- What category does Money Market Fund belong to?
- Money Market Fund is a Banking term in the StartupCFO finance glossary, alongside other banking concepts that founders, CFOs, and accountants use in startup operations and reporting.
- Where can I learn more about Money Market Fund?
- Beyond this definition, see the related banking terms below, or explore StartupCFO's insights and tools that put Money Market Fund in context. For specific situations, talk to a fractional CFO who can walk through your numbers.
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