Top 10 Vanguard Money Market Funds for Smart Short-Term Investing in 2025

Explore the best Vanguard money market funds to park your cash, earn competitive yields, and maintain liquidity—all with low risk

When it comes to preserving capital while earning a modest return, money market funds are a solid choice—especially in uncertain or volatile markets. Vanguard, one of the most trusted investment firms in the world, offers a suite of money market funds designed for conservative investors looking for stability, liquidity, and competitive yields.

Whether you’re building an emergency fund, waiting to reinvest during market downturns, or simply seeking better returns than a standard savings account, Vanguard’s lineup of money market funds provides compelling options.

In this guide, we’ll highlight the 10 best Vanguard money market funds for 2025, considering factors like yield, expense ratios, risk level, and investment objectives.

1. Vanguard Federal Money Market Fund (VMFXX)

Best for: Conservative investors seeking federal government backing

VMFXX is Vanguard’s default settlement fund and one of its most popular options. It invests primarily in short-term U.S. government securities, making it extremely low risk. With a current yield above many savings accounts and an ultra-low expense ratio of just 0.11%, it’s a go-to for safety and liquidity.

• Expense Ratio: 0.11%
• 7-Day SEC Yield (as of May 2025): Approx. 5.00%
• Minimum Investment: $3,000

2. Vanguard Treasury Money Market Fund (VUSXX)

Best for: Investors prioritizing treasury-only holdings

VUSXX offers an additional layer of security by investing solely in U.S. Treasury bills and repurchase agreements backed by Treasuries. It is exempt from state and local taxes, making it ideal for high-income investors in high-tax states.

• Expense Ratio: 0.09%
• 7-Day SEC Yield: Approx. 4.95%
• Minimum Investment: $50,000

3. Vanguard Prime Money Market Fund (VMMXX)

Best for: Investors seeking a higher yield with slightly more risk

VMMXX invests in high-quality commercial paper, certificates of deposit, and other short-term instruments. Although not as conservative as federal or treasury funds, it often offers a better yield.

• Expense Ratio: 0.16%
• 7-Day SEC Yield: Approx. 5.15%
• Minimum Investment: $3,000

4. Vanguard Municipal Money Market Fund (VMSXX)

Best for: Tax-conscious investors in higher brackets

This fund invests in short-term, high-quality municipal securities, and its income is generally exempt from federal income taxes. A great fit for investors seeking tax-equivalent yield rather than just raw returns.

• Expense Ratio: 0.16%
• 7-Day SEC Yield (Tax-Exempt): Approx. 3.25%
• Minimum Investment: $3,000

5. Vanguard California Municipal Money Market Fund (VCTXX)

Best for: California residents seeking double tax exemption

Exempt from both federal and California state taxes, VCTXX is tailored for California residents in higher tax brackets. It invests in short-term California municipal securities.

• Expense Ratio: 0.16%
• 7-Day SEC Yield (Tax-Exempt): Approx. 3.10%
• Minimum Investment: $3,000

6. Vanguard New York Municipal Money Market Fund (VYFXX)

Best for: New York residents optimizing after-tax income

Like its California counterpart, VYFXX offers federal and New York state tax exemption, making it ideal for NY-based investors with significant taxable income.

• Expense Ratio: 0.16%
• 7-Day SEC Yield (Tax-Exempt): Approx. 3.00%
• Minimum Investment: $3,000

7. Vanguard Cash Reserves Federal Money Market Fund Admiral Shares (VMRXX)

Best for: Institutional and high-net-worth investors

VMRXX offers similar holdings to VMFXX but with a lower expense ratio available through Admiral Shares. You’ll need a higher minimum investment, but the return may justify it.

• Expense Ratio: 0.10%
• 7-Day SEC Yield: Approx. 5.05%
• Minimum Investment: $5,000,000

8. Vanguard Institutional Money Market Fund (VMPXX)

Best for: Institutional clients seeking daily liquidity

This fund is tailored for corporations and large institutions needing immediate access to cash with minimal risk. It’s not typically available to retail investors, but financial advisors may provide access through managed accounts.

• Expense Ratio: 0.10%
• 7-Day SEC Yield: Approx. 5.20%
• Minimum Investment: $5,000,000

9. Vanguard State-Specific Municipal Money Market Funds (Various)

Best for: Residents in eligible states looking to minimize tax liability

In addition to California and New York, Vanguard occasionally offers state-specific municipal funds for other large states, depending on demand and tax laws.

• Expense Ratio: ~0.16%
• 7-Day SEC Yield (Varies): Tax-equivalent yield depends on location
• Minimum Investment: $3,000

10. Vanguard ESG Money Market Fund (Upcoming/Future Option)

Best for: ESG-conscious investors (monitor for future availability)

As of early 2025, Vanguard has indicated interest in launching ESG-compliant money market products. Though not yet available, these funds may appeal to investors who prioritize sustainable, ethical investing without sacrificing safety.

Conclusion

Vanguard money market funds offer reliable options for conservative investors seeking liquidity, safety, and tax advantages. Whether you’re an individual looking to earn a better return on your cash reserves or an institutional investor managing operational capital, there’s likely a Vanguard money market fund that fits your needs.

Be sure to match your choice with your financial goals, risk tolerance, and tax situation. And remember—while yields fluctuate with interest rates, the core value of these funds lies in their stability and accessibility.

Ready to invest smart and stay liquid? Start exploring Vanguard’s money market funds today, or speak to your financial advisor to tailor your approach.