High yields have investors piling into money market funds. Here's what you need to know

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Retail investors have been pouring cash into money market funds. Here's what names have outperformed and what experts say to look for when choosing a fund.

High yields and a volatile stock market have investors piling into money market mutual funds. Holdings were near a record high of $4.8 trillion in the week ended Jan. 18, according to the Investment Company Institute . That's down from the high of $4.814 trillion in total net assets the week ended Jan. 4 and above the prior peak of $4.79 trillion reached during the Covid lockdown of May 2020. Yet for retail funds, inflows are still climbing — the week ended Jan. 18 saw a $4.

Those who are retired should hold a larger cash savings, around one to two years' worth of expenses, she said. One thing to keep in mind is that a money market fund is not FDIC-insured, while a money market account at a bank is insured. But funds typically earn more interest, and both are liquid, meaning they're easy to get into and out of. Be aware of fees You will also have to be aware of fees — at the same time yields are ticking up, so are funds' expenses.

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