Your brokerage’s money market fund is probably paying you less than a savings account right now. That sentence should feel wrong. It isn’t.

Fidelity’s government money market fund yields 3.36%. Their prime fund tops out at 3.57%. Goldman Sachs money market funds sit at 3.54-3.55%. Meanwhile, the top high-yield savings accounts — Varo, Axos, Newtek — are paying 4.20-5.00% APY.

That’s a gap of 63 to 164 basis points. On $50,000 in cash, you’re giving up $315 to $820 per year by leaving money in a brokerage money market fund instead of a HYSA. Not because money markets are bad products. Because the rate math has quietly flipped, and most people haven’t noticed.

I checked my own Fidelity account last week. The Government Money Market Fund (SPAXX) was earning 3.41%. My Wealthfront cash account? 4.20%. Same FDIC-insured cash. Same liquidity. A 79-basis-point difference I’d been ignoring for months.

Quick Verdict: Money Market Funds vs. HYSAs (April 2026)

Factor	Money Market Funds	High-Yield Savings Accounts
Top yield	3.36-3.57%	4.20-5.00% APY
Average yield	0.43% (money market account avg)	0.39% (savings avg) — top accounts far higher
FDIC insured	No (SEC-regulated, $1 NAV target)	Yes, up to $250K
Liquidity	Same-day in brokerage	1-3 day ACH transfer
Tax treatment	Federal + state (unless govt fund)	Federal + state
Best for	Cash between trades, brokerage sweep	Emergency fund, short-term savings
Who wins right now	—	HYSAs, by a wide margin

The short version: If you’re holding cash you don’t plan to invest in the next few days, a HYSA pays more than any major money market fund right now. The April 29 FOMC meeting could change the math, but probably won’t.

Why the Gap Exists (and Why Nobody Talks About It)

Money market fund yields track the federal funds rate closely. The Fed’s target range is 3.50-3.75% as of April 2026. After fund expenses (typically 0.10-0.40%), most money market funds land in the 3.30-3.57% range. That’s mechanical. The fund buys short-term government debt and commercial paper, takes its fee, and passes the rest to you.

HYSAs don’t have to track anything. Online banks set their savings rates based on competition, not the fed funds rate directly. They use high APYs as their customer acquisition tool. It’s their version of a Super Bowl ad. So when the Fed cuts rates, these banks hold their HYSA rates higher for longer, eating into their own margins to keep attracting deposits.

The result: money market funds responded to the Fed’s 175 basis points of cuts from the 2024-2025 peak. HYSAs haven’t — at least not at the competitive online banks. That divergence is the gap you’re looking at.

The Rates Right Now

Money Market Funds (As of April 2026)

Fund	Ticker	7-Day Yield	Expense Ratio
Fidelity Government MM	SPAXX	3.41%	0.42%
Fidelity Money Market	SPRXX	3.57%	0.42%
Fidelity Treasury Only	FDLXX	3.36%	0.42%
Goldman Sachs Investor MM	FTIXX	3.55%	0.44%
Goldman Sachs Government	FGTXX	3.54%	0.44%
Schwab Value Advantage	SWVXX	~3.45%	0.34%
Vanguard Federal MM	VMFXX	~3.50%	0.11%

Vanguard’s lower expense ratio helps, but even VMFXX at 3.50% trails the top HYSAs by 70+ basis points.

High-Yield Savings Accounts (As of April 2026)

Account	APY	Minimum	Catch
Varo	5.00%	$0	Requires direct deposit + 5 monthly purchases; 5% only on first $5K
Newtek Bank	4.20%	$0	Online-only
Axos Bank	4.21%	$0	None
Wealthfront Cash	4.20%	$1	Brokerage cash account (FDIC via partner banks)
Marcus (Goldman Sachs)	~4.00%	$0	Rate drifting down

The irony with Goldman Sachs is hard to ignore. Their money market funds yield 3.54-3.55%. Their consumer savings account (Marcus) pays ~4.00%. Two products from the same bank, and the “boring” savings account pays more.

The Brokerage Sweep Problem

Here’s what’s actually costing people money: default brokerage sweep accounts.

When you sell a stock or receive a dividend in your Fidelity, Schwab, or Vanguard account, the cash lands in a sweep vehicle. At Fidelity, that’s usually SPAXX (3.41%). At Schwab, it might be their bank sweep program, which pays significantly less. Some brokerage sweeps pay under 0.50%.

The average money market account APY across all institutions is 0.43%, according to the FDIC. That’s the rate millions of people earn on uninvested cash in their brokerage accounts because they never changed the default.

Let me put that in dollar terms:

Cash Balance	Brokerage Sweep (0.43%)	Top MM Fund (3.57%)	Top HYSA (4.21%)
$10,000	$43	$357	$421
$25,000	$107.50	$892.50	$1,052.50
$50,000	$215	$1,785	$2,105
$100,000	$430	$3,570	$4,210

At $50,000 — a not-unusual amount to have sitting in a brokerage between investments — the difference between the default sweep and a HYSA is $1,890 per year. That’s a car payment. Disappearing because of a default setting.

When Money Market Funds Still Make Sense

I’m not saying dump your money market fund entirely. There are real situations where it’s the right tool.

Cash you’re about to invest. If you have $20,000 in your brokerage waiting to buy the next dip or fund a position, a money market fund gives you same-day settlement. Moving that money to a HYSA and back takes 2-4 business days. Missing a buy window because your cash was in transit costs more than 80 basis points of yield.

Margin collateral. Money market fund shares count as collateral for margin accounts. HYSA balances don’t. If you trade on margin (and understand the risks), your money market fund is doing more than earning yield.

Amounts under $5,000. The yield difference on small balances is minimal. On $5,000, the gap between 3.50% and 4.20% is $35 per year. If the convenience of having everything in one brokerage account is worth more than $35 to you, that’s a reasonable call.

Tax-loss harvesting cash reserves. If you’re keeping cash available to rebalance after tax-loss harvesting, the speed advantage of brokerage cash matters.

When a HYSA Wins Outright

Emergency funds. This isn’t money you’re investing. It’s money you’re saving. Park it where it earns the most. A HYSA at 4.20% APY beats every money market fund right now, and the FDIC insurance means your principal is guaranteed.

Short-term savings goals. Down payment in 6-12 months? New car fund? Travel savings? These dollars don’t need to be in a brokerage. They need to be earning the best risk-free rate available, and that’s a HYSA.

Cash you’ve been “meaning to invest” for months. We’ve all been there. Money sitting in a brokerage sweep at 0.43% because you can’t decide between SCHD and JEPI, or you’re waiting to see what the tariff situation does to dividends. If you’ve been sitting on cash for more than 30 days with no deployment plan, move it to a HYSA while you decide. You’ll earn more, and the 2-3 day transfer back is a negligible friction.

What About T-Bills?

I covered this in detail in the T-bills vs CDs comparison, but the quick version: 4-week to 13-week T-bills are yielding 4.20-4.28% right now and the interest is exempt from state taxes.

If you live in California, New York, or another high-tax state, T-bills beat both money market funds AND HYSAs on an after-tax basis. A 4.20% T-bill in California is equivalent to a 4.63% CD or HYSA. That rate doesn’t exist anywhere.

The tradeoff: T-bills lock your money for the term (4-52 weeks), and you need a TreasuryDirect account or a brokerage to buy them. Not as liquid as either a money market fund or HYSA. But for cash you won’t need for a month? T-bills are the best risk-free yield in the game right now. Here’s the pecking order for a California resident:

1. T-bills — 4.20% (state-tax-free) = 4.63% equivalent
2. HYSA — 4.20% (fully taxable) = 3.81% after 9.3% state tax
3. Money market fund — 3.50% (fully taxable) = 3.17% after state tax

Different story in Texas or Florida where there’s no state tax. There the order is simply: HYSA > money market fund.

The April 29 FOMC Meeting

The Fed meets April 29. Markets are pricing in a hold at 3.50-3.75%, with the CME FedWatch tool showing over 90% probability of no change. The tariff uncertainty has complicated the Fed’s calculus — inflation data has been sticky, and the new tariff regime adds upward price pressure that makes the Fed less likely to cut.

What this means for you:

Money market fund yields stay flat. If the Fed holds, SPAXX stays around 3.41%. No change.

HYSA rates stay elevated. The competitive online banks have no reason to cut if the Fed doesn’t cut. Expect 4.00-4.20% APYs to persist through at least Q2.

The gap persists. The HYSA-over-money-market advantage isn’t going away in April. If anything, the longer the Fed holds without cutting, the longer online banks can justify keeping HYSA rates above money market yields.

The earliest realistic rate cut is September, and even that depends on inflation cooperating. If the tariff impact pushes prices higher, the Fed could hold through December. That’s 8 more months of this gap.

How to Move Cash From Your Brokerage to a HYSA

If you’ve got significant cash sitting in a brokerage money market fund earning 3.4% and you don’t need it for near-term trades:

1. Figure out how much cash you can move. Keep enough in the brokerage for upcoming trades, margin requirements, or planned investments. Everything else is a candidate.
2. Open a HYSA if you don’t have one. Wealthfront, Axos, or Marcus — pick your preference. I compared them in the March HYSA roundup.
3. Initiate an ACH transfer. Most HYSAs let you pull from an external account. Link your brokerage, transfer the cash. Takes 2-4 business days.
4. Set a calendar reminder for the I Bond purchase window before May 1 if you’re also evaluating that option.

That’s it. You’re now earning 4.20% instead of 3.41% on the same dollars, with FDIC insurance to boot.

What Should You Do With $50,000 in Cash Right Now?

Here’s how I’d allocate $50K in liquid cash as of April 2026, assuming you live in a state with income tax and have a fully funded emergency reserve:

Bucket	Amount	Vehicle	Yield	Purpose
Trading cash	$5,000	Brokerage MM fund	3.41%	Ready for next-day deployment
Emergency fund	$15,000	HYSA (Wealthfront)	4.20%	Instant access, FDIC insured
Short-term savings	$15,000	4-week T-bill ladder	4.22%	State-tax-free, rolls monthly
Deploy in 3-6 months	$15,000	13-week T-bills or 6-month CD	4.20-4.28%	Locked rate, planned deployment

Blended yield: ~4.13%. That’s 3.7x what the same money would earn in a default brokerage sweep. On $50,000, the difference is roughly $1,850 per year.

Is it retirement money? No. But it’s real money earned by moving some numbers between accounts on a Thursday afternoon. And it sets a floor — any dividend ETF or side project you’re considering should beat 4.13% risk-free, or you’re taking risk for nothing.

The Bottom Line

Money market funds aren’t broken. They’re doing exactly what they should — tracking the fed funds rate minus expenses. The problem is that most people assume “money market” means “best cash rate,” and in April 2026, it doesn’t.

Top HYSAs pay 4.20-5.00%. Top money market funds pay 3.36-3.57%. The gap is real, and on any meaningful cash balance, it adds up to hundreds of dollars per year.

Check your brokerage sweep rate today. If it’s under 4%, and you’re holding cash you won’t need for the next week, you’re losing money to inertia. A HYSA takes 15 minutes to open. T-bills take 20 minutes at TreasuryDirect. Both pay more than your money market fund. Both are essentially risk-free.

The Fed meets April 29. Nothing is expected to change. Which means the gap between where your cash is and where it should be stays open for at least another month. Move it.

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Rates current as of April 3, 2026 and subject to change. Money market fund yields are 7-day yields; HYSA rates are APYs as published by each institution. This is not financial advice — consult a financial professional for your specific situation.