Highest modeled after-tax income
HYSAHigh-yield savings leads by about $35.5 in this entered yield and tax scenario.
SwitchWize decision guide
High-yield savings vs. money market fund: where should cash sit?
Compare after-tax income, but do not confuse a fund yield with a bank APY or a mutual fund with an insured deposit.
What you can expect
- No login required
- No credit pull
- Assumptions shown
- Sources included
Quick answer
A small yield edge rarely outweighs a protection or access mismatch. Use the fund only when its after-tax advantage and brokerage convenience fit the job of the cash.
If hysa
Best for emergency cash and users who prioritize eligible deposit insurance and direct access.
If money market fund
Best for brokerage cash when the after-tax yield edge survives fees and settlement timing.
If stay put
Reasonable when the current account is competitive and the switching gain is immaterial.
Key number to watch
The HYSA must average about 4.05% APY to match the entered fund yield after modeled fees and taxes.
Test your situation
See your result in dollars
Change any number below to match your situation. No login is required, and your entries stay in this browser.
$
Cash being compared.
months
Expected time in either option.
%
Editable savings APY.
%
A recent annualized yield, not a guaranteed APY.
High-yield savings leads by about $35.5 in this entered yield and tax scenario.
High-yield savings
$1,473
modeled after-tax interest
$1,338 vs. baseline
Money market fund
$1,438
modeled after-tax income
$1,303 vs. baseline
Current bank
$135
modeled after-tax interest
$0 vs. baseline
Try a scenario
Key number to watch
The HYSA must average about 4.05% APY to match the entered fund yield after modeled fees and taxes.
How certain: scenario dependent
Check these assumptions
- • A money market mutual fund is an investment and is not FDIC-insured; it can lose value even though such losses have historically been rare.
- • A 7-day yield is an annualized recent-yield measure, not a guaranteed APY. This model holds the entered average yield as a scenario.
- • The entered 1-day settlement period may make fund cash less immediate for emergencies.
What matters most
Deposit insurance
HYSAEligible savings deposits are FDIC-insured within applicable limits; money market mutual funds are not FDIC-insured.
Brokerage cash management
Money market fundA fund can keep cash near investments, but settlement and redemption timing still matter.
Immediate bank access
HYSASavings access is generally more direct; a fund redemption can require settlement and transfer time.
Side-by-side comparison
Rate measure
These measures are not interchangeable guarantees.
- HYSA
- APY
- Money market fund
- 7-day yield
- Stay put
- APY
Protection
- HYSA
- Eligible FDIC deposit coverage
- Money market fund
- Not FDIC-insured
- Stay put
- Depends on product and institution
Access
- HYSA
- Bank transfer or withdrawal
- Money market fund
- Redemption plus settlement/transfer
- Stay put
- Existing workflow
Primary risk
- HYSA
- APY falls
- Money market fund
- Yield/NAV/liquidity risk
- Stay put
- Persistent low yield
What could go wrong
High-yield savings account
- What needs to work
- The APY remains competitive.
- Common problem
- The bank cuts APY.
- What it could cost
- A persistent yield gap.
- How to prepare
- Usually high.
Money market mutual fund
- What needs to work
- The yield advantage survives taxes, fees and access needs.
- Common problem
- Yield falls or cash is not immediately available.
- What it could cost
- A protection or liquidity mismatch.
- How to prepare
- High in normal markets, subject to settlement.
Current bank account
- What needs to work
- The account remains competitive.
- Common problem
- Inertia hides lost income.
- What it could cost
- Compounding opportunity cost.
- How to prepare
- High once noticed.
A simple backup plan
Separate emergency cash from brokerage cash
Different cash jobs can use different containers.
- 1Keep immediate obligations in an eligible insured deposit.
- 2Compare the fund only for cash already serving an investment-account purpose.
- 3Recheck yield, tax treatment and access after rate changes.
Educational illustration only. The right amount depends on your needs and timing.
What to do next
Question 1
Is this first-line emergency cash?
Yes: Favor an eligible insured deposit.
No: Compare after-tax yield and settlement.
Question 2
Is the fund advantage material after fees and tax?
Yes: Verify fund type and access mechanics.
No: Favor simplicity.
Question 3
Could the cash be needed before settlement?
Yes: Keep that layer in savings.
No: A fund may fit the brokerage layer.
Plain-text decision tree. Is this first-line emergency cash? If yes, Favor an eligible insured deposit. If no, Compare after-tax yield and settlement. Is the fund advantage material after fees and tax? If yes, Verify fund type and access mechanics. If no, Favor simplicity. Could the cash be needed before settlement? If yes, Keep that layer in savings. If no, A fund may fit the brokerage layer.
When to check again
- Either yield changes 0.50 point.
- The fund changes strategy or fees.
- The cash becomes emergency money.
- Your tax situation changes.
- Balance approaches applicable insurance limits.
Methodology
Savings uses effective APY; the fund uses an entered annualized-yield scenario, reduced by entered fees and taxes.
Savings starts from live SwitchWize data; fund yield and tax-exempt share are user-entered.
- • Fund NAV movement and temporary liquidity tools are not quantified.
- • Tax treatment depends on actual holdings and annual tax reporting.
- • Provider transfer times vary.
Sources and defaults are reviewed quarterly and after material rule changes. Editorial conclusions do not depend on affiliate availability.
Sources
Frequently asked questions
Is a money market fund FDIC-insured?
No. It is a mutual fund, not a bank deposit.
Is a money market account the same thing?
No. A bank money market deposit account can be an eligible insured deposit; a money market mutual fund is an investment.
What is a 7-day yield?
It is an annualized measure based on a recent seven-day period, not a guaranteed future return.
Can a fund lose money?
Yes. Losses have been rare for stable-value funds, but principal is not guaranteed by the FDIC.
Is government-fund income state-tax free?
Not automatically. The exempt share depends on actual holdings and state rules.
Which is better for emergencies?
Direct access and eligible deposit insurance usually make savings the cleaner first-line reserve.