I'm still a fan of FSLXX - Fidelity Select Money Market.  It's yield is 2.63% - not great, but a little higher than FDRXX.  I never hear FSLXX getting any mention around here, though; is there something I should know?

 comico

I was holding a bunch of cash in FTEXX, needed for taxes next April--wanted to keep it separate from more general savings in FDRXX.  I went back and read the prospectus and decided that municipals, which will be hit slowly but hard by the housing crash, were not the right place to keep money at the moment--I cashed it out and put it in a 6 month CD.  Pays less but safer.  I'm inclined to think, in a worst case scenario, that FIDO will protect those MM funds that are heavily used but might not protect one that was both less used and very clear, in its prospectus, about risk.

DrH  

I too was looking at the Municipal MM funds today and wondering why their tax-free yield was so much higher than the taxable funds.  What is going on?

Audrey 

Muni CEF's are tanking (mine is IQT)... it looks like yields might be rising on muni's... maybe that is carrying over to muni MM's... just guessing.  I have no idea why...

erryl

erryl:

Muni CEF's are tanking (mine is IQT)... it looks like yields might be rising on muni's... maybe that is carrying over to muni MM's... just guessing.  I have no idea why...

erryl

Erryl, per Anil's idea, I have invested the vast majority of my taxable cash in a state-specific muni money market fund that now yields over 4%. Is that a red flag? Should I get out of it? Thanks for any guidance.

Jeff

I'm not erryl--would love to hear from him (putting the name in the topic usually works).  But if the returns on the very short term municipal debt that MMs may hold are rising then that means that buyers think the risk of municipal default, even on this very short paper, is also increasing.  I also believe (hope) that FIDO won't break the buck on any MM fund--but if the money is really for short term cash needs and if having the fund frozen for a bit would be a major inconvenience/problem, then I'd advise moving into one of the more standrad MMs or, as others have suggested, the one backed by treasuries.

DrH 

I talked to Fidelity about it, and  they correlated the rise in muni yield with the fall in Treasury yield.  Basically, they said people left *everything* to go to the Treasuries, and that caused a yield spike in the munis.

I'm just repeating what a rep told me.   I don't normally follow this stuff.  So take it for what it's worth.

Fidelity has many money market funds. One is list as Fidelity US treasury and some are like govt. reserve, or government money market. What is the difference? Does it mean any thing which says government can buy treasury and any thing from GSE or state government etc vs treasury MM fund can only buy treasury?