Taking a closer look at money market funds
Erik Zhou
·
Jun 23, 2025
Jun 23, 2025
Considering more than yield
Many of our competitors are offering mutual funds that carry both principal risk and liquidity risk. This means you could risk a loss and freeze up your funds in pursuit of a few extra basis points.
That's not a tradeoff you need to make. Our Brex business account lets you invest in a money market fund that invests primarily in U.S. government-backed securities, with same-hour liquidity.
The math that matters
If you're comparing treasury products like the Brex business account, here are a couple of calculations to consider.
Right now, some competitors in the market are promoting a treasury product that actually invests in a mutual fund trading at $9.98 a share. It was trading at $10.00 a share 6 months ago. If you bought it then, you'd have already lost 20 basis points on principal alone. Annualized? That'd be a 40 basis point loss.
Instead of earning the yield advertised, you’d have earned less in reality. You could have even lost money overall depending on when you bought. All while tying up your cash due to the liquidity limitations of mutual funds.
Similarly, I saw another mutual fund drop almost 1% in price per share in a week, effectively slashing the yield to -12% APR during that timeframe.
Money market funds and stability
By enabling you to invest in a money market fund that invests primarily in U.S. government-backed securities, Brex offers a way to earn yield on your operating cash.
Because government MMFs are subject to SEC regulations and requirements for portfolio composition and liquidity management, they seek to maintain a net asset value (NAV) of $1.00 per share.
On the other hand, mutual fund prices can move up and down more often because they expose your investment to the stocks and bonds of everyday companies, and volatility makes capital preservation harder.
Let's do a comparison:
Government money market funds
- Seeks to maintain a NAV of $1.00
- Designed to seek to preserve your principal
- Access your invested funds within a day — or within an hour if you use Brex
Mutual funds
- Fluctuating share prices based on market conditions
- Your principal is more at risk every day
- Takes up to 3 days to access your funds
Why this matters for growing companies
Your job as a business leader is to seek yield while seeking to preserve your principal and maintain liquidity. When yield differences are measured in basis points, even small price movements in mutual funds can detract from yield advantage while putting your principal at risk.
When your business is moving quickly, you probably also can’t afford to have the value of your operating funds drop overnight. So you may want to seek the flexibility of a money market fund and same-hour liquidity.
Consider Brex
Brex aims to deliver reliability, liquidity, and yield. We believe it’s worth considering earning yield through a MMF. Open a Brex business account in minutes and start earning up to 3.71%† today.
You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the FDIC or any other government agency
†Total treasury return includes yield and additional return and is subject to the total balance in Checking, Treasury, and Vault. Yield is the annual percentage rate based on the current 7-day average yield for the Dreyfus Government Cash Management Fund (DGVXX), and is effective as of 02/19/26. Additional return is effective as of 02/19/26 and paid by Brex Treasury LLC. Yield and additional return are variable and only earned on invested funds in Treasury. Yield and additional return are provided monthly and automatically reinvested. More details on current rates here. Based on customers eligible for the highest tier rate for their Brex business account and compared to rates offered by fintech competitors providing a US-government money market fund as of June 3, 2025. Investing in securities involves risk and loss of money.
You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. Although the fund's board has no current intention to impose a fee upon the sale of shares, the board reserves the ability to do so after providing at least 60 days prior written notice to shareholders.
Investors should consider the investment objectives, risks, charges, and expenses of a money market fund carefully before investing. To obtain a prospectus, or summary prospectus, if available, that contains this and other information about the fund, contact your financial professional or visit dreyfus.com. Read the prospectus carefully before investing.