Money Market Funds: Are You Earning 6%+ in 2025?

Money market mutual funds are quietly delivering 6.5–7% returns on short-term money. If your savings are sitting in a regular savings account at 3%, you could be leaving thousands of rupees on the table every year.

Here's what happened: Top money market mutual funds are generating 6.5–7% annualised returns over the past year, beating most savings accounts.. These funds invest in short-term instruments like T-bills, CPs, and CDs with maturities under 1 year — making them relatively stable.. Unlike FDs, money market funds have no lock-in, and redemptions typically hit your bank account within 1 business day..

What you should do: Compare: Check if your emergency fund or short-term savings are in a savings account earning below 4% — if yes, explore money market funds.. Calculate: Use any mutual fund platform (Groww, Zerodha Coin, MFCentral) to see post-tax returns vs your current FD rate before switching.. Check your tax slab: Money market fund gains are taxed as per your income slab — if you're in the 30% bracket, a 7% pre-tax FD may still win after math..

Money market funds work best for your 'Tier 2 emergency fund' — money you won't need in 24 hours but want accessible within a week. Keep one month's expenses in a savings account; park the rest here for better returns.