Money market funds, on the other hand — while also generally safe — are a bit riskier, experts said.
Investors who prefer money market funds may opt for government money market funds, which carry slightly less risk, Elliott said.
YieldMoney market funds tend to pay a slightly higher interest rate relative to high-yield savings accounts, Elliott said.
TaxesInterest income for both high-yield savings and money funds is taxed as regular income, experts said.
However, some money market funds may carry tax benefits, said Eric Bronnenkant, head of tax at Betterment.
Persons:
Kamila Elliott, Elliott, Greg McBride, They've, McBride, Treasurys —, Eric Bronnenkant, Bronnenkant
Organizations:
Wealth Partners, CNBC, Bankrate, Federal Reserve, Deposit Insurance Corporation, Treasury, Lehman, Federal Reserve Bank of Boston, Investor Protection Corporation, Investors, Data, Federal, Consumers, U.S
Locations:
Atlanta