The short answer
A money market fund is a mutual fund, whereas a bank money market deposit account is a deposit; the fund does not have FDIC deposit insurance.[2][3] A seven-day current yield annualizes recent fund income rather than promising that return for the coming year.[4] Compare the product and its protection before comparing percentages.
First identify what you actually own
Money market funds invest in liquid short-term debt, cash and cash equivalents, and distribute dividends that generally reflect short-term interest rates.[2] A money market deposit account is offered by a bank and can receive FDIC protection within applicable limits.[2][3] The shared words “money market” do not make the two interchangeable.
Before transferring money, ask whether you will hold fund shares or a bank deposit. Record the fund name and share class, or the deposit bank and ownership category. This is a practical identification checklist, not a recommendation to choose whichever website shows the larger percentage.
Seven days describes the measurement window
The fund report cited here defines seven-day current yield using net interest income generated over the past seven days, assuming that income is generated each week over a 365-day period.[4] It is therefore an annualized recent-income measure, not the percentage earned in one week.[4] This filing is an issuer disclosure hosted by the SEC, not an SEC endorsement.
The same report distinguishes seven-day effective yield, which assumes reinvestment and reflects compounding.[4] Check whether a displayed figure says current yield or effective yield, and record its as-of date. Do not infer a seven-day maturity or a seven-day withdrawal lock merely from the label.
Why the bank percentage is not the same measurement
Regulation DD defines annual percentage yield as the total interest paid on an account expressed as an annualized rate, reflecting the interest rate and compounding frequency over a 365-day period.[6] That differs from extrapolating a fund’s recent seven-day income.[4][6] Regulation DD also defines a variable-rate account as one whose interest rate may change after opening, unless the institution contracts to give at least 30 days’ advance written notice of decreases.[6]
The SEC bulletin says fund yields change over time and generally reflect changes in short-term rates.[2] Consequently, treat a side-by-side comparison as a dated comparison of disclosed measures, not a guarantee of the next year’s earnings. Keep the discussion focused on income measurement and product identity rather than assuming either quoted percentage is fixed.
A hypothetical income translation, not a forecast
Assume a $10,000 holding, a hypothetical seven-day current yield of 3.65%, unchanged principal and a simple 365-day annualization. Reversing that assumed annualization gives $10,000 × 0.0365 × 7 ÷ 365 = $7 for seven days. This is a derived teaching calculation, not an actual fund distribution.
If that income pace hypothetically continued for 30 days without reinvestment, the estimate would be $30; for 365 days it would be $365. The unchanged pace is an explicit assumption. Because fund yields change, the seven-day observation alone cannot establish either future amount.[2] Do not treat this arithmetic as a bank APY calculator or a forecast of fund total return.
Deposit insurance follows the bank and ownership category
FDIC coverage is $250,000 per depositor, per insured bank, for each account ownership category; deposits in the same category at the same bank are added together.[3] Money market deposit accounts are covered deposit types, while mutual funds are not—even when sold by an insured bank.[3]
For a hypothetical example, assume one person has $200,000 in a money market deposit account and $80,000 in another deposit account, both in the single-account category at the same insured bank. Applying the stated aggregation rule gives $280,000 against a $250,000 limit, leaving $30,000 above that limit.[3] These stipulated balances ignore accrued interest and any other deposits; opening a second account is not, by itself, a second insurance allowance.[3]
A stable share-price objective is not deposit protection
FINRA explains that a retail money market fund is managed to keep its net asset value stable at $1 per share, but money market funds have sometimes fallen below that value.[1] The SEC bulletin warns that an investment in a money market fund is not FDIC-guaranteed and can lose money.[2] A stability objective must not be substituted for a deposit-insurance promise.
For cash needed for a specific payment, ask separately about redemption procedures, transfer timing and availability for spending. Keep those operational questions separate from the yield calculation. The final comparison should identify what you own, what the percentage measures, what protection applies and when you can use the proceeds—not declare a universal winner from two numbers.
Sources & scope
Links support definitions and methodology. Worked examples are hypothetical, not quotes; the review date is not the observation date of a market value.
- FINRA — Taking a Look at Money Market Funds ↗
Source date: 2024-04-09 · Verified: 2026-09-20
- Investor.gov — Money Market Funds: Investor Bulletin ↗
Source date: 2024-11-04 · Verified: 2026-09-20
- FDIC — Understanding Deposit Insurance (last updated) ↗
Source date: 2024-04-01 · Verified: 2026-09-20
- Putnam Money Market Fund — shareholder report filed on SEC EDGAR (report period ends September 30, 2025; publication date not established) ↗
Source date: Not stated in the retrieved body · Verified: 2026-09-20
- CFPB — Regulation DD, §1030.2 Definitions (publication date not stated) ↗
Source date: Not stated in the retrieved body · Verified: 2026-09-20