I periodically review which type of accounts to keep my cash and currently Money Market Funds continue to have better yields than online savings accounts. The Vanguard Treasury Money Market fund (VUSXX) 7- day yield is 5.13%. For longer term savings, Treasury Bills tend to have higher rates that CDs. The 6-month Treasury Bills are 5.56% while 1 year are 5.4%. I am comfortable with the safety of the U.S. treasury.
So I am continuing with a Money Market fund and with purchasing Treasury Bills. I am sure that others will have different thoughts.
No state taxes on Treasury bills. Can make a difference depending upon what state you live in.
A ladder of 1 month, 2 month, 3 month, 17 week and 6 month Treasury bills is easy to construct.
Money markets give you immediate liquidity but lesser interest and the state tax liabilities. Could effectively be a delta of 600 or more basis points in lower yield vs. Treasury bills.
It all depends on your liquidity requirements…