Tax-Exempt Money Market Funds

Tax-exempt money market funds are investment vehicles that pool money from multiple investors to buy short-term, low-risk debt securities issued by state and local governments. The interest earned from these investments is typically exempt from federal income tax and, in some cases, state taxes. This makes them attractive for individuals in higher tax brackets seeking to preserve capital and earn some interest without facing high tax liabilities. They offer liquidity, allowing investors to access their funds easily while providing a stable return compared to traditional savings accounts or taxable investments.