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SGOV vs the Money Market Funds People Actually Hold

SGOV is a Treasury bill ETF. Most people's cash sits in a money market fund instead, often without choosing it. These pages compare SGOV to the big four, on the things that persist: expense ratio, state-tax treatment, and structure. Educational only, no recommendation.

The whole decision in one table
Fund	Type	Fee	State-tax exempt interest	The one-line difference
SGOV	Treasury bill ETF	0.09%	Yes, nearly all of it	Lowest fee plus the state-tax break; price floats slightly instead of pegging $1
SPAXX	Government money market	0.42%	Partly, often below the CA/NY/CT threshold	Fidelity’s automatic sweep; convenience is the whole case
SWVXX	Prime money market	0.34%	Generally no	Slightly higher gross yield in exchange for corporate credit exposure
VUSXX	Treasury money market	0.09%	Yes, essentially all of it	SGOV’s only true peer on both fee and tax; $3,000 minimum, $1 share price
FDLXX	Treasury money market	0.42%	Yes, nearly all of it	Matches SGOV on tax; the 0.33% fee gap is the entire difference

Fidelity

SGOV vs SPAXX

Fidelity's default cash sweep. Lower fee and cleaner state-tax profile favor SGOV; SPAXX wins on automatic convenience.

Schwab

SGOV vs SWVXX

Schwab's prime money fund. Usually a higher gross yield with a little credit risk; SGOV keeps the state-tax break.

Vanguard

SGOV vs VUSXX

Vanguard's Treasury money fund. The closest matchup: same 0.09% fee, split by structure and a $3,000 minimum.

Fidelity

SGOV vs FDLXX

Fidelity's Treasury-only fund. Nearly matches SGOV on tax; the 0.42% fee is the gap.

Want to run it on your own balance? The Cash Parking Calculator shows what a given amount keeps after fees and your state tax across a Treasury ETF, a money market fund, and a savings account.

Prefer the settlement-fund angle or a broader take? See SGOV vs VMFXX (Vanguard's default sweep), SGOV vs money market funds in general, and SGOV vs buying T-bills directly. The tax mechanic that runs through all of these is in is SGOV exempt from state tax, and the full short-to-long lineup is in the Treasury ETF guide.

Frequently Asked Questions

Is SGOV better than a money market fund?

Neither is better in every case; two numbers decide it. First, the fee: SGOV charges 0.09% while SPAXX and FDLXX charge 0.42% and SWVXX 0.34%, and every basis point of fee comes straight out of yield. Second, state tax: SGOV’s Treasury interest is mostly exempt from state income tax, which matters in high-tax states and not at all in states with no income tax. VUSXX matches SGOV on both counts and the choice there comes down to structure and convenience. General education, not personalized advice.

Are money market funds exempt from state income tax?

Only to the extent they hold direct US government obligations. Treasury-only funds like VUSXX and FDLXX pass through mostly state-exempt interest. Government sweep funds like SPAXX hold repurchase agreements that do not qualify, so a smaller share is exempt, and in California, New York, and Connecticut a fund must clear a 50% threshold before any of it counts. Prime funds like SWVXX hold corporate paper and are generally not exempt at all.

Does SGOV yield more than SPAXX, SWVXX, VUSXX, or FDLXX?

All five track short-term rates, so gross yields move together. The durable difference is the fee gap: SGOV and VUSXX keep about 0.33% more of the same gross yield than SPAXX or FDLXX every year, simply by charging 0.09% instead of 0.42%. Prime funds like SWVXX sometimes carry a slightly higher gross yield in exchange for a little credit risk.

Is SGOV as safe as a money market fund?

They are different structures with similar practical risk. A money market fund targets a fixed $1.00 share price but is not FDIC insured. SGOV holds 0-3 month Treasury bills and its share price floats within a few cents around $100 as interest accrues and pays out monthly. Neither is bank-guaranteed; both sit at the very low end of investment risk.

Nothing on ETF BFF is personalized financial or tax advice, and these comparisons recommend no fund. Money market funds are not FDIC insured, and their yields are not guaranteed. Expense ratios, holdings, and tax treatment change; confirm current details with each issuer. ETF BFF is not a registered investment adviser. See our About page for full disclosures.