Money market fund rules: what rule 2a-7 requires, fund by fund
The limits every U.S. money fund works under, and the maturity figures each fund reported in its own filing.
Compiled by Radif Partners · Editorial policy
A money market fund in the United States is a mutual fund that complies with rule 2a-7 under the Investment Company Act. The rule is what allows most of these funds to keep a share price of $1.00, and in exchange it constrains what they may hold. Holdings must be short: no single security may mature in more than 397 days, the dollar-weighted average maturity of the portfolio may not exceed 60 days, and its weighted average life, which counts floating-rate notes to their final maturity rather than their next reset, may not exceed 120 days. Holdings must be liquid: at least 25% of assets must be cash or securities convertible to cash within one business day, and at least 50% within five business days, the levels set by the amendments adopted in 2023. Holdings must be of high quality and diversified across issuers. And every fund must report its full portfolio monthly on Form N-MFP, the filing this site reads. These limits explain why money funds react to rate changes within weeks, why their yields stay close to Treasury bill rates, and why the figures here can be checked against the rule for every fund.
Is a portfolio within the rule 2a-7 limits?
Example, not your result yet· change a figure to see yours
Within the limits
Yes
| Maturity, limit 60 days | Within |
| Life, limit 120 days | Within |
| Daily liquid, minimum 25% | Met |
| Weekly liquid, minimum 50% | Met |
Tax-exempt funds are not held to the daily liquidity minimum.
Maturity in the filings
The weighted average maturity and weighted average life reported for each fund at the end of the latest month, averaged by type of fund (one figure per fund, not per share class):
| Type | Funds | Average maturity | Average life | Longest life |
|---|---|---|---|---|
| Treasury only | 17 | 43 days | 75 days | 104 days |
| Treasury | 16 | 33 days | 73 days | 110 days |
| Government | 87 | 30 days | 72 days | 116 days |
| Prime | 19 | 32 days | 61 days | 95 days |
| Municipal | 14 | 29 days | 30 days | 44 days |
| Single-state municipal | 12 | 30 days | 31 days | 41 days |
The gap between maturity and life is the floating-rate notes. A two-year Treasury floating-rate note whose rate resets every day counts as one day for maturity and as its full remaining term for life. Government funds that hold many floating-rate agency notes show a life far above their maturity. Fidelity Government Money Market (SPAXX) reported 39 days of maturity and 116 of life; Vanguard Federal (VMFXX) 25 and 50. A longer maturity means the yield follows market rates more slowly; a longer life means more exposure to the credit and liquidity of the issuers over time. The funds with the longest life in the data:
| Fund | Maturity | Life |
|---|---|---|
| FZSXX Fidelity Government Money Market Fund | 39 days | 116 days |
| GCCXX Goldman Sachs Central Government Fund | 29 days | 116 days |
| RNRXX Allspring Government Money Market Fund | 36 days | 116 days |
| FUGXX Invesco Premier U.S. Government Money Portfolio | 42 days | 114 days |
| FGGXX Goldman Sachs Financial Square Fund - Government | 35 days | 114 days |
Stable and floating share prices
Rule 2a-7 sorts funds into three groups. Government funds, which hold at least 99.5% of their assets in cash, government securities and repo backed by them, may use amortized cost to keep a stable $1.00 price for every investor. Retail funds, prime or tax-exempt, may also keep a stable price, but only for accounts of natural persons; the fund must have policies that limit it to individuals. Institutional prime and institutional tax-exempt funds must float their price, rounded to four decimals, so that gains and losses show up in the share price. Every fund in the comparator on this site is either a government fund or a retail fund, so all keep a $1.00 price.
Liquidity fees
The 2023 amendments changed the fee rules. A fund that is not a government fund may charge a discretionary liquidity fee of up to 2% on redemptions if its board, or its delegate, decides the fee is in the fund’s best interest. Institutional prime and institutional tax-exempt funds must charge a mandatory liquidity fee when net redemptions on a day exceed 5% of net assets, unless the cost of meeting them is negligible. Government funds may choose to adopt a discretionary fee, but are not required to. The same amendments removed redemption gates and broke the old link between a fund’s weekly liquidity and fees. For a retail investor in a government or retail prime fund, the practical change is small: fees remain possible in a crisis for retail prime and tax-exempt funds, and remain unusual for government funds.
Reporting
Every money fund files Form N-MFP within five business days after the end of each month. Since the 2023 amendments the form has carried more detail, including daily yields and daily and weekly liquid assets for each business day of the month, and the Commission publishes the filings as they are received. That is what makes this site possible: the yields, holdings and maturities on every page come from those reports, as filed, without relying on the fund companies’ own presentation. It also sets the site’s delay, since a month’s data appears only in the first week of the next one.