SNSXX vs. SWVXX: Which Schwab Money Market Fund Keeps More After Tax?

Yields move. The headline yields are Schwab’s 7-day yields for both funds on October 6, 2026; the 13-month history comes from the funds’ own SEC filings.

Schwab does not put brokerage cash in a money market fund for most accounts, so anyone holding one at Schwab picked it. The choice usually comes down to these two funds. They have the same expense ratio, both have no minimum and both hold a $1.00 share price. What separates them is what they own, and that decides both the state tax and what happens in a panic.

What differs

SNSXX is a government money market fund. Its prospectus requires at least 80% of net assets in U.S. Treasury securities and allows up to 20% in agency debt such as Federal Home Loan Bank notes. It may use repurchase agreements only with the Federal Reserve Bank of New York and only for temporary defensive purposes.¹ In practice it has held Treasuries alone: every position in its monthly SEC holdings reports from August 2025 through August 2026 is classified as U.S. Treasury debt.²

SWVXX is a retail prime fund, renamed from the Schwab Value Advantage Money Fund in April 2025 with the same strategy text and fees.¹ It buys short-term debt from banks and companies, U.S. and foreign. At the end of August 2026 its largest holdings were repurchase agreements backed by agency securities (25%), certificates of deposit (23%), Treasury-backed repurchase agreements (12%), financial company commercial paper (11%) and asset-backed commercial paper (8%). It held no Treasury bills directly.² As a retail fund it is open only to individuals, and it can charge a liquidity fee on sales, which SNSXX has opted out of.

The state-tax gap

Interest on Treasury securities is exempt from state income tax, and a fund passes that exemption through in proportion to how much of its income came from them. For 2025, Schwab reported 99.99% for SNSXX. SWVXX does not appear in the table, and Schwab’s note says funds not shown had 0% of their income from U.S. government obligations.³ The repurchase agreements in SWVXX do not help even when Treasuries back them, because the fund earns interest from the dealer on the other side of the trade, not from the Treasury.

California, Connecticut and New York apply a second test: the fund must hold at least half its assets in U.S. government obligations at the end of each quarter, or its residents get no exemption at all. Schwab marks SNSXX as meeting it.³ For SWVXX the question does not arise, since there is nothing to exempt.

The gap in dollars depends on the state rate. For one modeled saver in California at a 32% federal and 9.3% state rate, with $50,000 and the October 6 yields, SNSXX keeps about 2.41% after tax and SWVXX about 2.17%, so SNSXX comes out about $121 a year ahead. The same saver in a 5% state is about $41 ahead in SNSXX. With no state income tax, SWVXX’s extra 15 basis points are worth about $51 a year after federal tax.

Run your own numbers

Pick your state and account type. The yields start at the October 6 figures; slide them to whatever Schwab shows today. The calculator also reports the balance at which the gap reaches $100 a year.

SWVXX led on yield every month for a year

A single day can mislead, so the table below uses the month-end 7-day yield each fund reports to the SEC. SWVXX was ahead in all 13 months. The lead was 15 to 28 basis points in late 2025 and has held at 10 to 13 since February 2026.² The last column is the state rate at which the two funds would have tied after tax for someone in the 32% federal bracket. Above it, SNSXX keeps more.

The break-even ran from about 2% to 5%, and below 3% for most of 2026. California’s 9.3% bracket and New York’s 6.85% sit well above it. A few states with low flat rates sit close to it, and there the calculator is worth running. A lower federal bracket raises the break-even a little, because each extra point of SWVXX yield is worth more after federal tax: at 24% federal, the October 6 yields tie at a state rate of about 3.1% instead of 2.8%.

What the extra yield pays for

SWVXX yields more because it lends to banks and companies instead of the Treasury. That has a cost, and the clearest record of it comes from the two times prime funds came under stress.

In September 2008 the Reserve Primary Fund, a prime fund holding $785 million of Lehman Brothers debt, repriced its shares at $0.97 on September 16 and suspended redemptions the next day. Its investors eventually got back more than $0.98 on the dollar, but they waited for it. That week investors pulled about $300 billion, 14% of the assets in taxable prime funds.⁴ On September 19 Treasury announced a one-year guarantee of money fund balances, and the SEC later credited that and Federal Reserve programs with containing the run.⁵

In March 2020, retail prime funds lost about 9% of their assets in two weeks, against 30% at institutional prime funds, and on March 18 the Federal Reserve set up a facility that lent banks money to buy assets from money funds.⁶⁷ Some retail prime funds’ market values dipped, but none reported a market-based price below $0.9975. Government fund assets grew by $840 billion that month while prime fund assets fell by $125 billion.⁶

The rules changed after 2020. Since October 2023 a money fund can no longer block redemptions with a gate. A prime fund’s board can instead charge a liquidity fee of up to 2% on sales when it decides the fee is in the fund’s best interest.⁸ For SWVXX, Schwab’s board has handed that decision to the fund’s adviser, and the prospectus says a fee is most likely in “extraordinary market stress” and would generally start the next business day after notice. SNSXX has opted out and would have to give shareholders notice before opting back in.¹

None of this makes SWVXX likely to lose money. Its holdings average about a month to maturity, and on October 5, 2026 both funds’ market-based value was $0.9998 a share.⁹ The risk is a small chance of a haircut or a fee at the one moment you most want the cash, which is when an emergency fund gets used.

Schwab’s own cash feature pays much less than either

Neither fund holds your cash automatically. Most Schwab brokerage accounts hold it in the Bank Sweep or Schwab One Interest feature, and Schwab says its other money funds are available to buy but “not available on a sweep basis.”¹⁰ On October 7, 2026, Schwab’s public rate page listed uninvested cash in a brokerage account at 0.01% APY.¹¹ Moving idle cash into either fund matters far more than choosing between them: on $50,000, the difference between 0.01% and about 3.6% is roughly $1,800 a year before tax. How to move it, and what the sweep is still good for, is in Schwab Bank Sweep vs. SWVXX.

When SWVXX is the better pick

In a state with no income tax, the state exemption is worth nothing and SWVXX’s 10 to 15 basis points are the only difference, about $35 to $50 a year on $50,000 after a 32% federal rate. Inside an IRA the state-tax question never arises, so the same is true there. In both cases you are trading that yield against the liquidity fee and credit risk described above. For an emergency fund I would still use SNSXX: removing that risk costs about $35 to $50 a year on $50,000. For cash held inside an IRA as part of a long-term allocation, which you are unlikely to need on the worst day of a crisis, SWVXX’s extra yield is worth taking.

If you want more yield than either fund, a Treasury bill ETF is the usual next step, at the cost of trading whole shares during market hours at a price that moves slightly. That comparison is in SWVXX vs. SGOV.

Key takeaways

• Same fee, same $1.00 price, different holdings. SNSXX holds Treasuries; SWVXX holds bank and corporate debt and repurchase agreements.
• SWVXX yielded 10 to 28 basis points more at every month end from August 2025 to August 2026.
• SNSXX’s income was 99.99% state-exempt for 2025 and passed the CA/CT/NY test; SWVXX’s was 0%.
• For one modeled California saver at 32%/9.3%, SNSXX came out $90 to $130 a year ahead on $50,000 in each of the 13 months. The break-even state rate ran about 2% to 5%.
• With no state income tax or in an IRA, SWVXX yields more, in exchange for credit risk and a possible fee of up to 2% on sales in a crisis.
• Either beats Schwab’s cash feature, which listed uninvested brokerage cash at 0.01% APY.

How Summitward helps

Frequently asked questions

Is SNSXX better than SWVXX?

In a taxable account in most states with an income tax, yes, after tax. SWVXX’s yield lead over the past year was 10 to 28 basis points, and in the 32% federal bracket a state rate of roughly 2% to 5% cancelled it, depending on the month. With no state income tax, or inside an IRA, SWVXX yields more.

Is SWVXX safe?

It holds short-term, high-quality debt and has kept a $1.00 share price, but it is a prime fund, with no FDIC insurance and no government guarantee. The prime fund that broke the buck in 2008 returned a little over $0.98 on the dollar, after a delay. Since 2023 SWVXX can also charge a fee of up to 2% on sales if Schwab decides that is in the fund’s interest, most likely in a market crisis. Government funds like SNSXX carry neither risk to the same degree.

Is SNSXX state tax free?

Nearly. Schwab reported 99.99% of its 2025 income as coming from U.S. government obligations and marked it as meeting the California, Connecticut and New York holdings test, so the exemption applies in every state. Federal tax still applies to all of it.

Does switching from SWVXX to SNSXX trigger a tax bill?

No. Both funds hold a $1.00 share price, so selling one realizes no gain or loss. The dividends you have already earned are taxed as usual.

What about SNVXX and SNOXX?

SNVXX, the Schwab Government Money Fund, and SNOXX, the Schwab Treasury Obligations Money Fund, are government funds too, but they hold mostly repurchase agreements. At the end of August 2026, 65% of SNOXX was Treasury-backed repo, and 62% of SNVXX was repo of one kind or another.² That shows up in the tax table: for 2025 only 31.30% of SNOXX’s income and 36.20% of SNVXX’s came from U.S. government obligations, and neither passed the CA/CT/NY test.³ Despite its name, SNOXX gives you about a third of SNSXX’s state-tax benefit, and none in those three states.

What is SNAXX?

The Ultra share class of the same prime fund as SWVXX, with a $1,000,000 minimum and a 0.19% net expense ratio instead of 0.34%. Same holdings and risks, about 15 basis points more yield.¹

Related guides

• SWVXX vs. SGOV: the Treasury bill ETF alternative at Schwab, which returned more than either fund.
• Schwab Bank Sweep vs. SWVXX: what leaving cash in Schwab’s default sweep costs, and how to move it.
• FDLXX vs. SPAXX: the Fidelity version, where both funds are government funds and only the repo share differs.
• VUSXX vs. VMFXX: the Vanguard version.
• What Percent of SGOV Is State Tax Exempt?: 2025 state-exempt percentages for cash funds and ETFs, and the CA/CT/NY 50% test.
• Where to Park Your Cash: money funds, Treasury ETFs, bank accounts and CDs side by side.
• SGOV vs. HYSA: whether a Treasury ETF beats a high-yield savings account after tax.
• SNSXX vs. SWVXX at a glance: the compact version with the table.

Sources

1. Charles Schwab Family of Funds, Schwab Taxable Money Funds prospectus (Form 485BPOS) and summary prospectuses (Form 497K), April 28, 2026: investment policies, expense ratios, minimums, liquidity fee provisions and the former name of the Prime Advantage fund. sec.gov
2. Charles Schwab Family of Funds, Form N-MFP3 monthly reports for the Schwab U.S. Treasury Money Fund and Schwab Prime Advantage Money Fund, August 2025 through August 2026: holdings by category and month-end 7-day net yields. Also the Schwab Government and Treasury Obligations Money Funds, August 31, 2026. sec.gov
3. Schwab Asset Management, “2025 Supplementary Tax Information” (SNSXX 99.99%, SNVXX 36.20%, SNOXX 31.30%; only funds marked with an asterisk meet the California, Connecticut and New York minimum; funds not shown had 0%). schwabassetmanagement.com
4. SEC, “Money Market Fund Reform,” Release No. IC-29132, 75 Fed. Reg. 10060 (March 4, 2010): Reserve Primary Fund and September 2008 prime fund outflows. govinfo.gov (PDF)
5. U.S. Treasury, “Treasury Announces Guaranty Program for Money Market Funds,” press release HP-1147, September 19, 2008. treasury.gov
6. President’s Working Group on Financial Markets, “Overview of Recent Events and Potential Reform Options for Money Market Funds,” December 2020, pp. 14-15. treasury.gov (PDF)
7. Federal Reserve Board, press release establishing the Money Market Mutual Fund Liquidity Facility, March 18, 2020. federalreserve.gov
8. SEC, “Money Market Fund Reforms” fact sheet, Release No. 33-11211 (July 12, 2023), and 88 Fed. Reg. 51404 (August 3, 2023): removal of redemption gates, discretionary liquidity fees up to 2%, effective October 2, 2023. sec.gov (PDF)
9. Schwab Asset Management, SNSXX and SWVXX fund pages: 7-day yields as of October 6, 2026; market-based NAV as of October 5, 2026; expense ratios. SNSXX, SWVXX
10. Charles Schwab & Co., “Cash Features Program Disclosure Statement,” October 2026. schwab.com
11. Charles Schwab, “Cash investments” rate page, rates as of October 7, 2026. schwab.com

Author disclosure

I have no relationship with Schwab. Every fund figure is Schwab’s own, from its fund pages, tax document or SEC filings, on the dates given. Nothing here is tax advice; the state treatment described depends on facts this article cannot see.