Also, if you value the state tax exemption (for example, you live in California), you need to make sure the fund only invests in Treasuries and not in repurchase agreements. Treasuries are state tax exempt, but repos are not. If your fund holds a mix, you need to tease them apart at tax time.
Or just buy the Treasuries directly. Why pay a fund to do it for you?
Yea, buying into a MMF only makes sense if you need the money to be semi liquid since it only takes a day or so to cash out.
Otherwise buying short term treasuries is quite easy on most brokers. The downsise being it may not be as quick to sell on the secondary market when you need to cash out unless you get competitive with the sell terms.
Buyer availability really isn't a concern, especially for short term bills. I've never had even the slightest problem selling a T-bill one the secondary market. It's almost always as instant as selling 100 shares of a stock.
Thank you for this comment. I was really confused on the difference between MMFs and T Bills, going by the other comments in this thread it seemed like there is a preference for MMFs without stating why.
Or just buy the Treasuries directly. Why pay a fund to do it for you?