A money market ETF invests in very short-term debt (T-bills, repos, interbank deposits) and tracks the money market interest rate—currently around 2.00–2.02%—with the advantage of being able to be bought and sold on the stock exchange like a stock. It is the liquid alternative to a bank deposit.
What is a money market ETF?
Money market ETFs (also called money market ETFs) invest exclusively in fixed-income instruments with maturities of less than 397 days and high credit quality (investment grade). Their objective is to track the €STR (Euro Short-Term Rate) index, the successor to EONIA, which currently stands at around 2.00–2.02%.
Unlike a bank deposit, a money market ETF:
- Offers daily liquidity—you can sell at any time during market hours
- Is not covered by the Deposit Insurance Fund (FGD)—although it invests in very safe assets
- Accumulates returns daily in the price (accumulation mode) or pays periodic dividends
- Allows for tax deferral if transferred to another fund (tax advantage in Spain)
The best euro money market ETFs for 2026
1. Amundi Euro Liquidity UCITS ETF (C3M)
| Feature | Details |
|---|---|
| Ticker | C3M (Euronext Paris) |
| TER (fee) | 0.10% per year |
| Yield 2025 | +3.89% |
| YTD return 2026 | +0.92% (as of May 2026) |
| Assets under management | +€18 billion |
| Benchmark | €STR (capitalized) |
| Accumulation/Distribution | Accumulation |
The largest euro-denominated money market ETF in Europe. Its low TER (0.10%) and massive volume ensure excellent liquidity. Available on Degiro, Interactive Brokers, XTB, and Scalable Capital.
2. BlackRock iShares € Ultrashort Bond UCITS ETF (ERNE)
| Feature | Details |
|---|---|
| Ticker | ERNE (Xetra) |
| TER (fee) | 0.09% per year |
| Return 2025 | +3.82% |
| Assets under management | +€8 billion |
| Benchmark | Bloomberg Euro Gov/Corp 0-1Y |
| Accumulation/Distribution | Accumulation |
Slightly more conservative than C3M, with a small exposure to high-quality corporate credit that has historically added a few basis points of return.
3. Xtrackers II EUR Overnight Rate Swap UCITS ETF (XEON)
| Characteristic | Details |
|---|---|
| Ticker | XEON (Xetra) |
| TER (fee) | 0.10% per year |
| Return 2025 | +3.87% |
| Assets under management | +€6.0 billion |
| Synthetic | Synthetic (swap) on €STR |
| Accumulation/Distribution | Accumulation |
The synthetic replication (via swap) ensures a tracking error of nearly zero relative to the €STR. It is the preferred option for investors seeking maximum fidelity to the benchmark.
4. Lyxor Smart Overnight Return UCITS ETF (CSH2)
| Feature | Details |
|---|---|
| Ticker | CSH2 (Euronext Paris) |
| TER (fee) | 0.07% per year |
| Yield 2025 | +3.92% |
| Assets under management | +€5,000 million |
| Benchmark | €STR Accumulation |
| Accumulation/Distribution | Accumulation |
The lowest TER on this list (0.07%). Managed by Amundi (acquired Lyxor in 2021). Ideal for cost-sensitive investors.
Money market ETF vs. interest-bearing account vs. deposit
| Money market ETF | Interest-bearing account | Deposit | |
|---|---|---|---|
| Current yield | ~2.30–2.40% net | 2.00–3.00% | 2.50–3.50% |
| FGD guarantee | No | Yes (up to €100K) | Yes (up to €100K) |
| Liquidity | Daily (market) | Immediate | At maturity |
| Tax-free transfer | Yes (funds) | No | No |
| Minimum amount | Starting at 1 share (~€) | Variable | Variable |
| Market risk | Minimum | None | None |
Taxation in Spain
ETFs are taxed like stocks—they cannot be transferred to another ETF without incurring a tax. However, you can transfer from a traditional money market fund to another fund without incurring a tax. If you want the benefit of tax-free transfers, consider money market funds from MyInvestor or Scalable Capital instead of ETFs.
Gains from selling are taxed at the savings tax rate:
- Up to €6,000 in gains: 19%
- From €6,000 to €50,000: 21%
- From €50,000 to €200,000: 23%
- Over €200,000: 28%
Where can you buy money market ETFs?
These ETFs are available through major Spanish and European brokers:
- Interactive Brokers — commissions starting at €0 on select ETFs, access to all European markets
- Scalable Capital — commission-free ETFs on the Prime plan, including C3M and XEON
- Trade Republic — no purchase fees, very user-friendly interface
- XTB — commission-free up to €100,000/month in trading
- DEGIRO — low fees but no commission-free ETFs on money market funds
How much will €10,000 yield in a money market ETF in 2026?
| Capital | Gross return (2.40%) | ETF fee (0.10%) | Net before taxes |
|---|---|---|---|
| €10,000 | €240 | €10 | €230 |
| €50,000 | €1,200 | €50 | €1,150 |
| €100,000 | €2,400 | €100 | €2,300 |
Frequently Asked Questions
Are money market ETFs safe?
They are among the safest assets on the market, although they are not covered by the Deposit Guarantee Fund (FGD). They invest in high-quality, very short-term government and corporate debt. The main risk is the credit risk of the issuer of the underlying assets, which has historically been almost zero in the eurozone.
Can I lose money with a money market ETF?
Theoretically, yes, although in practice it is extremely rare. In scenarios of sharp rate hikes or credit crises, there may be losses of a few tenths of a percent. In 2008–2009, European money market ETFs did not break the euro (unlike some U.S. money market funds).
When does an accumulation ETF pay interest?
Accumulation ETFs do not pay dividends—the return is compounded into the share price daily. You pay taxes only when you sell.
C3M or XEON?
Both track the €STR and have identical TERs (0.10%). C3M is larger (more liquidity, lower market spread). XEON uses synthetic tracking, which guarantees a tracking error of nearly zero. For most investors, the difference is irrelevant—just choose whichever is available through your broker.