Still, you don't want to invest expecting to be bailed out. And you're certainly not being compensated for the risk: Money funds are paying as little as 0.01 percent. (Not a misprint.) Many banks offer more, along with a federal guarantee. And that is perfectly safe.
Risk, No Reward
Used to be that money market funds offered higher yields than banks. That was your reward for taking a little extra risk and forgoing the bank's federal insurance. These days, though, there's no reward for the risk.
The assets money funds hold, such as Treasury bills, yield close to zero. Lots of banks beat that. With a little online digging, you can squeeze out half a percent or so in a CD or savings account insured by the FDIC (banks) or the CUNA (credit unions).
Liz Weston, author of The 10 Commandments of Money, blogs at Ask Liz Weston.