Money market funds hit another record high — but experts warn it's time to move out of cash. Where they see opportunity

Despite an anticipated Federal Reserve rate cut coming next week, Americans are continuing their love affair with cash. Yet, experts warn they should make some moves if they want to lock in attractive yields. Assets in money market funds hit $6.

3 trillion the week ended Wednesday, another record high, according to the Investment Company Institute . The funds have attracted inflows thanks to their attractive payouts. The annualized 7-day yield on the Crane 100 list of the 100 largest taxable money funds is currently 5.

08%. Bank of America is predicting those inflows will continue, even after the Federal Reserve starts cutting rates . The central bank is slated to meet Sept.

17-18, and more than 70% of traders anticipate a quarter percentage point reduction in the federal funds rate, according to the CME Group's FedWatch Tool . The remaining traders believe it will be a 50 basis point. "Fed rate cuts are unlikely to unlock MMF cash unless rates < 2%.

Fed cuts should see MMF inflows slow but outflows unlikely unless cuts much deeper vs market expectations," Bank of America strategist Mark Cabana wrote in a note last week. History shows that when investors do move out of money market funds, they move into fixed income over equities, he said. Institutional investors will also continue to move into money market funds as the Fed cuts rates, because any cash they have in direct money market investments, like Treasury bills, will be hit by rate cuts quicker than money market funds, ex.