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Fidelity Investments FYI

txFish1
  |     |   470 posts since 2023

I am sure most Fidelity customers that have their Cash Management Account already know this but starting later this week Fidelity will add SPAXX as a core position option currently yielding 4.95% to their CMA account. The only current option is the FDIC insured sweep that yields 2.72%. Just a way to earn a little extra cash on your money. SPAXX is not FDIC insured but covered under SIPC.

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111
  |     |   672 posts since 2019
Good info. txFish1. Vanguard's done this with VMFXX for quite a while, now Fidelity's doing it - Schwab, lookin' at you!
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HollyHolly
  |     |   88 posts since 2015
This is a wonderful feature of Fidelity. You don't have to sell a fund at the end of the day to have money to trade/invest the next day, and any redemptions of Treasuries, bonds,etc automatically move into SPAXX.. Money moves automatically in and out of SPAXX. Just be aware that due to the fact that 50% or more of the income earned comes from Repos, the Repo income is not tax free at the state level.
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Ally6770
  |     |   4,214 posts since 2010
Harry Sit sent a good article about Fidelity checking accounts this week in his emails. He does Finance Buff that I think  many here now read his site. If you go to his site
you will find much more information about these checking accounts.He does a great blog on IRMAA that I have read for a few years. Helps with Roth conversions with a heads up on things to do with IRMAA. I think I started with it when the inflation element was put into it.  
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MY2CENTSWORTH
  |     |   434 posts since 2016
I'm not certain of the source for this information, but it might be good to keep in mind if you are a Fidelity customer and use their ATM/debit card. https://www.mymoneyblog.com/fidelity-atm-debit-card-warning-fraudulent-transactions.html
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txFish1
  |     |   470 posts since 2023
MY2CENTS good point. I rarely use an ATM card but I always lock my Fidelity ATM card and just unlock it when I go get cash from the ATM. My brother-in-law and I have a discussion about Fidelity being just like a Fintech Company every time we go fishing. He says they are and I say they are not but I guess they are a middleman with some similarities.
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lou
  |     |   1,002 posts since 2010
Do you have to request a Fidelity representative to change the core position in Cash Management Account to SPAXX or is it done automatically.?
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mffarrell
  |     |   95 posts since 2018
You can change it yourself, no need to speak to Fidelity.
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HollyHolly
  |     |   88 posts since 2015
Almost the entire composition of SPAXX is either US Treasuries or Repos (which are secured with US Treasuries), so you have the functional equivalent of FDIC insurance for about 97% of the money. After all, who funds FDIC? The only problem might be a temporary one related to rapid shift in interest rates.
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