Fidelity Money Market Funds for everyday expenses

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FabianMontescu
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Fidelity Money Market Funds for everyday expenses

Post by FabianMontescu » Fri Jan 12, 2018 8:45 am

I bank with Fidelity. My short term savings are at Ally and I'm considering a change to Fidelity.

Does anyone here uses Fidelity's money market funds for short-term savings? Is there any of Fidelity's money market funds you'd recommend?

Cash
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Re: Fidelity Money Market Funds for everyday expenses

Post by Cash » Sun Jan 14, 2018 9:44 pm

I also recently consolidated at Fidelity, and I use the Fidelity Municipal Money Market Fund (FTEXX) for my short-term holdings. Current yield is a tax-free (in my state) 1.11%.

quaternion
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Re: Fidelity Money Market Funds for everyday expenses

Post by quaternion » Sun Jan 14, 2018 10:03 pm

SPRXX looks like Fidelity's highest-yield, taxable, retail MM fund. Not quite as good as Vanguard's prime money market, though.

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Rainier
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Re: Fidelity Money Market Funds for everyday expenses

Post by Rainier » Fri Mar 30, 2018 12:12 pm

This is exactly what I want to do, get out of Ally and consolidate more to Fido.

This is for short term savings (vacation in 6 months, escrow for property taxes, etc.)

What are the restrictions for buying and selling these funds? Is there a minimum holding period?

It seems like I can just swap out of my "core" cash option and switch to one of the federal funds. Should I do it this way or should I go and buy one of the listed symbols? I think I'd rather just make one of the two choices my core so my brokerage check writing doesn't need to change.

Looks like Vanguard is clearly beating Fido here, but its mostly on the expense side and much fewer restrictions at Fidelity for buying/selling since the core cash positions acts just like that. Not FDIC but a clear winner over Ally and it would be state tax free.

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Kevin M
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Re: Fidelity Money Market Funds for everyday expenses

Post by Kevin M » Fri Mar 30, 2018 8:11 pm

I use SPRXX in a Fidelity IRA. SEC yield is 1.53%, and minimum initial investment is $2,500. This is a bit higher than Ally savings at 1.45%, but of course not FDIC insured, and the Ally rate might increase soon.

Vanguard MM funds have higher yields in general, so in a taxable account I would prefer VG Prime MM at 1.68%. But if you want to consolidate at Fidelity this is not an option.

Kevin
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Artsdoctor
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Re: Fidelity Money Market Funds for everyday expenses

Post by Artsdoctor » Fri Mar 30, 2018 8:29 pm

If you can, the Fidelity Money Market Fund [Premium Class] has a current yield of 1.66%. It'll cost you to get in and there is a minimum balance, but you can easily spend down quickly after you open it, so you don't have to tie up large sums. In reality, unless you're talking about huge sums of money, there's not a lot of difference between funds and you're dancing on the head of a pin.

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whodidntante
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Re: Fidelity Money Market Funds for everyday expenses

Post by whodidntante » Sat Mar 31, 2018 1:21 am

I also bank at a Fidelity with a CMA account. I like that account. I pay my bills from cash flow and run a really thin cash balance in relation to my expenses. My meager amount of cash sits in SPRXX.

You can get slightly higher yield from Treasury bills, with no state income tax due. That's what I would do if I wanted a bit more yield. You can sell them early if you need money. And holding T-bills will increase your cash available for withdrawal with margin, which will cover you in the event of overdraft if you set that feature up. Buy one T-bill and see how it works for you.

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Rainier
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Re: Fidelity Money Market Funds for everyday expenses

Post by Rainier » Sat Mar 31, 2018 5:38 am

whodidntante wrote:
Sat Mar 31, 2018 1:21 am
I also bank at a Fidelity with a CMA account. I like that account. I pay my bills from cash flow and run a really thin cash balance in relation to my expenses. My meager amount of cash sits in SPRXX.

You can get slightly higher yield from Treasury bills, with no state income tax due. That's what I would do if I wanted a bit more yield. You can sell them early if you need money. And holding T-bills will increase your cash available for withdrawal with margin, which will cover you in the event of overdraft if you set that feature up. Buy one T-bill and see how it works for you.
I have a checking account (and the checks say CMA) but my only option for a core position is their FDIC/cash position earning 9bps. Are you doing all your banking from the brokerage/CMA account? Not sure I'm ready to combine the two since my brokerage has securities and now my short term savings.

Trying to think of the best way to run the working capital I generate each month....income now, credit cards due in 30-60 days.

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whodidntante
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Re: Fidelity Money Market Funds for everyday expenses

Post by whodidntante » Sat Mar 31, 2018 11:18 am

Rainier wrote:
Sat Mar 31, 2018 5:38 am
whodidntante wrote:
Sat Mar 31, 2018 1:21 am
I also bank at a Fidelity with a CMA account. I like that account. I pay my bills from cash flow and run a really thin cash balance in relation to my expenses. My meager amount of cash sits in SPRXX.

You can get slightly higher yield from Treasury bills, with no state income tax due. That's what I would do if I wanted a bit more yield. You can sell them early if you need money. And holding T-bills will increase your cash available for withdrawal with margin, which will cover you in the event of overdraft if you set that feature up. Buy one T-bill and see how it works for you.
I have a checking account (and the checks say CMA) but my only option for a core position is their FDIC/cash position earning 9bps. Are you doing all your banking from the brokerage/CMA account? Not sure I'm ready to combine the two since my brokerage has securities and now my short term savings.

Trying to think of the best way to run the working capital I generate each month....income now, credit cards due in 30-60 days.
Yes, that's the only option for a core account. But Fidelity will automatically liquidate SPRXX to meet debits on your CMA account, and it counts as "cash available to withdraw." That is a great feature. One minor annoyance is you have to buy SPRXX when you deposit money into the account every two weeks or whatever. But it's a few mouse clicks and worth it. I usually have $0 in the core account.

totalnoobie
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Re: Fidelity Money Market Funds for everyday expenses

Post by totalnoobie » Sat Jun 23, 2018 2:31 pm

whodidntante wrote:
Sat Mar 31, 2018 11:18 am
Rainier wrote:
Sat Mar 31, 2018 5:38 am
whodidntante wrote:
Sat Mar 31, 2018 1:21 am
I also bank at a Fidelity with a CMA account. I like that account. I pay my bills from cash flow and run a really thin cash balance in relation to my expenses. My meager amount of cash sits in SPRXX.

You can get slightly higher yield from Treasury bills, with no state income tax due. That's what I would do if I wanted a bit more yield. You can sell them early if you need money. And holding T-bills will increase your cash available for withdrawal with margin, which will cover you in the event of overdraft if you set that feature up. Buy one T-bill and see how it works for you.
I have a checking account (and the checks say CMA) but my only option for a core position is their FDIC/cash position earning 9bps. Are you doing all your banking from the brokerage/CMA account? Not sure I'm ready to combine the two since my brokerage has securities and now my short term savings.

Trying to think of the best way to run the working capital I generate each month....income now, credit cards due in 30-60 days.
Yes, that's the only option for a core account. But Fidelity will automatically liquidate SPRXX to meet debits on your CMA account, and it counts as "cash available to withdraw." That is a great feature. One minor annoyance is you have to buy SPRXX when you deposit money into the account every two weeks or whatever. But it's a few mouse clicks and worth it. I usually have $0 in the core account.
Where on Fidelity can I confirm SPRXX will auto-liquidate to cover debits? Does it cover any type of debit? (ATM, debit card, Bill Pay, ACH out)? If so, is there any reason for me to keep anything in the "Core" cash position (other than FDIC insurance)?

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whodidntante
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Re: Fidelity Money Market Funds for everyday expenses

Post by whodidntante » Sat Jun 23, 2018 2:35 pm

totalnoobie wrote:
Sat Jun 23, 2018 2:31 pm
whodidntante wrote:
Sat Mar 31, 2018 11:18 am
Rainier wrote:
Sat Mar 31, 2018 5:38 am
whodidntante wrote:
Sat Mar 31, 2018 1:21 am
I also bank at a Fidelity with a CMA account. I like that account. I pay my bills from cash flow and run a really thin cash balance in relation to my expenses. My meager amount of cash sits in SPRXX.

You can get slightly higher yield from Treasury bills, with no state income tax due. That's what I would do if I wanted a bit more yield. You can sell them early if you need money. And holding T-bills will increase your cash available for withdrawal with margin, which will cover you in the event of overdraft if you set that feature up. Buy one T-bill and see how it works for you.
I have a checking account (and the checks say CMA) but my only option for a core position is their FDIC/cash position earning 9bps. Are you doing all your banking from the brokerage/CMA account? Not sure I'm ready to combine the two since my brokerage has securities and now my short term savings.

Trying to think of the best way to run the working capital I generate each month....income now, credit cards due in 30-60 days.
Yes, that's the only option for a core account. But Fidelity will automatically liquidate SPRXX to meet debits on your CMA account, and it counts as "cash available to withdraw." That is a great feature. One minor annoyance is you have to buy SPRXX when you deposit money into the account every two weeks or whatever. But it's a few mouse clicks and worth it. I usually have $0 in the core account.
Where on Fidelity can I confirm SPRXX will auto-liquidate to cover debits? Does it cover any type of debit? (ATM, debit card, Bill Pay, ACH out)? If so, is there any reason for me to keep anything in the "Core" cash position (other than FDIC insurance)?
It shows up as cash available to withdraw. Look at the "manage cash" tab. Fidelity has a looser definition for what qualifies as a settlement account than other brokers I have used.

emlowe
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Re: Fidelity Money Market Funds for everyday expenses

Post by emlowe » Sat Jun 23, 2018 3:24 pm

I have a CMA account and a brokerage account. The brokerage account has the core account as SPAXX - I keep my money in here (I know they have other MM's with slightly better percentage, but it's just simpler for me to use the default core MM)

The CMA account (mine happens to be at FIFTH THIRD BANK) has minimal money in it (<$500) - the brokerage account is used as overdraft.

In my experience, Fidelity instantly and without fee moves money from SPAXX to cover anything drawn from the CMA account - I've written checks, used the bill pay, and ATM.

This is from Fidelity's web page - http://personal.fidelity.com/webxpress/ ... protection
mySmart Cash Manager® Self Funded Overdraft Protection
As part of mySmart Cash Manager®, Self Funded Overdraft Protection helps fund Fidelity® Cash Management Account debit requests if the debit requests (i.e., from a debit card, direct debit, Fidelity BillPay®, check disbursement, wire, or other cash transactions) exceed the Fidelity® Cash Management Account's available cash balance.

If there is inadequate cash in the Fidelity® Cash Management Account, mySmart Cash Manager Self-Funded Overdraft Protection looks for sufficient funds to cover the debit request in the first Fidelity Funding Account. Self-Funded Overdraft Protection looks for available cash, available margin loan, and non-core money market positions in your first Funding Account. If there are enough available funds to satisfy the debit request, Self Funded Overdraft Protection moves them to your Fidelity® Cash Management Account and satisfies the debit request.
If there are insufficient funds to satisfy the debit request in your first Fidelity Funding Account, Self Funded Overdraft Protection earmarks any available funds and then searches the second Fidelity Funding Account for the difference. If sufficient funds are found, Self Funded Overdraft Protection moves them to your Fidelity® Cash Management Account and satisfies the debit request. If there are insufficient funds to satisfy the debit request in your first and second Fidelity Funding Accounts, mySmart Cash Manager Self Funded Overdraft Protection looks for the difference in your third Fidelity Funding Account, and then your fourth, etc., until enough funds are found to satisfy the debit request, or there are no more Fidelity Funding Accounts.
If there are insufficient funds to satisfy the debit request in your entire Fidelity Funding Account hierarchy, mySmart Cash Manager Self Funded Overdraft Protection does not move any money, and the debit request is processed in the same way as other insufficient fund transactions.

marcopolo
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Re: Fidelity Money Market Funds for everyday expenses

Post by marcopolo » Sat Jun 23, 2018 3:39 pm

whodidntante wrote:
Sat Jun 23, 2018 2:35 pm
totalnoobie wrote:
Sat Jun 23, 2018 2:31 pm
whodidntante wrote:
Sat Mar 31, 2018 11:18 am
Rainier wrote:
Sat Mar 31, 2018 5:38 am
whodidntante wrote:
Sat Mar 31, 2018 1:21 am
I also bank at a Fidelity with a CMA account. I like that account. I pay my bills from cash flow and run a really thin cash balance in relation to my expenses. My meager amount of cash sits in SPRXX.

You can get slightly higher yield from Treasury bills, with no state income tax due. That's what I would do if I wanted a bit more yield. You can sell them early if you need money. And holding T-bills will increase your cash available for withdrawal with margin, which will cover you in the event of overdraft if you set that feature up. Buy one T-bill and see how it works for you.
I have a checking account (and the checks say CMA) but my only option for a core position is their FDIC/cash position earning 9bps. Are you doing all your banking from the brokerage/CMA account? Not sure I'm ready to combine the two since my brokerage has securities and now my short term savings.

Trying to think of the best way to run the working capital I generate each month....income now, credit cards due in 30-60 days.
Yes, that's the only option for a core account. But Fidelity will automatically liquidate SPRXX to meet debits on your CMA account, and it counts as "cash available to withdraw." That is a great feature. One minor annoyance is you have to buy SPRXX when you deposit money into the account every two weeks or whatever. But it's a few mouse clicks and worth it. I usually have $0 in the core account.
Where on Fidelity can I confirm SPRXX will auto-liquidate to cover debits? Does it cover any type of debit? (ATM, debit card, Bill Pay, ACH out)? If so, is there any reason for me to keep anything in the "Core" cash position (other than FDIC insurance)?
It shows up as cash available to withdraw. Look at the "manage cash" tab. Fidelity has a looser definition for what qualifies as a settlement account than other brokers I have used.
I have been wondering about this.
Do you buy SPRXX in the CMA account (can you even do that?), or do you buy it in a linked brokerage account (linked through the "Cash Manager" feature)?
Once in a while you get shown the light, in the strangest of places if you look at it right.

emlowe
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Re: Fidelity Money Market Funds for everyday expenses

Post by emlowe » Sat Jun 23, 2018 4:00 pm

I believe you can buy MMs directly in the CMA account: "Access to short-term investments such as money market mutual funds and CDs"

However, I don't do this so I can't say for certain as I use my brokerage account to hold my MM

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whodidntante
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Re: Fidelity Money Market Funds for everyday expenses

Post by whodidntante » Sat Jun 23, 2018 4:22 pm

emlowe wrote:
Sat Jun 23, 2018 4:00 pm
I believe you can buy MMs directly in the CMA account: "Access to short-term investments such as money market mutual funds and CDs"

However, I don't do this so I can't say for certain as I use my brokerage account to hold my MM
I can confirm that you can buy money market funds in the CMA account. You can also buy stocks. It's a brokerage account.

arf30
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Re: Fidelity Money Market Funds for everyday expenses

Post by arf30 » Sat Jun 23, 2018 4:30 pm

Fidelity will definitely liquidate SPRXX in the CMA to cover transactions, I've used the system myself for a while. The other option is use a brokerage account which has a lower yielding MM fund as a core position.

However I don't recommend the CMA as a main checking account anymore after having some issues related to the partner bank (checks bouncing due to a routing mixup under the hood).

MrPotatoHead
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Re: Fidelity Money Market Funds for everyday expenses

Post by MrPotatoHead » Sat Jun 23, 2018 4:48 pm

Rainier wrote:
Fri Mar 30, 2018 12:12 pm
This is exactly what I want to do, get out of Ally and consolidate more to Fido.

This is for short term savings (vacation in 6 months, escrow for property taxes, etc.)

What are the restrictions for buying and selling these funds? Is there a minimum holding period?

It seems like I can just swap out of my "core" cash option and switch to one of the federal funds. Should I do it this way or should I go and buy one of the listed symbols? I think I'd rather just make one of the two choices my core so my brokerage check writing doesn't need to change.

Looks like Vanguard is clearly beating Fido here, but its mostly on the expense side and much fewer restrictions at Fidelity for buying/selling since the core cash positions acts just like that. Not FDIC but a clear winner over Ally and it would be state tax free.
You might want to take a quick gander at the Fixed Income, Bonds, CDs link at Fido, provided below:

https://fixedincome.fidelity.com/ftgw/fi/FILanding

3 month CD at 2.05%, 3 month Treasury at 1.94...
6 month at 2.20% and 2.14
9 month at 2.30% and 2.27 respectively

My point is the MMF + short term CDs can give you a pretty decent yield right now...

Cheers...

bosocal
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Re: Fidelity Money Market Funds for everyday expenses

Post by bosocal » Sun Jun 24, 2018 10:50 am

I use Fidelity for all my banking and investing. The CMA is just their version of a checking account(even though it is still a brokerage account with all the benefits of that). Your funds are liquid thru the MM's and you can get debit cards and checks for both their CMA and regualr brokerage accounts.

jalm1
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Re: Fidelity Money Market Funds for everyday expenses

Post by jalm1 » Thu Jul 12, 2018 10:47 am

This sounds interesting. Am i undressing your process correctly below?

Setup:
A) a CMA account
B) a brokerage account (for the sake of this example, i'm assuming this account is just used for the MM fund)

Process:
1) Buy MM fund in account B with excess cash
2) Set cash manager in account A with a pretty low minimum balance (say a$500 or $1k)
3) Set cash manager in account A to pull from account B
4) As paychecks / other income flows into account A transfer to account B and buy more MM fund
5) As any type of debit is posted to account A, account B will auto draw and cover each day

Assuming the above works i guess the question is how much cash to leave in account A. In theory it could be pretty low $250 or $500, in practice i may not want so many transfers for smaller transactions (i think the minimum transfer from B to A is $250), but that is a personal preference (I'm thinking about how many transfers are going to be imported into my accounting software).

This may be a dumb question, how does interest work on these MM funds? is it like a MF where there is an Ex date, or are they accruing something like daily based on income generated by the fund and the shareholders thought the month? Depending upon the timing of your cash flow you could come out a lot worse than an online saving account if it was an Ex date concept.

emlowe
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Re: Fidelity Money Market Funds for everyday expenses

Post by emlowe » Thu Jul 12, 2018 11:16 am

jalm1 wrote:
Thu Jul 12, 2018 10:47 am
This sounds interesting. Am i undressing your process correctly below?

Setup:
A) a CMA account
B) a brokerage account (for the sake of this example, i'm assuming this account is just used for the MM fund)

Process:
1) Buy MM fund in account B with excess cash
2) Set cash manager in account A with a pretty low minimum balance (say a$500 or $1k)
3) Set cash manager in account A to pull from account B
4) As paychecks / other income flows into account A transfer to account B and buy more MM fund
5) As any type of debit is posted to account A, account B will auto draw and cover each day

Assuming the above works i guess the question is how much cash to leave in account A. In theory it could be pretty low $250 or $500, in practice i may not want so many transfers for smaller transactions (i think the minimum transfer from B to A is $250), but that is a personal preference (I'm thinking about how many transfers are going to be imported into my accounting software).
Yes, this definitely works. It's how my accounts are setup - I keep the minimum amount in A, usually around $500.

However, based on replies earlier in the thread - you can also do this same thing just with (A). That is you can just buy the MM (say SPRXX) directly in the CMA account. You don't need the separate brokerage account to hold the MM.

iamblessed
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Re: Fidelity Money Market Funds for everyday expenses

Post by iamblessed » Sun Sep 30, 2018 5:42 pm

In the brokerage does it automatically draw from a money market you buy or do you have to set it up it do that? A money market that is not the core fund is what I a speaking of?

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welderwannabe
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Re: Fidelity Money Market Funds for everyday expenses

Post by welderwannabe » Sun Sep 30, 2018 6:07 pm

iamblessed wrote:
Sun Sep 30, 2018 5:42 pm
In the brokerage does it automatically draw from a money market you buy or do you have to set it up it do that? A money market that is not the core fund is what I a speaking of?
Yes. All money market funds in your brokerage account show up as cash available to trade and cash available for withdrawal. I don't keep money in the core account. I always buy SPRXX with it...My balance of SPRXX is just like it is in the core account. I can transfer it, withdraw it, purchase stock or other funds with it etc. It works fine.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

iamblessed
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Re: Fidelity Money Market Funds for everyday expenses

Post by iamblessed » Sun Sep 30, 2018 6:25 pm

welderwannabe wrote:
Sun Sep 30, 2018 6:07 pm
iamblessed wrote:
Sun Sep 30, 2018 5:42 pm
In the brokerage does it automatically draw from a money market you buy or do you have to set it up it do that? A money market that is not the core fund is what I a speaking of?
Yes. All money market funds in your brokerage account show up as cash available to trade and cash available for withdrawal. I don't keep money in the core account. I always buy SPRXX with it...My balance of SPRXX is just like it is in the core account. I can transfer it, withdraw it, purchase stock or other funds with it etc. It works fine.
If your core goes empty in the brokerage will it automatically draw from your other money market fund or did you have to set it up to do that? This is on the brokerage account not the CMA account.

arf30
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Re: Fidelity Money Market Funds for everyday expenses

Post by arf30 » Sun Sep 30, 2018 6:37 pm

Fidelity treats all MM funds as cash and will liquidate as needed to cover transactions - it's that simple.

Personally I'm lazy, I just use a brokerage account as a checking+savings account, 100% SPAXX, direct deposit and all. I keep about $500 cash in the CMA using the cash manager to cover the occasional ATM withdrawal.

vtMaps
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Re: Fidelity Money Market Funds for everyday expenses

Post by vtMaps » Sun Sep 30, 2018 8:08 pm

arf30 wrote:
Sun Sep 30, 2018 6:37 pm
Fidelity treats all MM funds as cash and will liquidate as needed to cover transactions - it's that simple.

Personally I'm lazy, I just use a brokerage account as a checking+savings account, 100% SPAXX, direct deposit and all. I keep about $500 cash in the CMA using the cash manager to cover the occasional ATM withdrawal.
You don't need to keep $500 (or any amount) in the CMA for ATM. If you use your ATM card, fidelity will sell enough SPAXX to cover the withdrawal.

--vtMaps
The optimist proclaims that we live in the best of all possible worlds; and the pessimist fears this is true. --James Branch Cabell

arf30
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Re: Fidelity Money Market Funds for everyday expenses

Post by arf30 » Sun Sep 30, 2018 8:23 pm

vtMaps wrote:
Sun Sep 30, 2018 8:08 pm
You don't need to keep $500 (or any amount) in the CMA for ATM. If you use your ATM card, fidelity will sell enough SPAXX to cover the withdrawal.

--vtMaps
I know - I keep the overdraft feature disabled to prevent debit card fraud from draining the main account. That limits my risk to about $500 until the bank decides to return the money. Normally I wouldn't worry about it, but Fidelity has a $15,000 daily limit on the debit card and aren't able to lower it.

jalm1
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Re: Fidelity Money Market Funds for everyday expenses

Post by jalm1 » Sun Sep 30, 2018 11:23 pm

arf30 wrote:
Sun Sep 30, 2018 6:37 pm
Personally I'm lazy, I just use a brokerage account as a checking+savings account, 100% SPAXX, direct deposit and all. I keep about $500 cash in the CMA using the cash manager to cover the occasional ATM withdrawal.
Maybe i need to try something similar. Right now i am using SPRXX in a brokerage account which funds an CMA account for all daily spending. The hassle is remembering twice a month to txfr cash (direct deposit) from the CMA to the brokerage and buy more SPRXX. I'm not about to invest in the time to move all the bill pay and auto payments from the CMA to the brokerage account, but maybe i should update the direct deposit to go in to the brokerage accounts, and then occasionally see if excess funds should be moved from SPAXX to SPRXX. That may save some time and hassle.

It would be great if Fidelity would allow SPRXX to be the default position of brokerage accounts, but i guess its only 0.2% difference.

arf30
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Re: Fidelity Money Market Funds for everyday expenses

Post by arf30 » Mon Oct 01, 2018 7:18 am

jalm1 wrote:
Sun Sep 30, 2018 11:23 pm
Maybe i need to try something similar. Right now i am using SPRXX in a brokerage account which funds an CMA account for all daily spending. The hassle is remembering twice a month to txfr cash (direct deposit) from the CMA to the brokerage and buy more SPRXX. I'm not about to invest in the time to move all the bill pay and auto payments from the CMA to the brokerage account, but maybe i should update the direct deposit to go in to the brokerage accounts, and then occasionally see if excess funds should be moved from SPAXX to SPRXX. That may save some time and hassle.

It would be great if Fidelity would allow SPRXX to be the default position of brokerage accounts, but i guess its only 0.2% difference.
In your case it might be simpler to just stop using the brokerage account, hold a chunk of SPRXX in the CMA as savings, and pay bills from the cash position like a traditional checking account. SPRXX will never be a core position option due to money market regulations - only federal MM funds like SPAXX are allowed.

MisterBill
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Re: Fidelity Money Market Funds for everyday expenses

Post by MisterBill » Wed Oct 03, 2018 7:49 pm

iamblessed wrote:
Sun Sep 30, 2018 6:25 pm
If your core goes empty in the brokerage will it automatically draw from your other money market fund or did you have to set it up to do that? This is on the brokerage account not the CMA account.
Yes I ran into this the other day. I had bought SPRXX with most of the money in my CMA and Brokerage accounts but had some left in cash so I went back to put the rest into it. But when I moved all of the cash in the CMA to SPRXX, it hit the minimum balance I had set up and automatically redeemed $250 of SPRXX from the brokerage account and moved it to cash in the CMA. I had the minimum set to $250; I just changed it to $50 and bought $200 of SPRXX with the rest so hopefully that will work. Of course when I take money out next week while on vacation it will probably do the same.

I am very intrigued by the idea of using Fidelity as my main checking account. I currently use AXOS (known as Bank of Internet until very recently) and get 1.25% but have to do 15 debit card transactions a month (I just pay my Verizon bill $3 15 times a month to satisfy it). Until SPRXX goes below 1.25%, I'd be better off just using Fidelity, plus it would make my life easier. I already use the CMA for getting cash from the ATM on the rare occasions that I need it (generally vacation). I'm just concerned about getting everything set up and then having to undo it if/when the rates drop again.

If would be nice if I could get FZDXX (the Money Market Fund - Premium Class) which is currently paying a bit over 2%. I suppose I could move enough cash in to hit the $100k minimum and then move stuff back out. Actually, at that rate I could move my money from Discover Savings which is paying 1.85%. I think it should still qualify for the automatic redemption option when I need cash, right?

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Kevin M
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Re: Fidelity Money Market Funds for everyday expenses

Post by Kevin M » Wed Oct 03, 2018 8:00 pm

MisterBill wrote:
Wed Oct 03, 2018 7:49 pm
I currently use AXOS (known as Bank of Internet until very recently) and get 1.25% but have to do 15 debit card transactions a month (I just pay my Verizon bill $3 15 times a month to satisfy it).
That is a horrible reward checking account (RCA). Heritage bank pays 3.33% APY on up to $25K, and you only have to do 10 debit card purchases per month (as well as the standard one ACH into the account per month). Lake Michigan Credit Union has been paying 3% on up to $15K (10 transactions per month) for years.

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drzzzzz
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Re: Fidelity Money Market Funds for everyday expenses

Post by drzzzzz » Wed Oct 03, 2018 8:29 pm

What I like about fidelity is that they consider all of your money market funds and use them as needed for settlement in contrast to vanguard, which even if you have money in your prime moiney market account, you get a notice that your settlement account is negative and needs funds to cover a transaction or else you are on margin

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Re: Fidelity Money Market Funds for everyday expenses

Post by MisterBill » Wed Oct 03, 2018 9:56 pm

Kevin M wrote:
Wed Oct 03, 2018 8:00 pm
MisterBill wrote:
Wed Oct 03, 2018 7:49 pm
I currently use AXOS (known as Bank of Internet until very recently) and get 1.25% but have to do 15 debit card transactions a month (I just pay my Verizon bill $3 15 times a month to satisfy it).
That is a horrible reward checking account (RCA). Heritage bank pays 3.33% APY on up to $25K, and you only have to do 10 debit card purchases per month (as well as the standard one ACH into the account per month). Lake Michigan Credit Union has been paying 3% on up to $15K (10 transactions per month) for years.

Kevin
Yeah, you're right. I had looked at Heritage a while ago but never opened an account. Just went back and did so. Sadly, they no longer allow you to charge your opening deposit so I'll just put $100 in there and then move more when I actively start using it. At least there's no monthly fee if I don't do meet the requirements, just minimal interest (which won't matter until I start using it actively).

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Re: Fidelity Money Market Funds for everyday expenses

Post by UpperNwGuy » Wed Oct 03, 2018 10:15 pm

Kevin M wrote:
Wed Oct 03, 2018 8:00 pm
MisterBill wrote:
Wed Oct 03, 2018 7:49 pm
I currently use AXOS (known as Bank of Internet until very recently) and get 1.25% but have to do 15 debit card transactions a month (I just pay my Verizon bill $3 15 times a month to satisfy it).
That is a horrible reward checking account (RCA). Heritage bank pays 3.33% APY on up to $25K, and you only have to do 10 debit card purchases per month (as well as the standard one ACH into the account per month). Lake Michigan Credit Union has been paying 3% on up to $15K (10 transactions per month) for years.

Kevin
There is no way I would do 10 debit card purchases a month as a requirement for checking rewards. Not only would that cause me to miss the rewards I would earn by using a credit card, but it would expose me to the lesser protections offered by debit cards.

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Re: Fidelity Money Market Funds for everyday expenses

Post by MisterBill » Wed Oct 03, 2018 10:28 pm

UpperNwGuy wrote:
Wed Oct 03, 2018 10:15 pm
There is no way I would do 10 debit card purchases a month as a requirement for checking rewards. Not only would that cause me to miss the rewards I would earn by using a credit card, but it would expose me to the lesser protections offered by debit cards.
I pay my Verizon bill with it. With Bank of Internet it had to be $3 minimum, so I lost out on credit card rewards on about $46 (Verizon doesn't let you do multiple payments of the same amount on a single day and I don't feel like having to do it more than once a month so I do $3, $3.01, $3.02, etc). Heritage doesn't seem to have a minimum so I can do $1, $1.01 etc. No lost protections. Others buy Amazon gift cards but I have plenty of Amazon gift card credit and don't need more.

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Re: Fidelity Money Market Funds for everyday expenses

Post by Kevin M » Thu Oct 04, 2018 1:48 pm

MisterBill wrote:
Wed Oct 03, 2018 9:56 pm
Yeah, you're right. I had looked at Heritage a while ago but never opened an account. Just went back and did so. Sadly, they no longer allow you to charge your opening deposit so I'll just put $100 in there and then move more when I actively start using it. At least there's no monthly fee if I don't do meet the requirements, just minimal interest (which won't matter until I start using it actively).
As is common with RCAs, Heritage does not require you to meet the requirements the first month to earn the high interest rate. So what I did was start opening the account toward the end of the month, so it was opened near the beginning of the following month. I funded it with a check for $25K, which I mailed with the account forms and scanned drivers license. I left $15K in LMCU for that month, and did my LMCU purchases for that month, then at the end of the month, transferred most of the $15K out of LMCU, and started using the Heritage card.

So for most of the first month the Heritage account was open, I earned 3.33% APY on $25K while still earning 3.00% APY on $15K at LMCU.

You know you're earning the 3.33% APY (3.28% interest rate) the first month, because they display that rate as soon as the account is opened and funded. Starting the second month, they display 0.05% until you have met the requirements, then it shows 3.28%. Not quite as good as the Max Checking Status display at LMCU, but an easy way to know when you've met the requirements.

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Kevin M
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Re: Fidelity Money Market Funds for everyday expenses

Post by Kevin M » Thu Oct 04, 2018 1:58 pm

UpperNwGuy wrote:
Wed Oct 03, 2018 10:15 pm
There is no way I would do 10 debit card purchases a month as a requirement for checking rewards. Not only would that cause me to miss the rewards I would earn by using a credit card, but it would expose me to the lesser protections offered by debit cards.
Can't argue with your concern about lesser protections (except that in all my years of using RCAs, I've never had a problem), but the lost credit card reward is minimal if you just use the RCA debit card for small purchases, which is what I do.

If your average purchase amount is $5, and you use the debit card instead of a purchase you'd otherwise make with a 2% cash-back credit card, you lose about $1 in credit card rewards (=$50 * 2%). In return, you earn about $28 extra in interest each month on $25K, compared to say a savings account paying 2% (=1.33% * 25,000 / 12).

Kevin
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yeahman
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Re: Fidelity Money Market Funds for everyday expenses

Post by yeahman » Thu Nov 01, 2018 10:03 am

I tried keeping my CMA at $0 but my ATM withdrawal failed. I guess debit cards don't trigger overdrafts? In that case, wouldn't the overdraft protection be useless in practice? I can write checks, bill pay, and transfer from my brokerage directly. The CMA would only be useful for debit card use and would require a separate balance. Am I correct in all this?

Brit
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Re: Fidelity Money Market Funds for everyday expenses

Post by Brit » Wed Nov 28, 2018 12:53 pm

Would the same rules that apply to a CMA also apply to an HSA?

IE if I moved the money from core funds to SPRXX and paid a medical bill with the Visa card, the SPRXX would be auto-debited?

hotpancakes
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Re: Fidelity Money Market Funds for everyday expenses

Post by hotpancakes » Wed Nov 28, 2018 1:34 pm

Brit wrote:
Wed Nov 28, 2018 12:53 pm
Would the same rules that apply to a CMA also apply to an HSA?

IE if I moved the money from core funds to SPRXX and paid a medical bill with the Visa card, the SPRXX would be auto-debited?
I use my CMA account w/ SPRXX as I would a checking account and Fidelity auto-liquidates SPRXX as-needed to cover all debits. It's wonderful.

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Re: Fidelity Money Market Funds for everyday expenses

Post by Brit » Thu Nov 29, 2018 11:29 am

What is a good alternative MM fund to SPRXX that is FDIC insured?

I have emergency fund in a B of A MM fund that's delivering almost nothing, and it strikes me that I should create a CMA at Fidelity to park it safely where I will make at least some interest. Thoughts?

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Re: Fidelity Money Market Funds for everyday expenses

Post by mervinj7 » Thu Nov 29, 2018 11:44 am

Brit wrote:
Thu Nov 29, 2018 11:29 am
What is a good alternative MM fund to SPRXX that is FDIC insured?

I have emergency fund in a B of A MM fund that's delivering almost nothing, and it strikes me that I should create a CMA at Fidelity to park it safely where I will make at least some interest. Thoughts?
I use FDLXX to keep running cash (<1 months worth) since I'm in CA and the Treasury Only Money Market is not taxable for CA state tax purposes. The rest of my EF is in individual short-term 6 month Treasury bills that auto-roll each month (no ER). Current 6 month yield is 2.53%. I effectively create my own money market like fund with an effective duration of 3 months. For large expenditures that are known in advance, I set aside additional funds in a Treasury bill with a matching maturity date. For example, I may set aside $10k in a bill that matures in March 2019 for my known property tax bill.

Tax Equivalent Yield (TEY) for FDLXX: 1.82% *(1-0.24)/(1-0.24-0.093)=2.07%
TEY for 6 month Treasury: 2.53% *(1-0.24)/(1-0.24-0.093)=2.88%

Calculating TEY: viewtopic.php?t=248539

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Re: Fidelity Money Market Funds for everyday expenses

Post by arf30 » Thu Nov 29, 2018 11:53 am

Brit wrote:
Thu Nov 29, 2018 11:29 am
What is a good alternative MM fund to SPRXX that is FDIC insured?

I have emergency fund in a B of A MM fund that's delivering almost nothing, and it strikes me that I should create a CMA at Fidelity to park it safely where I will make at least some interest. Thoughts?
MM funds are not FDIC insured. You want a high yield savings account or CD to get FDIC.

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Re: Fidelity Money Market Funds for everyday expenses

Post by mervinj7 » Thu Nov 29, 2018 12:05 pm

arf30 wrote:
Thu Nov 29, 2018 11:53 am
Brit wrote:
Thu Nov 29, 2018 11:29 am
What is a good alternative MM fund to SPRXX that is FDIC insured?

I have emergency fund in a B of A MM fund that's delivering almost nothing, and it strikes me that I should create a CMA at Fidelity to park it safely where I will make at least some interest. Thoughts?
MM funds are not FDIC insured. You want a high yield savings account or CD to get FDIC.
Yes, safety is one of the reasons that I use Treasury bills and Treasury MM funds for my EF. Both T-bills and FDIC-backed CDs are backed by the full faith and credit of the U.S. government.

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Re: Fidelity Money Market Funds for everyday expenses

Post by Brit » Thu Nov 29, 2018 2:23 pm

Super helpful, thank you!

What's the benefit of using 6 month treasury bills over CDs? Tax benefits? I'm in GA

Also what's an example of a Treasury MM fund?

I learn something useful EVERY day on this forum!
Last edited by Brit on Thu Nov 29, 2018 2:48 pm, edited 1 time in total.

mptfan
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Re: Fidelity Money Market Funds for everyday expenses

Post by mptfan » Thu Nov 29, 2018 2:28 pm

arf30 wrote:
Sat Jun 23, 2018 4:30 pm
However I don't recommend the CMA as a main checking account anymore after having some issues related to the partner bank (checks bouncing due to a routing mixup under the hood).
That's because the Fidelity CMA account is not a checking account, it is a brokerage account. I understand that in many ways it functions the same as a checking account, but that is not the same thing as being a checking account.

InertiaMan
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Re: Fidelity Money Market Funds for everyday expenses

Post by InertiaMan » Thu Nov 29, 2018 4:32 pm

yeahman wrote:
Thu Nov 01, 2018 10:03 am
I tried keeping my CMA at $0 but my ATM withdrawal failed. I guess debit cards don't trigger overdrafts? In that case, wouldn't the overdraft protection be useless in practice? I can write checks, bill pay, and transfer from my brokerage directly. The CMA would only be useful for debit card use and would require a separate balance. Am I correct in all this?
I keep my CMA at $0 and use my ATM all the time. Never had a problem. But I always have sufficient $$ in a liquid MM account (SPAXX or FZDXX) in the tied brokerage account. If its not working for you, either there is some problem in the account setup, or you lack liquid cash equivalent in the brokerage??

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Re: Fidelity Money Market Funds for everyday expenses

Post by mervinj7 » Thu Nov 29, 2018 4:34 pm

Brit wrote:
Thu Nov 29, 2018 2:23 pm
Super helpful, thank you!

What's the benefit of using 6 month treasury bills over CDs? Tax benefits? I'm in GA

Also what's an example of a Treasury MM fund?

I learn something useful EVERY day on this forum!
1. 6 month Treasury currently has a yield of 2.52%. 6 month CD is paying 2.50%. However, Treasury bills are excluded from state tax, so the effective yield can be higher if you pay non-zero state income tax. See my previous post for an example.
https://fixedincome.fidelity.com/ftgw/f ... hest-yield

2. FDLXX is an example of a Treasury Only MM Fund.
https://fundresearch.fidelity.com/mutua ... /31617H300

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Re: Fidelity Money Market Funds for everyday expenses

Post by Brit » Thu Nov 29, 2018 4:47 pm

Exactly what I was looking for THANK YOU!

Gadget
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Re: Fidelity Money Market Funds for everyday expenses

Post by Gadget » Thu Nov 29, 2018 8:46 pm

InertiaMan wrote:
Thu Nov 29, 2018 4:32 pm
yeahman wrote:
Thu Nov 01, 2018 10:03 am
I tried keeping my CMA at $0 but my ATM withdrawal failed. I guess debit cards don't trigger overdrafts? In that case, wouldn't the overdraft protection be useless in practice? I can write checks, bill pay, and transfer from my brokerage directly. The CMA would only be useful for debit card use and would require a separate balance. Am I correct in all this?
I keep my CMA at $0 and use my ATM all the time. Never had a problem. But I always have sufficient $$ in a liquid MM account (SPAXX or FZDXX) in the tied brokerage account. If its not working for you, either there is some problem in the account setup, or you lack liquid cash equivalent in the brokerage??
I asked Fidelity today and they said yes, if there is $0 in the CMA account you can still get cash from an ATM (if money is in the overdraft account). I will now change my settings to keep a zero dollar balance instead of the $500 I thought I needed.

justsomeguy2018
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Re: Fidelity Money Market Funds for everyday expenses

Post by justsomeguy2018 » Thu Nov 29, 2018 8:58 pm

Hello, maybe someone can help me.

I have all or most of my 1-yr emergency fund in an FDIC MM yielding 2.0%. (Also $15k in a high yield account at 3%, capped at 15k)

Any recommendations for an approach that yields more? Is it worth the extra 0.5% to lose FDIC and go through hassle of shifting funds around?

I live in TX, so no state income tax considerations to factor in.

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