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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Joined: Fri Jun 15, 2018 12:59 pm

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.

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