Could I use Fidelity brokerage account instead of its checking account?

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hoaius7
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Joined: Wed Sep 11, 2019 9:27 am

Could I use Fidelity brokerage account instead of its checking account?

Post by hoaius7 » Wed Sep 11, 2019 9:43 am

Good morning! This is my first post. Thank you in advance for your wisdom.

I currently keep cash on my Fidelity checking account. However I find out that cash keeping on Fidelity brokerage account have higher interest than its cash/checking account (1.77% compared to 1.07%). It also has other features or benefits:
- ATM reimbursement with debit card
- Bill pay or setup payment for credit card using routing/account number. I think I can setup direct deposit to this account as well.

I just wonder there is any restriction on the brokerage account compared to the cash/checking account. How about other broker house such as Vanguard or Schwab. I just want to find a better use of my cash and I'm pretty new in investment.

Many thanks!

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alpenglow
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Re: Could I use Fidelity brokerage account instead of its checking account?

Post by alpenglow » Wed Sep 11, 2019 11:11 am

The CMA is a brokerage account, though they don't exactly advertise it that way. You can put your cash in SPRXX in the CMA for a higher yield. It will auto-liquidate to cover debits.

Ferdinand2014
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Re: Could I use Fidelity brokerage account instead of its checking account?

Post by Ferdinand2014 » Wed Sep 11, 2019 11:14 am

hoaius7 wrote:
Wed Sep 11, 2019 9:43 am
Good morning! This is my first post. Thank you in advance for your wisdom.

I currently keep cash on my Fidelity checking account. However I find out that cash keeping on Fidelity brokerage account have higher interest than its cash/checking account (1.77% compared to 1.07%). It also has other features or benefits:
- ATM reimbursement with debit card
- Bill pay or setup payment for credit card using routing/account number. I think I can setup direct deposit to this account as well.

I just wonder there is any restriction on the brokerage account compared to the cash/checking account. How about other broker house such as Vanguard or Schwab. I just want to find a better use of my cash and I'm pretty new in investment.

Many thanks!
I have found no difference in my CMA vs brokerage account. In name only as far as I can tell. Just put your money in FDLXX (Treasury only money market account).
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

123
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Re: Could I use Fidelity brokerage account instead of its checking account?

Post by 123 » Wed Sep 11, 2019 11:26 am

We have brokerage accounts with checking account features at both Schwab and Fidelity but we we rarely use the checking feature, usually only to pay large expenses like annual property tax or a new car. We use a separate checking account at a brick and mortar bank for general banking/bill pay.

There are two reasons we segregate our household checking needs from our brokerage accounts. One is to limit disclosure of the brokerage account number and access to all the automatic blll pay services (we don't want the substantial resources in those accounts to be drained due to hacking or fraud since the protection of checking accounts is less than that for a credit card.=). The other is simply we don't want our investment statements cluttered with lots of mundane checking transactions. The segregation works for us.

That said one could have multiple accounts at Fidelity, one for checking purposes and another for investments.
The closest helping hand is at the end of your own arm.

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William4u
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Re: Could I use Fidelity brokerage account instead of its checking account?

Post by William4u » Wed Sep 11, 2019 11:46 am

hoaius7 wrote:
Wed Sep 11, 2019 9:43 am
I have found no difference in my CMA vs brokerage account. In name only as far as I can tell. Just put your money in FDLXX (Treasury only money market account).
I have both and found two little differences. The CMA account has free ATM reimbursement for all account holders (the brokerage requires one have good deal more money for the ATM reimbursement, and you need to qualify for it in advance). And they send a larger free book of checks with the CMA account. Otherwise there isn't much difference, other than the default MM fund is better in the brokerage account.

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whodidntante
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Re: Could I use Fidelity brokerage account instead of its checking account?

Post by whodidntante » Wed Sep 11, 2019 12:46 pm

Free, unlimited ATM rebates with tiny account balances would be the main CMA advantage I would care about. Some have reported that you can keep a balance of $0 in your CMA and let the debits hit your brokerage account. You have to setup the CMA account to do that. I have it setup to do that, but I don't keep cash in my brokerage account, so it would be a margin debit if my CMA account ran dry.

Topic Author
hoaius7
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Re: Could I use Fidelity brokerage account instead of its checking account?

Post by hoaius7 » Thu Sep 12, 2019 10:28 pm

Hi folks. Thanks your your replies. I'm sorry for the late appreciation.

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dogagility
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Re: Could I use Fidelity brokerage account instead of its checking account?

Post by dogagility » Fri Sep 13, 2019 4:43 am

alpenglow wrote:
Wed Sep 11, 2019 11:11 am
The CMA is a brokerage account, though they don't exactly advertise it that way. You can put your cash in SPRXX in the CMA for a higher yield. It will auto-liquidate to cover debits.
+1 This is what we do. Funds don't automatically deposit into SPRXX but are automatically liquidated.
Taking "risk" since 1995.

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