Fidelity Money Market Fund suggestions?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
User avatar
Topic Author
Third Son
Posts: 291
Joined: Tue Dec 03, 2019 7:05 pm
Location: North of Nowhere

Fidelity Money Market Fund suggestions?

Post by Third Son »

Bogleheads: I have $500K sitting in my core position (from a lump sum pension) in Fidelity in a tax advantaged account that I would like to keep in money market environment for the next couple of years. I am in retirement and currently have a 35/65 AA with Fidelity in two funds. When looking into the money market options, I noticed that the typical fund has an ER of 0.42 to 0.55. Am I missing something here? Should I maybe looking into alternatives? I currently own FSKAX (total market index fund) and FXNAX (US bond index fund) at Fidelity.
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon
User avatar
retired@50
Posts: 4084
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Fidelity Money Market Fund suggestions?

Post by retired@50 »

As far as money market funds go, the yield is the more telling statistic than the expense ratio since all yields are net of expenses.

I'm afraid you're in for a long wait if you hope to leave the money at Fidelity for two years in a money market fund.

SPAXX is currently paying .01% yield.

Most folks in your position would go to the trouble of finding an online savings account (or two if necessary) (Ally, Marcus, Capital One) that is currently paying around 1%.

Regards,
This is one person's opinion. Nothing more.
User avatar
Topic Author
Third Son
Posts: 291
Joined: Tue Dec 03, 2019 7:05 pm
Location: North of Nowhere

Re: Fidelity Money Market Fund suggestions?

Post by Third Son »

retired@50 wrote: Thu Jun 25, 2020 5:20 pm As far as money market funds go, the yield is the more telling statistic than the expense ratio since all yields are net of expenses.

I'm afraid you're in for a long wait if you hope to leave the money at Fidelity for two years in a money market fund.

SPAXX is currently paying .01% yield.

Most folks in your position would go to the trouble of finding an online savings account (or two if necessary) (Ally, Marcus, Capital One) that is currently paying around 1%.

Regards,
I need to keep the money tax advantaged for the distant future. Wouldn't moving the money to an online savings account require me to take the money out of tax advantaged status?
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon
User avatar
retired@50
Posts: 4084
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Fidelity Money Market Fund suggestions?

Post by retired@50 »

Third Son wrote: Thu Jun 25, 2020 5:23 pm
retired@50 wrote: Thu Jun 25, 2020 5:20 pm As far as money market funds go, the yield is the more telling statistic than the expense ratio since all yields are net of expenses.

I'm afraid you're in for a long wait if you hope to leave the money at Fidelity for two years in a money market fund.

SPAXX is currently paying .01% yield.

Most folks in your position would go to the trouble of finding an online savings account (or two if necessary) (Ally, Marcus, Capital One) that is currently paying around 1%.

Regards,
I need to keep the money tax advantaged for a while. Wouldn't moving the money to an online savings account require me to take the money out of tax advantaged status?
It would if you intend to move to an online savings account.

If your tax advantaged account is a brokerage type account that allows trading, you might be able to use some of the money to purchase a CD in the secondary market. If you do have trading capability in the account, maybe place a call to the Fidelity help desk and see if they can walk you though some of the basics of buying CDs inside your particular account type.

Regards,
This is one person's opinion. Nothing more.
User avatar
Topic Author
Third Son
Posts: 291
Joined: Tue Dec 03, 2019 7:05 pm
Location: North of Nowhere

Re: Fidelity Money Market Fund suggestions?

Post by Third Son »

retired@50 wrote: Thu Jun 25, 2020 5:26 pm
Third Son wrote: Thu Jun 25, 2020 5:23 pm
retired@50 wrote: Thu Jun 25, 2020 5:20 pm As far as money market funds go, the yield is the more telling statistic than the expense ratio since all yields are net of expenses.

I'm afraid you're in for a long wait if you hope to leave the money at Fidelity for two years in a money market fund.

SPAXX is currently paying .01% yield.

Most folks in your position would go to the trouble of finding an online savings account (or two if necessary) (Ally, Marcus, Capital One) that is currently paying around 1%.

Regards,
I need to keep the money tax advantaged for a while. Wouldn't moving the money to an online savings account require me to take the money out of tax advantaged status?
It would if you intend to move to an online savings account.

If your tax advantaged account is a brokerage type account that allows trading, you might be able to use some of the money to purchase a CD in the secondary market. If you do have trading capability in the account, maybe place a call to the Fidelity help desk and see if they can walk you though some of the basics of buying CDs inside your particular account type.

Regards,
Thanks for the reply. This money is in a tax deferred IRA. I should have mentioned that before.
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon
User avatar
anon_investor
Posts: 4271
Joined: Mon Jun 03, 2019 1:43 pm

Re: Fidelity Money Market Fund suggestions?

Post by anon_investor »

Third Son wrote: Thu Jun 25, 2020 5:42 pm
retired@50 wrote: Thu Jun 25, 2020 5:26 pm
Third Son wrote: Thu Jun 25, 2020 5:23 pm
retired@50 wrote: Thu Jun 25, 2020 5:20 pm As far as money market funds go, the yield is the more telling statistic than the expense ratio since all yields are net of expenses.

I'm afraid you're in for a long wait if you hope to leave the money at Fidelity for two years in a money market fund.

SPAXX is currently paying .01% yield.

Most folks in your position would go to the trouble of finding an online savings account (or two if necessary) (Ally, Marcus, Capital One) that is currently paying around 1%.

Regards,
I need to keep the money tax advantaged for a while. Wouldn't moving the money to an online savings account require me to take the money out of tax advantaged status?
It would if you intend to move to an online savings account.

If your tax advantaged account is a brokerage type account that allows trading, you might be able to use some of the money to purchase a CD in the secondary market. If you do have trading capability in the account, maybe place a call to the Fidelity help desk and see if they can walk you though some of the basics of buying CDs inside your particular account type.

Regards,
Thanks for the reply. This money is in a tax deferred IRA. I should have mentioned that before.
If you do not mind moving the money Ally Bank offers IRAs with FDIC insured high yield savings (currently 1.1%) and CDs with even higher rates.
User avatar
retired@50
Posts: 4084
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Fidelity Money Market Fund suggestions?

Post by retired@50 »

Third Son wrote: Thu Jun 25, 2020 5:42 pm
retired@50 wrote: Thu Jun 25, 2020 5:26 pm
Third Son wrote: Thu Jun 25, 2020 5:23 pm
retired@50 wrote: Thu Jun 25, 2020 5:20 pm As far as money market funds go, the yield is the more telling statistic than the expense ratio since all yields are net of expenses.

I'm afraid you're in for a long wait if you hope to leave the money at Fidelity for two years in a money market fund.

SPAXX is currently paying .01% yield.

Most folks in your position would go to the trouble of finding an online savings account (or two if necessary) (Ally, Marcus, Capital One) that is currently paying around 1%.

Regards,
I need to keep the money tax advantaged for a while. Wouldn't moving the money to an online savings account require me to take the money out of tax advantaged status?
It would if you intend to move to an online savings account.

If your tax advantaged account is a brokerage type account that allows trading, you might be able to use some of the money to purchase a CD in the secondary market. If you do have trading capability in the account, maybe place a call to the Fidelity help desk and see if they can walk you though some of the basics of buying CDs inside your particular account type.

Regards,
Thanks for the reply. This money is in a tax deferred IRA. I should have mentioned that before.
I'm not familiar with Fidelity, but I know that at Vanguard, it's possible to have a tax-deferred IRA that still allows "brokerage style trading". I guess it just depends on how your account is set up at Fidelity.

Regards,
This is one person's opinion. Nothing more.
User avatar
rkuklinski
Posts: 62
Joined: Fri Aug 24, 2012 12:03 pm

Re: Fidelity Money Market Fund suggestions?

Post by rkuklinski »

Ally has an IRA online savings account (https://www.ally.com/bank/ira/online-savings-account/). I am unable to locate a similar offering from Marcus. Perhaps other internet banks offer a similar IRA account as well.
'Who controls the past' ran the Party slogan, 'controls the future: who controls the present controls the past.'"
EnjoyIt
Posts: 5309
Joined: Sun Dec 29, 2013 8:06 pm

Re: Fidelity Money Market Fund suggestions?

Post by EnjoyIt »

Ally is currently running a brokerage promotion as well $1200 for $500k deposit. I’m not sure but maybe they will honor that deal for an IRA.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
User avatar
Topic Author
Third Son
Posts: 291
Joined: Tue Dec 03, 2019 7:05 pm
Location: North of Nowhere

Re: Fidelity Money Market Fund suggestions?

Post by Third Son »

I was hoping for a few more ideas. Thanks for those who responded.
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon
UpperNwGuy
Posts: 4547
Joined: Sun Oct 08, 2017 7:16 pm

Re: Fidelity Money Market Fund suggestions?

Post by UpperNwGuy »

Third Son wrote: Fri Jun 26, 2020 4:26 pm I was hoping for a few more ideas. Thanks for those who responded.
A few more ideas? You're asking the impossible. There are no more alternatives than the ideas that have been suggested to you. This is a bad time in the US economy to hold money in any form of "cash."
User avatar
corn18
Posts: 1857
Joined: Fri May 22, 2015 6:24 am

Re: Fidelity Money Market Fund suggestions?

Post by corn18 »

FZDXX is the best FIDO MM and it isn't great compared to an allied account. But that is what I use for short term savings in my brokerage account.
Don't do something, just stand there!
tony_roach
Posts: 117
Joined: Sun Nov 19, 2017 2:05 pm

Re: Fidelity Money Market Fund suggestions?

Post by tony_roach »

FZDXX is a higher yield money market with a 100k minimum deposit. Yield is still low relative to a few months ago.
informal guide
Posts: 371
Joined: Mon Aug 29, 2016 10:26 am

Re: Fidelity Money Market Fund suggestions?

Post by informal guide »

An ultra-safe choice is to buy individual treasury securities. - 3 mo is 0.152%, 6 mos. is 0 .175%, 1 yr is 0.168 as of this afternoon. Brokered CDs through Fidelity will give you similar to slightly more.

I believe Fidelity will let you set up auto reinvest at maturity so you are not out of the market.

Another option that has some interest rate risk but no credit risk is the Fidelity Short Term Treasury Bond Index - -current 30 day yield net of 0.03% expenses is 0.22% with a 2.66 year duration.
sycamore
Posts: 1520
Joined: Tue May 08, 2018 12:06 pm

Re: Fidelity Money Market Fund suggestions?

Post by sycamore »

Given that your IRA is a brokerage account, you could invest in some ultra-short and short-term bond funds.

There are several very short term options: NEAR, BIL, MINT, GSY, ICSH.

Some Vanguard short-term bond ETFs VGSH, VCSH, BSV have a duration between 2 - 3 years so a bit more duration risk.

Many of them dropped more than one might have expected back in March. So there's that.

They're not paying all that much more than some money market funds, so you'll have to investigate to see if their extra yield is worth the effort to you.
User avatar
Topic Author
Third Son
Posts: 291
Joined: Tue Dec 03, 2019 7:05 pm
Location: North of Nowhere

Re: Fidelity Money Market Fund suggestions?

Post by Third Son »

UpperNwGuy wrote: Fri Jun 26, 2020 4:34 pm
Third Son wrote: Fri Jun 26, 2020 4:26 pm I was hoping for a few more ideas. Thanks for those who responded.
A few more ideas? You're asking the impossible. There are no more alternatives than the ideas that have been suggested to you. This is a bad time in the US economy to hold money in any form of "cash."
Not necessarily true if you read the posts after yours. But thanks for chiming in.
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon
IowaFarmBoy
Posts: 875
Joined: Fri Jan 22, 2010 8:19 am

Re: Fidelity Money Market Fund suggestions?

Post by IowaFarmBoy »

Fidelity offers fixed annuities that can be used in a tax-advantaged account like an IRA. They currently have one from MassMutual that offers 1.85% for a jumbo (>$100k) for a 3 year commitment. These work kind of like a cd- you commit the money for 3 years and they guarantee an interest rate. The downside is that your money is locked up for 3 years with a 7% penalty for early withdrawal although they do let you pull out 10%/year and have some provisions for nursing home care, death, etc. You have no FDIC insurance and are relying on the financial strength of the insurance company.

In today's environment, that is a great interest rate but you need to be aware of the loss of liquidity and the reliance on insurance company's financial position.
drzzzzz
Posts: 593
Joined: Sat Sep 22, 2012 9:56 pm

Re: Fidelity Money Market Fund suggestions?

Post by drzzzzz »

tony_roach wrote: Fri Jun 26, 2020 4:42 pm FZDXX is a higher yield money market with a 100k minimum deposit. Yield is still low relative to a few months ago.
FZDXX has a lower minimum deposit in an IRA, I think it is 10K
User avatar
JoMoney
Posts: 10513
Joined: Tue Jul 23, 2013 5:31 am

Re: Fidelity Money Market Fund suggestions?

Post by JoMoney »

retired@50 wrote: Thu Jun 25, 2020 5:48 pm
Third Son wrote: Thu Jun 25, 2020 5:42 pm
retired@50 wrote: Thu Jun 25, 2020 5:26 pm
Third Son wrote: Thu Jun 25, 2020 5:23 pm
retired@50 wrote: Thu Jun 25, 2020 5:20 pm As far as money market funds go, the yield is the more telling statistic than the expense ratio since all yields are net of expenses.

I'm afraid you're in for a long wait if you hope to leave the money at Fidelity for two years in a money market fund.

SPAXX is currently paying .01% yield.

Most folks in your position would go to the trouble of finding an online savings account (or two if necessary) (Ally, Marcus, Capital One) that is currently paying around 1%.

Regards,
I need to keep the money tax advantaged for a while. Wouldn't moving the money to an online savings account require me to take the money out of tax advantaged status?
It would if you intend to move to an online savings account.

If your tax advantaged account is a brokerage type account that allows trading, you might be able to use some of the money to purchase a CD in the secondary market. If you do have trading capability in the account, maybe place a call to the Fidelity help desk and see if they can walk you though some of the basics of buying CDs inside your particular account type.

Regards,
Thanks for the reply. This money is in a tax deferred IRA. I should have mentioned that before.
I'm not familiar with Fidelity, but I know that at Vanguard, it's possible to have a tax-deferred IRA that still allows "brokerage style trading". I guess it just depends on how your account is set up at Fidelity.

Regards,
You can buy brokered CD's in a Fidelity IRA. You just got to the "Trade" option, choose "Fixed Income", "Search Inventory", and then under the CD's tab you can view either 'secondary' or 'new issue' CD's.
OP needs to realized though that while marketable CD's are usually FDIC insured, and will return principal at maturity, they can fluctuate in their current market value.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
missedit
Posts: 24
Joined: Tue Aug 30, 2016 2:20 pm

Re: Fidelity Money Market Fund suggestions?

Post by missedit »

I just looked up FZDXX according to summary page
Exp Ratio (gross): 0.37%
Exp Ratio (Net): 0.3%
7 day yield (as of 5/31/20): 0.17%
the yield now is likely much lower.
Does this mean this has a net negative yield (after expenses?)
nix4me
Posts: 853
Joined: Sat Oct 13, 2018 9:32 am

Re: Fidelity Money Market Fund suggestions?

Post by nix4me »

Gotta take more risk to get any return.
Ultra short bond funds such as:
JPST
VUBFX
ICSH
GST
SHV

There are many...
User avatar
retired@50
Posts: 4084
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Fidelity Money Market Fund suggestions?

Post by retired@50 »

missedit wrote: Sat Jun 27, 2020 9:51 am
Does this mean this has a net negative yield (after expenses?)
No.
Published yields are net of expenses.
In other words, no addition or subtraction is needed to know the yield.

Regards,
This is one person's opinion. Nothing more.
Aaabbbccc
Posts: 9
Joined: Mon Sep 16, 2019 11:54 am

Re: Fidelity Money Market Fund suggestions?

Post by Aaabbbccc »

Not a MM but FCONX has 1% yields and < 1 yr wtd maturity
User avatar
travelogue
Posts: 255
Joined: Sat Aug 12, 2017 4:29 pm

Re: Fidelity Money Market Fund suggestions?

Post by travelogue »

nix4me wrote: Sat Jun 27, 2020 10:01 am Gotta take more risk to get any return.
Ultra short bond funds such as:
JPST
VUBFX
ICSH
GST
SHV

There are many...
This was going to be my suggestion. I split a part of my eFund, which I hold at Vanguard, into JPST and ISCH. They are subject to some volatility (but so far not too much) during extreme market conditions, but JPST currently has a 30 day SEC yield of 1.35% compared with VMFXX at a 7 day SEC yield of 0.12%.
Post Reply