Fidelity as a one stop shop

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Spirit Rider
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Re: Fidelity as a one stop shop

Post by Spirit Rider »

Kevin M wrote: Sun Dec 22, 2019 7:34 pm
Spirit Rider wrote: Sat Dec 21, 2019 9:31 pm
MotoTrojan wrote: Sat Dec 21, 2019 7:21 pm Sounds like you are covered but just an fyi that Fidelity isn't limiting you via $1K minimum on treasuries, that is the value of one bill/bond and thus a minimum for anyone. You actually will receive $1K at maturity, so you pay slightly less with the difference being your interest earned.
This is not true. Since 4/7/2008 Treasuries have been available in $100 increments. Fidelity may have a $1,000 minimum, but Treasury Direct does not.
Do you know of any other broker who sells Treasuries in increments smaller than $1K face value? TD is not a broker--things work very differently at TD (you can also buy savings bonds there, but not at a broker). The other two brokers I've used to buy and sell Treasuries, Vanguard and Schwab, also sell in increments of $1K face value. All three of these brokers sell one bond as $1K of face value. So I think what MotoTrojan said is correct for brokers and in the context of this thread--I doubt anyone will make an argument for using TD as a one stop shop.
My post was in direct reply to @MotoTrojan's statement. Fidelity is instituting an arbitrary $1,000 minimum, that is not the minimum value of one bill/bond. What any other broker is doing is irrelevant to the statement. As is whether it is in context of a one-stop shop or not. Whether you think it is applicable to the discussion or not. Many people are lurking threads for information to use in other circumstances. It is always useful to know what the details are when it comes to investments.
jumbopapa
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Re: Fidelity as a one stop shop

Post by jumbopapa »

Applied for the Fidelity Visa and I was pleasantly surprised that they approved me with a $20k limit. I'm in my early 20s, have a modest portfolio, and decent income, but it seemed like a fairly high limit.

I used to open a bunch of credit cards and care which card had the highest amount of reward points at any given store, but that seems like more work than it was worth now. I will primarily use the Fidelity Visa and buy ETFs with all reward points.
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petercooperjr
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Re: Fidelity as a one stop shop

Post by petercooperjr »

boston10 wrote: Sun Dec 22, 2019 8:22 pm My point is that the liquidity of that particular instrument (SHV) is not actually backed or guaranteed by any institution - it's traded on an open market with market-driven bid/ask spreads.

In contrast, with a direct Treasury bond, your ability to redeem at a known price is backed directly by the federal government.
This is just me being a bit pedantic, but just to be clear, when buying Treasury bills/notes/bonds your ability to redeem at maturity is backed directly by the federal government. The liquidity, as in being able to get your money out whenever you happen to want to, isn't backed by the government but the securities are just traded on an open market with market-driven bid/ask spreads.

Now as liquidity and trading, and thereby quickly finding a buyer when you want to sell, yeah there's not really anything any better than plain-old traditional nominal treasuries. But even though it's a large market, they government doesn't really back it "directly" other than their promises to pay the coupons out and the principal at maturity.

And for the treasuries that are even slightly unusual, like TIPS and FRNs, the liquidity isn't always there when you might need it.

But I'm certainly a big fan of short-term treasury bills for short-term savings, and use them in my Fidelity Cash Management Account.
bck63
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Re: Fidelity as a one stop shop

Post by bck63 »

petercooperjr wrote: Mon Dec 23, 2019 9:54 am
boston10 wrote: Sun Dec 22, 2019 8:22 pm My point is that the liquidity of that particular instrument (SHV) is not actually backed or guaranteed by any institution - it's traded on an open market with market-driven bid/ask spreads.

In contrast, with a direct Treasury bond, your ability to redeem at a known price is backed directly by the federal government.
This is just me being a bit pedantic, but just to be clear, when buying Treasury bills/notes/bonds your ability to redeem at maturity is backed directly by the federal government. The liquidity, as in being able to get your money out whenever you happen to want to, isn't backed by the government but the securities are just traded on an open market with market-driven bid/ask spreads.

Now as liquidity and trading, and thereby quickly finding a buyer when you want to sell, yeah there's not really anything any better than plain-old traditional nominal treasuries. But even though it's a large market, they government doesn't really back it "directly" other than their promises to pay the coupons out and the principal at maturity.

And for the treasuries that are even slightly unusual, like TIPS and FRNs, the liquidity isn't always there when you might need it.

But I'm certainly a big fan of short-term treasury bills for short-term savings, and use them in my Fidelity Cash Management Account.
Can you tell me if I'm on track with this? With even an ultra short-term corporate ETF, in a financial crisis there may be a flight to safety (treasuries). Therefore, people would sell the corporate fund. The number of sellers go up, but the number of buyers go down because people are going into treasuries and the demand for corporate bonds is decreased. Therefore, the spread increases due to the effects of supply and demand. On the treasury side, if I own an ultra-short term etf, I should be fine in a crisis and I needed to liquidate some shares, because there will likely be lots of buyers. Is that accurate? Or accurate enough?
Minty
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Re: Fidelity as a one stop shop

Post by Minty »

boston10 wrote: Sun Dec 22, 2019 7:39 pm
Minty wrote: Wed Dec 18, 2019 11:42 pm
ecbxqxjy wrote: Tue Nov 12, 2019 4:44 pm
heartwood wrote: Mon Nov 11, 2019 8:48 am I did call Fidelity last week and asked to either have an ATM-only card, or have my purchase/cash advance limits reduced to $1 each. The rep noted he'd never heard of anyone wanting to reduce their limits. I spent some time on hold while he queried others, then said he'd submit a request upward to see if it could be done and I should check back in 24 - 48 hrs.

Your mileage may vary, but apparently there is no ATM only card, no way to reduce limits. :oops:
What I'm doing as an extra measure of security on the debit card is keeping it locked, I think this is a newer feature based on the note on the Manage Cash page. Since we only use it for very rare ATM withdrawals, all I have to do is unlock it prior to that.
After some long conversations today, I learned the debit cards can be locked online, unlocked by phone (although not by app) for individual ATM withdrawals, and then immediately locked again. I prefer to never, ever use debit cards, both because of the risk of fraud and the forfeiture of credit card bonuses and protections. But leaving the debit card locked except for the few times a year I want to withdraw cash seems to be a reasonably safe alternative.
I also prefer to use credit cards because of the bonuses and protections, but let's be sure we're properly representing the fraud risk here. The risk of fraud is a maximum of $50 under the Uniform Commercial Code. My bet is that most institutions don't actually charge that $50 in the event of fraud and just fully reimburse you. There's a "hassle" risk to fraud in having a debit card, but there isn't a material financial risk.
I had several thousand drained in 2001, and a few hundred this year. Both times, it was reimbursed in real time. What I fear is (1) bounced payments, or (2) a business decision to deny that the theft was fraud and/or accuse me of negligence. I am not talking about Fidelity in particular now; but if someone drained out $50 or $100K from an account at any financial institution, they might be tempted to quibble. I am totally willing to do my part by (1) not using the debit card or cash advance features at all, (2) limiting ATM withdrawals to a few hundred per day, and (3) paying close attention to new bank accounts added to the account. OTOH, it must be the case that the banks have a lot of confidence in their AI algorithms, or that they make so much money from the debit card (compared to the 2% cash back credit card) that they are happy to eat a lot of fraud. BTW, thanks to the Boglehead who mentioned that B of A still has ATM cards; so does Chase.
Core Four w/ nominal bonds & TIPS. Refi Rampage: Purchase: 4.125% 30 -> R1 3% 20 -> R2 2.375% 15 -> R3 locked 1.99% 15
bck63
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Re: Fidelity as a one stop shop

Post by bck63 »

Minty wrote: Mon Dec 23, 2019 11:06 pm I had several thousand drained in 2001, and a few hundred this year. Both times, it was reimbursed in real time. What I fear is (1) bounced payments, or (2) a business decision to deny that the theft was fraud and/or accuse me of negligence. I am not talking about Fidelity in particular now; but if someone drained out $50 or $100K from an account at any financial institution, they might be tempted to quibble. I am totally willing to do my part by (1) not using the debit card or cash advance features at all, (2) limiting ATM withdrawals to a few hundred per day, and (3) paying close attention to new bank accounts added to the account. OTOH, it must be the case that the banks have a lot of confidence in their AI algorithms, or that they make so much money from the debit card (compared to the 2% cash back credit card) that they are happy to eat a lot of fraud. BTW, thanks to the Boglehead who mentioned that B of A still has ATM cards; so does Chase.
Thanks for sharing this. I think this could be another reason why I like to keep just enough in a MMF in my CMA account for bi-weekly expenses, and all the rest in an ultra-short term treasury ETF. I don't think they can get at the ETF by fraudulently debiting funds.
Ferdinand2014
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Re: Fidelity as a one stop shop

Post by Ferdinand2014 »

bck63 wrote: Tue Dec 24, 2019 6:49 am
Minty wrote: Mon Dec 23, 2019 11:06 pm I had several thousand drained in 2001, and a few hundred this year. Both times, it was reimbursed in real time. What I fear is (1) bounced payments, or (2) a business decision to deny that the theft was fraud and/or accuse me of negligence. I am not talking about Fidelity in particular now; but if someone drained out $50 or $100K from an account at any financial institution, they might be tempted to quibble. I am totally willing to do my part by (1) not using the debit card or cash advance features at all, (2) limiting ATM withdrawals to a few hundred per day, and (3) paying close attention to new bank accounts added to the account. OTOH, it must be the case that the banks have a lot of confidence in their AI algorithms, or that they make so much money from the debit card (compared to the 2% cash back credit card) that they are happy to eat a lot of fraud. BTW, thanks to the Boglehead who mentioned that B of A still has ATM cards; so does Chase.
Thanks for sharing this. I think this could be another reason why I like to keep just enough in a MMF in my CMA account for bi-weekly expenses, and all the rest in an ultra-short term treasury ETF. I don't think they can get at the ETF by fraudulently debiting funds.
Just buy 1 month T-bills (4 week zero coupon treasury bill) from Fidelity and use auto-roll feature. As liquid as an ETF (sells and credited M-F 8-5 within seconds for use as cash). Zero expense. Can't be debited like a MMF. Zero counter party risk. Safest investment in the world.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
bck63
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Re: Fidelity as a one stop shop

Post by bck63 »

Ferdinand2014 wrote: Tue Dec 24, 2019 11:11 pm
bck63 wrote: Tue Dec 24, 2019 6:49 am
Minty wrote: Mon Dec 23, 2019 11:06 pm I had several thousand drained in 2001, and a few hundred this year. Both times, it was reimbursed in real time. What I fear is (1) bounced payments, or (2) a business decision to deny that the theft was fraud and/or accuse me of negligence. I am not talking about Fidelity in particular now; but if someone drained out $50 or $100K from an account at any financial institution, they might be tempted to quibble. I am totally willing to do my part by (1) not using the debit card or cash advance features at all, (2) limiting ATM withdrawals to a few hundred per day, and (3) paying close attention to new bank accounts added to the account. OTOH, it must be the case that the banks have a lot of confidence in their AI algorithms, or that they make so much money from the debit card (compared to the 2% cash back credit card) that they are happy to eat a lot of fraud. BTW, thanks to the Boglehead who mentioned that B of A still has ATM cards; so does Chase.
Thanks for sharing this. I think this could be another reason why I like to keep just enough in a MMF in my CMA account for bi-weekly expenses, and all the rest in an ultra-short term treasury ETF. I don't think they can get at the ETF by fraudulently debiting funds.
Just buy 1 month T-bills (4 week zero coupon treasury bill) from Fidelity and use auto-roll feature. As liquid as an ETF (sells and credited M-F 8-5 within seconds for use as cash). Zero expense. Can't be debited like a MMF. Zero counter party risk. Safest investment in the world.
Thanks Ferdinand. What would I do? Save up $1000 in my CMA and then make the purchase at auction. I save about $1K biweekly, but some of that is stocks and bonds. There is no way around the $1K minimum purchase?
Ferdinand2014
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Re: Fidelity as a one stop shop

Post by Ferdinand2014 »

bck63 wrote: Wed Dec 25, 2019 6:33 am
Ferdinand2014 wrote: Tue Dec 24, 2019 11:11 pm
bck63 wrote: Tue Dec 24, 2019 6:49 am
Minty wrote: Mon Dec 23, 2019 11:06 pm I had several thousand drained in 2001, and a few hundred this year. Both times, it was reimbursed in real time. What I fear is (1) bounced payments, or (2) a business decision to deny that the theft was fraud and/or accuse me of negligence. I am not talking about Fidelity in particular now; but if someone drained out $50 or $100K from an account at any financial institution, they might be tempted to quibble. I am totally willing to do my part by (1) not using the debit card or cash advance features at all, (2) limiting ATM withdrawals to a few hundred per day, and (3) paying close attention to new bank accounts added to the account. OTOH, it must be the case that the banks have a lot of confidence in their AI algorithms, or that they make so much money from the debit card (compared to the 2% cash back credit card) that they are happy to eat a lot of fraud. BTW, thanks to the Boglehead who mentioned that B of A still has ATM cards; so does Chase.
Thanks for sharing this. I think this could be another reason why I like to keep just enough in a MMF in my CMA account for bi-weekly expenses, and all the rest in an ultra-short term treasury ETF. I don't think they can get at the ETF by fraudulently debiting funds.
Just buy 1 month T-bills (4 week zero coupon treasury bill) from Fidelity and use auto-roll feature. As liquid as an ETF (sells and credited M-F 8-5 within seconds for use as cash). Zero expense. Can't be debited like a MMF. Zero counter party risk. Safest investment in the world.
Thanks Ferdinand. What would I do? Save up $1000 in my CMA and then make the purchase at auction. I save about $1K biweekly, but some of that is stocks and bonds. There is no way around the $1K minimum purchase?
$1,000 is the minimum purchase. T-bills of 4,8 week are every Tuesday and 13,26 week are every Thursday.

https://www.treasury.gov/resource-cente ... ctions.pdf

https://www.fidelity.com/learning-cente ... ages-video

I go to news and research>fixed income>New issues>treasuries>Zero coupon treasury with 1 month maturity>click box and then you trade like any other security. You pick how many you wish to purchase 1 = $1,000 and I always click auto-roll box so it automatically rolls into a new t-bill. The 1 month treasury will only show up when available on Tuesday until Thursday when the auction happens. It settles the following Monday. You can redeem at any point m-f between normal business hours. It will give you cash credit within a few seconds like an etf, but settles in 1-2 days depending on the time you sell similar to an etf. I have only purchased at auction. I have never bothered using the secondary market except on the rare occasion I needed some cash before maturity. More of a hassle then an etf or mutual fund, but like the zero cost and expense ratio, high liquidity, as well as lack of counterparty risk. Rate is typically about 30 basis points higher then Fidelity MMF.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
bck63
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Re: Fidelity as a one stop shop

Post by bck63 »

Ferdinand2014 wrote: Wed Dec 25, 2019 7:29 am
bck63 wrote: Wed Dec 25, 2019 6:33 am
Ferdinand2014 wrote: Tue Dec 24, 2019 11:11 pm
bck63 wrote: Tue Dec 24, 2019 6:49 am
Minty wrote: Mon Dec 23, 2019 11:06 pm I had several thousand drained in 2001, and a few hundred this year. Both times, it was reimbursed in real time. What I fear is (1) bounced payments, or (2) a business decision to deny that the theft was fraud and/or accuse me of negligence. I am not talking about Fidelity in particular now; but if someone drained out $50 or $100K from an account at any financial institution, they might be tempted to quibble. I am totally willing to do my part by (1) not using the debit card or cash advance features at all, (2) limiting ATM withdrawals to a few hundred per day, and (3) paying close attention to new bank accounts added to the account. OTOH, it must be the case that the banks have a lot of confidence in their AI algorithms, or that they make so much money from the debit card (compared to the 2% cash back credit card) that they are happy to eat a lot of fraud. BTW, thanks to the Boglehead who mentioned that B of A still has ATM cards; so does Chase.
Thanks for sharing this. I think this could be another reason why I like to keep just enough in a MMF in my CMA account for bi-weekly expenses, and all the rest in an ultra-short term treasury ETF. I don't think they can get at the ETF by fraudulently debiting funds.
Just buy 1 month T-bills (4 week zero coupon treasury bill) from Fidelity and use auto-roll feature. As liquid as an ETF (sells and credited M-F 8-5 within seconds for use as cash). Zero expense. Can't be debited like a MMF. Zero counter party risk. Safest investment in the world.
Thanks Ferdinand. What would I do? Save up $1000 in my CMA and then make the purchase at auction. I save about $1K biweekly, but some of that is stocks and bonds. There is no way around the $1K minimum purchase?
$1,000 is the minimum purchase. T-bills of 4,8 week are every Tuesday and 13,26 week are every Thursday.

https://www.treasury.gov/resource-cente ... ctions.pdf

https://www.fidelity.com/learning-cente ... ages-video

I go to news and research>fixed income>New issues>treasuries>Zero coupon treasury with 1 month maturity>click box and then you trade like any other security. You pick how many you wish to purchase 1 = $1,000 and I always click auto-roll box so it automatically rolls into a new t-bill. The 1 month treasury will only show up when available on Tuesday until Thursday when the auction happens. It settles the following Monday. You can redeem at any point m-f between normal business hours. It will give you cash credit within a few seconds like an etf, but settles in 1-2 days depending on the time you sell similar to an etf. I have only purchased at auction. I have never bothered using the secondary market except on the rare occasion I needed some cash before maturity. More of a hassle then an etf or mutual fund, but like the zero cost and expense ratio, high liquidity, as well as lack of counterparty risk. Rate is typically about 30 basis points higher then Fidelity MMF.
Thanks. Happy Holidays!
jeremyl
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Re: Fidelity as a one stop shop

Post by jeremyl »

I just opened my fidelity cma/brokerage account and I want to make sure I set this up correctly. I have the cma account as my checking and the core position is SPAXX. When my paycheck gets deposited to this account will it automatically be in that money market fund? Thus, earning the yield it provides on my checking. Is this correct?

Basically, I’m wanting to get the higher yield on my checking account and run most of my banking needs through here.
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JoMoney
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Re: Fidelity as a one stop shop

Post by JoMoney »

jeremyl wrote: Sat Dec 28, 2019 7:22 am I just opened my fidelity cma/brokerage account and I want to make sure I set this up correctly. I have the cma account as my checking and the core position is SPAXX. When my paycheck gets deposited to this account will it automatically be in that money market fund? Thus, earning the yield it provides on my checking. Is this correct?

Basically, I’m wanting to get the higher yield on my checking account and run most of my banking needs through here.
The CMA account is a brokerage account, but I'm guessing from the way you worded it you opened both a CMA and a separate traditional brokerage account with different account numbers.
In your CMA account the FDIC insured bank deposit account is your "core" position / sweep account, and you can't change that.
If you direct deposit to the CMA account, the money will go into the bank sweep account, and you'll have to manually move/trade it into the MM fund.

If you have a separate brokerage account that has the money market fund as your core/sweep and you direct deposit to that account number, that's where the money will go.... but unless you've linked your brokerage account to the CMA for overdraft protection, you won't be able to access that money from the CMA billpay, ATM etc..

For myself, I just use the single CMA account and manually move/buy a MM fund after money gets transferred in. Fidelity automatically uses the MM fund as overdraft to the default bank sweep account without having to have a separate brokerage account and linking them.

Do you have TWO accounts (with different account numbers), or just the CMA account (which has the FDIC bank as the 'core position' ) ?
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
jeremyl
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Location: Indiana

Re: Fidelity as a one stop shop

Post by jeremyl »

JoMoney wrote: Sat Dec 28, 2019 7:37 am
jeremyl wrote: Sat Dec 28, 2019 7:22 am I just opened my fidelity cma/brokerage account and I want to make sure I set this up correctly. I have the cma account as my checking and the core position is SPAXX. When my paycheck gets deposited to this account will it automatically be in that money market fund? Thus, earning the yield it provides on my checking. Is this correct?

Basically, I’m wanting to get the higher yield on my checking account and run most of my banking needs through here.
The CMA account is a brokerage account, but I'm guessing from the way you worded it you opened both a CMA and a separate traditional brokerage account with different account numbers.
In your CMA account the FDIC insured bank deposit account is your "core" position / sweep account, and you can't change that.
If you direct deposit to the CMA account, the money will go into the bank sweep account, and you'll have to manually move/trade it into the MM fund.

If you have a separate brokerage account that has the money market fund as your core/sweep and you direct deposit to that account number, that's where the money will go.... but unless you've linked your brokerage account to the CMA for overdraft protection, you won't be able to access that money from the CMA billpay, ATM etc..

For myself, I just use the single CMA account and manually move/buy a MM fund after money gets transferred in. Fidelity automatically uses the MM fund as overdraft to the default bank sweep account without having to have a separate brokerage account and linking them.

Do you have TWO accounts (with different account numbers), or just the CMA account (which has the FDIC bank as the 'core position' ) ?
I have 2 accounts with 2 different account numbers. I turned in my direct deposit form for my paycheck to go to the cma account.
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JoMoney
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Re: Fidelity as a one stop shop

Post by JoMoney »

jeremyl wrote: Sat Dec 28, 2019 8:24 am ...
I have 2 accounts with 2 different account numbers. I turned in my direct deposit form for my paycheck to go to the cma account.
Then your direct deposit will go into the FDIC bank deposit account (core for CMA).
You can then (manually) trade those funds inside the CMA to buy SPAXX (or another MM fund) inside the CMA account, and that money will still be available for Bill Pay/ATM/etc...
Or you can transfer the money to your other brokerage account... but depending on how you have it setup, that money may not be available for Bill Pay/ATM etc.. after the transfer.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
hornet74
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Re: Fidelity as a one stop shop

Post by hornet74 »

BogleMelon wrote: Sat Dec 15, 2018 9:33 pm I am thinking of moving my Roth (currently at Vanguard), Charles Schwab checking and Ally saving all to Fidelity to simplify my life.
My 3 questions are:
1- How to do such setup in Fido to maintain the same privileges as Charles and Ally? In other words how to have an alternative to checking with all the free ATM's, salary deposit..etc and earn interest in the same time with a simple setup?
2- What things I have to keep in mind to roll my Roth IRA's? (Am I limited to certain amount of rollovers per year for example?)
3- Is there any disadvantage to this setup vs my current one?

Thanks!
I just finished moving everything to fidelity, well, almost everything. While they don't have the best banking interface, I love the convenance of having everything under one portal. I have the CC with 2% cash back, CMA account and retirement in one spot. The ability to purchase stocks conveniently and move money instantly is worth it.

So to answer (a little late)
1) Easy set up, takes a few weeks to get everything though, the debit and cc cart as well as checks
2) Super simple, moved 6k from checking to ira and then they auto roll in to Roth IRA.
3) For me it was worth it, super easy and convenient. Hassle was updating all the auto pays and such.
jumbopapa
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Re: Fidelity as a one stop shop

Post by jumbopapa »

JoMoney wrote: Sat Dec 28, 2019 8:42 am Then your direct deposit will go into the FDIC bank deposit account (core for CMA).
You can then (manually) trade those funds inside the CMA to buy SPAXX (or another MM fund) inside the CMA account, and that money will still be available for Bill Pay/ATM/etc...
Or you can transfer the money to your other brokerage account... but depending on how you have it setup, that money may not be available for Bill Pay/ATM etc.. after the transfer.
I currently use the brokerage account as my main account and just keep the CMA at $0. It's my understanding that the ATM doesn't work in the CMA even with overdraft, is that correct? Maybe I should switch from using the brokerage as my main account to using the CMA and I can just buy SPAXX when deposits are made.
ScaledWheel
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Re: Fidelity as a one stop shop

Post by ScaledWheel »

jumbopapa wrote: Sun Jan 05, 2020 9:56 pm I currently use the brokerage account as my main account and just keep the CMA at $0. It's my understanding that the ATM doesn't work in the CMA even with overdraft, is that correct? Maybe I should switch from using the brokerage as my main account to using the CMA and I can just buy SPAXX when deposits are made.
I have my debit card linked to the CMA (at $0) and it works at ATMs without issues assuming overdraft is enabled.
ChrisBenn
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Re: Fidelity as a one stop shop

Post by ChrisBenn »

jumbopapa wrote: Sun Jan 05, 2020 9:56 pm
JoMoney wrote: Sat Dec 28, 2019 8:42 am Then your direct deposit will go into the FDIC bank deposit account (core for CMA).
You can then (manually) trade those funds inside the CMA to buy SPAXX (or another MM fund) inside the CMA account, and that money will still be available for Bill Pay/ATM/etc...
Or you can transfer the money to your other brokerage account... but depending on how you have it setup, that money may not be available for Bill Pay/ATM etc.. after the transfer.
I currently use the brokerage account as my main account and just keep the CMA at $0. It's my understanding that the ATM doesn't work in the CMA even with overdraft, is that correct? Maybe I should switch from using the brokerage as my main account to using the CMA and I can just buy SPAXX when deposits are made.
I can conform that ATM works fine with overdraft (ATM on CMA, 0 balance, overdraft from linked brokerage account). I've used this for about 6 months now without issue.
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SagaciousTraveler
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Re: Fidelity as a one stop shop

Post by SagaciousTraveler »

Noimagination wrote: Tue Jul 02, 2019 3:43 pm
SagaciousTraveler wrote: Wed Dec 19, 2018 11:50 am Credit Card: The 2% card isn't' for me. I have the Citi Double and like you said, its my baseline card used when my others aren't.

Bank: We don't take on debt, all we used our Credit Union for was Bill Pay, Checks, Direct Deposit and ATM. So moving from our Credit Union to Fidelity actually helped us due to more ATM options and Branches.

Accounts: We had four accounts at Vanguard, we now have four accounts at fidelity. There is literally very little downside here as the funds we are invested in all have low expense fees across all the investment firms. The only thing I saw that Vanguard was better was the settlement fund. Fidelity i believe is 1.97% while Vanguard is 2.15%ish. Nothing to lose sleep over.

I also mentioned in another post that the consolidation makes it easier on my wife if something were to happen to me.

In conclusion I do not agree with your blanket statement that consolidation is inferior. For my family, it was an upgrade. However, I will agree that its not for everyone's situation.

Thanks.
Has anybody else run into issues trying to autopay their Citibank credit cards (i.e. Double Cash 2% cash back card) using a Fidelity CMA account? I haven't been able to get this working, but I can pay my Chase credit cards without any issues. When I spoke to the Citi rep they said it was because the CMA account was coding as a savings account, not a checking account, and they don't allow autopay with savings accounts. Fidelity didn't have any solutions to this problem. This is the only issue preventing me from closing my old checking account and completely consolidating with Fidelity.
I have not run into any issues with citi double or citi Costco. Did you get this resolved?
MisterBill
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Re: Fidelity as a one stop shop

Post by MisterBill »

SagaciousTraveler wrote: Sun Jan 12, 2020 8:02 am
Noimagination wrote: Tue Jul 02, 2019 3:43 pm Has anybody else run into issues trying to autopay their Citibank credit cards (i.e. Double Cash 2% cash back card) using a Fidelity CMA account? I haven't been able to get this working, but I can pay my Chase credit cards without any issues. When I spoke to the Citi rep they said it was because the CMA account was coding as a savings account, not a checking account, and they don't allow autopay with savings accounts. Fidelity didn't have any solutions to this problem. This is the only issue preventing me from closing my old checking account and completely consolidating with Fidelity.
I have not run into any issues with citi double or citi Costco. Did you get this resolved?
Also wonder if they are using the long or short version of the account number. I'd try the other one and see if anything changes. I do Citi Autopay from Fidelity and it works fine. I'm pretty sure I use the long version of the account number (starts with 7710).
corp_sharecropper
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Re: Fidelity as a one stop shop

Post by corp_sharecropper »

I made it to page 6 and finally realized I would be very disappointed if I made it all the way through this topic without finding the info I was hoping to find... So apologies if this is discussed at some point after page 6.

I notice a lot of people seem to have things setup where their direct deposits go to the brokerage account, they keep the CMA at $0, set the brokerage as overdraft, and do all their debit/ATM/check writing from, at least in terms of account number, the CMA (in practice the funds covering these debits are the brokerage overdraft funds).

This confuses, in part because from everything on the Fidelity website seems to indicate that this is quite opposite of how they designed the accounts to work. Honestly, from my VERY limited understanding, Fidelity's "intention" makes more sense (depending on answers to a few questions).

From what I gather, Fidelity envisions that you use the CMA exactly like you would a checking account (ie. paychecks direct deposited, pay bills, ATM withdrawals, debit card purchases, etc...). You also setup some cash management rules, specifically min/max bounds on the balance amount. Say you have some unexpected purchases that drop your balance below what you deem to be a safe amount and funds in your brokerage will liquidate to bring the CMA balance back within your preset guard rails. Conversely, let's say you don't always spend every last cent that you earn and thus your balance increases overtime. Then, your balance eventually goes over your preset max limit and the extra funds are automatically transferred to your brokerage account.

My first question... Is the preceding information correct?

Now, assuming it is largely or entirely correct, which it might not, I have a few more questions..

1) in practice, what exactly would be the difference between a minimum balance limit and overdraft from the brokerage account?

2) when the CMA maximum is breeched, can the funds that xfer to the brokerage be automatically invested in things other than the core fund?

3) why is $0 CMA + brokerage overdraft more appealing to some people? It doesn't sound like it's firewalling anything at all except non-MM investments? Conversely, I think you can set only a maximum guard rail rule on the CMA and have it be a 1-way street for automatic transfers, CMA>Brokerage, right?

I think that's all I got, looking forward to reading responses.
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sarabayo
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Re: Fidelity as a one stop shop

Post by sarabayo »

corp_sharecropper wrote: Thu Jan 16, 2020 10:50 pm I made it to page 6 and finally realized I would be very disappointed if I made it all the way through this topic without finding the info I was hoping to find... So apologies if this is discussed at some point after page 6.

I notice a lot of people seem to have things setup where their direct deposits go to the brokerage account, they keep the CMA at $0, set the brokerage as overdraft, and do all their debit/ATM/check writing from, at least in terms of account number, the CMA (in practice the funds covering these debits are the brokerage overdraft funds).

This confuses, in part because from everything on the Fidelity website seems to indicate that this is quite opposite of how they designed the accounts to work. Honestly, from my VERY limited understanding, Fidelity's "intention" makes more sense (depending on answers to a few questions).

From what I gather, Fidelity envisions that you use the CMA exactly like you would a checking account (ie. paychecks direct deposited, pay bills, ATM withdrawals, debit card purchases, etc...). You also setup some cash management rules, specifically min/max bounds on the balance amount. Say you have some unexpected purchases that drop your balance below what you deem to be a safe amount and funds in your brokerage will liquidate to bring the CMA balance back within your preset guard rails. Conversely, let's say you don't always spend every last cent that you earn and thus your balance increases overtime. Then, your balance eventually goes over your preset max limit and the extra funds are automatically transferred to your brokerage account.

My first question... Is the preceding information correct?
Yes, quite correct. That is what Fidelity "intends" us to do. And the reason they intend us to do it that way is because then they can get away with paying us low interest rates on our cash :) The default sweep in a brokerage account is SPAXX, which pays much more than the partner bank account sweep you're forced to use in the CMA. That's the main reason I do it the convoluted way, keeping $0 in the CMA.
baliktad
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Re: Fidelity as a one stop shop

Post by baliktad »

corp_sharecropper wrote: Thu Jan 16, 2020 10:50 pm Conversely, let's say you don't always spend every last cent that you earn and thus your balance increases overtime. Then, your balance eventually goes over your preset max limit and the extra funds are automatically transferred to your brokerage account.

My first question... Is the preceding information correct?
No. There is no automatic transfer of 'excess' funds from the Fidelity CMA to a brokerage or any other account. Read Fidelity's description carefully: they will send you an alert, but not transfer any funds out:
Receive alerts
Once you open an account, simply set up a minimum and maximum target balance and a minimum transfer amount. Whenever your balance exceeds your maximum, an alert reminds you to invest the extra cash. If your balance drops below your minimum, available cash will be automatically transferred from one of your designated funding accounts.
See the description and video on this page: https://www.fidelity.com/cash-managemen ... sh-manager
corp_sharecropper wrote: Thu Jan 16, 2020 10:50 pm 1) in practice, what exactly would be the difference between a minimum balance limit and overdraft from the brokerage account?
Minimum balance threshold is a number greater than zero that Fidelity will automatically 'refill' your CMA up to. Fidelity will transfer the funds from another Fidelity account or a bank account to bring you back up to a minimum balance (say $1000 or whatever your preferred floor is) if your spending drops your balance below this level.

Self-funded overdraft protection is a means of ensuring your realtime purchases will be approved even if the amount is greater than what you currently have in the CMA. It only kicks in if your balance goes below $0.
corp_sharecropper wrote: Thu Jan 16, 2020 10:50 pm 2) when the CMA maximum is breeched, can the funds that xfer to the brokerage be automatically invested in things other than the core fund?
Fidelity CMA has no automatic transfers of money from the CMA to any other account. You can perform the transfer easily online, but you must manually request it and specify the amount each time.
corp_sharecropper wrote: Thu Jan 16, 2020 10:50 pm 3) why is $0 CMA + brokerage overdraft more appealing to some people? It doesn't sound like it's firewalling anything at all except non-MM investments?
$0 CMA + brokerage overdraft means incoming funds deposited to the brokerage account will automatically earn the higher interest rates of the core position of the brokerage account, but still be 'available' for withdrawal from the CMA. That's it. It's the ease of a bank account with the higher earnings of a money market fund.
corp_sharecropper wrote: Thu Jan 16, 2020 10:50 pm Conversely, I think you can set only a maximum guard rail rule on the CMA and have it be a 1-way street for automatic transfers, CMA>Brokerage, right?
Still no automatic transfer of funds from CMA -> brokerage. You get a notification, you arrange a transfer if and when you like. That's all.

All of these shenanigans boil down to government regulations which keep traditional bank accounts very separate and distinct from brokerage/investment accounts. The government says:

1) If you want to offer checking/savings accounts, they must be FDIC insured, and adhere to all rules of consumer banking accounts.
2) If you want to offer investment accounts, they do not need to be FDIC insured (but can be insured by SIPC, a similar but different insurance scheme). SIPC protects cash in accounts that is "intended to be invested" (as opposed to cash that will never be invested and is just sitting waiting to be spent.)
3) A brokerage cannot advertise/encourage traditional (non-FDIC insured) brokerage accounts to be used for traditional checking/savings account purposes. A brokerage can add checking-like FEATURES to brokerage accounts, but the purpose of the account must still be primarily for investments, not just holding onto cash. Fidelity does enforce this by eventually shutting down brokerage accounts which move cash in and out but never invest in anything.

In Dec 2018, Robinhood (a fintech startup aimed at younger/newer investors) attempted to attract customers by offering 3% interest on cash in their "SIPC-protected" account called "Checking & Savings account." That lasted all of a day before they were forced to recant their offer when the head of SIPC took to the media to clarify that they don't protect idle spending cash, and brokerages aren't allowed to pretend that they do.

https://clark.com/personal-finance-cred ... 3-percent/

10 months later, Robinhood relaunched their "Cash Management" account (sound familiar?) with a lower interest rate and proper FDIC protection: https://blog.robinhood.com/news/2019/10 ... management

If all of this sounds ridiculous and unnecessary, remember that the government believes a stable banking system is a cornerstone of a functioning economy. It keeps public trust in the banking system through FDIC protection, protection which costs banks up to 45 basis points of all deposits annually. Talk about a hidden expense ratio!
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tfb
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Re: Fidelity as a one stop shop

Post by tfb »

sarabayo wrote: Thu Jan 16, 2020 11:00 pm The default sweep in a brokerage account is SPAXX, which pays much more than the partner bank account sweep you're forced to use in the CMA. That's the main reason I do it the convoluted way, keeping $0 in the CMA.
SPAXX pays 1.25%. The partner bank sweep pays 0.82%. On $5,000 daily average daily balance you lose $21 in a year, before tax. That's the reason I don't do it the convoluted way.
Harry Sit, taking a break from the forums.
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sarabayo
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Re: Fidelity as a one stop shop

Post by sarabayo »

tfb wrote: Fri Jan 17, 2020 2:54 am
sarabayo wrote: Thu Jan 16, 2020 11:00 pm The default sweep in a brokerage account is SPAXX, which pays much more than the partner bank account sweep you're forced to use in the CMA. That's the main reason I do it the convoluted way, keeping $0 in the CMA.
SPAXX pays 1.25%. The partner bank sweep pays 0.82%. On $5,000 daily average daily balance you lose $21 in a year, before tax. That's the reason I don't do it the convoluted way.
I appreciate your point, and I've read your article Leave Some Money On The Table. Still, although I called it "the convoluted way", it's not actually any more convoluted than having >$0 in the CMA. In fact, I'd say it's actually simpler, since there's only one balance to worry about, instead of two. So if I can get $21.50 a year for free without doing anything special, why not take it? I feel like the real way for me to "leave money on the table" would be to just get rid of the CMA, use only the brokerage account, and eat the ATM fee once in a blue moon when I actually need to get cash from an ATM, since that's the only benefit the CMA seems to give me.
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Leif
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Re: Fidelity as a one stop shop

Post by Leif »

Fidelity will accept checks for deposit at their investment centers. Will they accept paper savings bonds (E&I) at the investment centers for deposit?
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tfb
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Re: Fidelity as a one stop shop

Post by tfb »

sarabayo wrote: Fri Jan 17, 2020 3:31 am I feel like the real way for me to "leave money on the table" would be to just get rid of the CMA, use only the brokerage account, and eat the ATM fee once in a blue moon when I actually need to get cash from an ATM, since that's the only benefit the CMA seems to give me.
That works too. When you have $250k in all retail accounts with Fidelity you also get ATM fee rebate in your regular brokerage account. A U.S. Bank ATM near me doesn't charge any ATM fee to non-customers. Either way one account works just fine at minimal cost.
Harry Sit, taking a break from the forums.
Royal Blue
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Re: Fidelity as a one stop shop

Post by Royal Blue »

Fidelity online brokerage has such a superior user interface vs. Vanguards. Like 100X better. I was shocked at how poor it was to navigate the Vanguard web experience! Of course I buy Vanguard ETF's but via Fidelity.
Mdbulldog
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Re: Fidelity as a one stop shop

Post by Mdbulldog »

corp_sharecropper wrote: Thu Jan 16, 2020 10:50 pm I made it to page 6 and finally realized I would be very disappointed if I made it all the way through this topic without finding the info I was hoping to find... So apologies if this is discussed at some point after page 6.

I notice a lot of people seem to have things setup where their direct deposits go to the brokerage account, they keep the CMA at $0, set the brokerage as overdraft, and do all their debit/ATM/check writing from, at least in terms of account number, the CMA (in practice the funds covering these debits are the brokerage overdraft funds).

This confuses, in part because from everything on the Fidelity website seems to indicate that this is quite opposite of how they designed the accounts to work. Honestly, from my VERY limited understanding, Fidelity's "intention" makes more sense (depending on answers to a few questions).

From what I gather, Fidelity envisions that you use the CMA exactly like you would a checking account (ie. paychecks direct deposited, pay bills, ATM withdrawals, debit card purchases, etc...). You also setup some cash management rules, specifically min/max bounds on the balance amount. Say you have some unexpected purchases that drop your balance below what you deem to be a safe amount and funds in your brokerage will liquidate to bring the CMA balance back within your preset guard rails. Conversely, let's say you don't always spend every last cent that you earn and thus your balance increases overtime. Then, your balance eventually goes over your preset max limit and the extra funds are automatically transferred to your brokerage account.

My first question... Is the preceding information correct?

Now, assuming it is largely or entirely correct, which it might not, I have a few more questions..

1) in practice, what exactly would be the difference between a minimum balance limit and overdraft from the brokerage account?

2) when the CMA maximum is breeched, can the funds that xfer to the brokerage be automatically invested in things other than the core fund?

3) why is $0 CMA + brokerage overdraft more appealing to some people? It doesn't sound like it's firewalling anything at all except non-MM investments? Conversely, I think you can set only a maximum guard rail rule on the CMA and have it be a 1-way street for automatic transfers, CMA>Brokerage, right?

I think that's all I got, looking forward to reading responses.

There are 2 main reason why folks prefer brokerage + CMA.
1) No need to manually transfer fund from the FDIC insured MMF, to a MMF that may pay higher interest
2) As a security precaution against possible fraudulent transactions.
You can get around issue one, by manually transferring funds to your desired mmf. As far as issue two, the main issue is that fidelity will liquidate funds from an mmf to cover your expenditures. If your account was some how compromised, the fraudsters could potentially liquidate a good sum from your mmf. Fidelity however, will not liquidate funds from your investment. Things like CD, T-bills, etf, etc, would remain safe from liquidation in the event a fraudster tried to access your account with fraudulent transactions.


As for me, I have my passive investments, Roth IRA, HSA, roll over IRA, all at fidelity. I also use fidelity as my main checking and saving accounts. Before I show you how I use fidelity as my one stop shop for most of my financial needs. I will point out that I follow the YNAB methodology to budgeting. On payday, I give every dollar a job. So funds rarely sits in my account unallocated. I also tend to use credit cards for most of purchases, and pay them off every two weeks to a month. The way I break it down is
1) CMA.
This is my main checking account, it is the hub of all my finances. It’s where my check is deposited, where I pay my bills from, transfer funds from, etc. I also keep about 2 month of pay in the CMA to act as a buffer. I plan on getting around the issue of possible fraudulent transactions by actively investing the excess funds into T-bills, etc. I have not found a way to have automatic transfer in smaller time increments than 1 month. So transfers that have to happen every 2 weeks or less are done manually.

2) Savings.
I use the brokerages account as my savings. This account is where I put my short to long term saving funds at, everything from purchasing a new TV to funds for a down payment on a house goes here.

3) Passive investment
I also use a brokerage account as my passive investment account. Once I max out my retirement accounts, and I have already allocated funds to my active investment accounts. I put the excess fund here.

Fidelity offers a lot of tools, accounts , and investment options. The key is to explore Fidelity offerings and come up with a system that works for you. For me the whole point of using Fidelity as my one stop shop, is to simplify my finances. In my mind, I don’t see how using two different account as one checking account does that, but to each his own. I am happy with the system that I am using now, and though I am open to refinements, my system works for me.
johnsmithsf
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Re: Fidelity as a one stop shop

Post by johnsmithsf »

baliktad wrote: Fri Jan 17, 2020 2:05 am
3) A brokerage cannot advertise/encourage traditional (non-FDIC insured) brokerage accounts to be used for traditional checking/savings account purposes. A brokerage can add checking-like FEATURES to brokerage accounts, but the purpose of the account must still be primarily for investments, not just holding onto cash. Fidelity does enforce this by eventually shutting down brokerage accounts which move cash in and out but never invest in anything.
1) Is it true? Has anyone seen their brokerage account closed due to this? I plan to use two separate Fidelity brokerage accounts. One for Investing, and the other for checking like features. Maybe I can leave a couple of Bond ETFs in the second brokerage account to keep it from closing

2) I have seen that when chase credit cards pull autopay from fidelity brokerage, they are posted in the fidelity brokerage account up to 4-5 days later (posted in chase though on the due date itself). Has anyone been hit with late payment credit card fees due to this?


Thanks for all the help! :sharebeer
Spirit Rider
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Re: Fidelity as a one stop shop

Post by Spirit Rider »

johnsmithsf wrote: Sat Jan 18, 2020 8:33 am 1) Is it true? Has anyone seen their brokerage account closed due to this? I plan to use two separate Fidelity brokerage accounts. One for Investing, and the other for checking like features. Maybe I can leave a couple of Bond ETFs in the second brokerage account to keep it from closing.
]
Did you read this thread? That is what the Fidelity Cash Management Account (CMA) is for. It is essentially a brokerage account with checking and other advanced cash management account features. No the least of which is the ability to hold your cash in higher yielding money market mutual funds. Fidelity will automatically sell those positions to cover debits (checks, EFTs, ATM, etc...)
2) I have seen that when chase credit cards pull autopay from fidelity brokerage, they are posted in the fidelity brokerage account up to 4-5 days later (posted in chase though on the due date itself). Has anyone been hit with late payment credit card fees due to this?
The posting date is of EFTs is a function of the credit card issuer. If you look at their disclosures, they all say it can be up to 2-3 business days before the debits shows up at your financial institution. If you meet their time requirements, the issuer date always applies.
djevel
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Re: Fidelity as a one stop shop

Post by djevel »

ronin wrote: Sat Dec 07, 2019 6:03 pm Does using the various flavors of Fidelity for a one-stop-shop discussed on this thread work well with Quicken downloads? My hesitation is more around the fact that the CMA offerings are only 'bank-like' in nature and the underling systems might not play nicely with Quicken from the cash management side of things especially if taking advantage of automatic over drafting to a CMA from a brokerage's MMMF position.
Can't speak to Quicken, but with MSFT Money the CMA account behaves much better than the brokerage account when the core holding is sold to cover a transaction. I started off my experiment by trying to use the brokerage account as a checking account, but my SPAXX core would sometime be treated as "cash" and sometimes as a separate holding. This significantly increased the burden of balancing the account. I then switched to using the CMA as the main checking, and it seems to be working much better. The "cost" to this setup is that I have to buy SPRXX manually from time to time, but I would probably have done this in the brokerage account anyway to eek out a few extra tenths of yield. In conclusion, for people clinging to MSFT Money like myself, cash management using only the CMA may be the lowest overhead solution.
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heartwood
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Re: Fidelity as a one stop shop

Post by heartwood »

Spirit Rider wrote: Sat Jan 18, 2020 9:55 am
johnsmithsf wrote: Sat Jan 18, 2020 8:33 am 1) Is it true? Has anyone seen their brokerage account closed due to this? I plan to use two separate Fidelity brokerage accounts. One for Investing, and the other for checking like features. Maybe I can leave a couple of Bond ETFs in the second brokerage account to keep it from closing.
]
Did you read this thread? That is what the Fidelity Cash Management Account (CMA) is for. It is essentially a brokerage account with checking and other advanced cash management account features. No the least of which is the ability to hold your cash in higher yielding money market mutual funds. Fidelity will automatically sell those positions to cover debits (checks, EFTs, ATM, etc...)
2) I have seen that when chase credit cards pull autopay from fidelity brokerage, they are posted in the fidelity brokerage account up to 4-5 days later (posted in chase though on the due date itself). Has anyone been hit with late payment credit card fees due to this?
The posting date is of EFTs is a function of the credit card issuer. If you look at their disclosures, they all say it can be up to 2-3 business days before the debits shows up at your financial institution. If you meet their time requirements, the issuer date always applies.
I've noted the later postings at Fidelity as well. I believe that some of the delay can be a weekend effect depending on the calendar. Past months I've gotten emails from Chase, Citi, and others that they've "received" my payment. I recall that those postings at Fidelity would not show up there until mid-morning Monday. I've gotten the same emails this month on Friday. No hits at Fido yet 8 PM Saturday. I think its Fido. I've tried to talk to them a couple of times about mobile deposits. They always answer the phonebut I'm told to call back after 9AM Eastern time on Monday because that department does not work on weekends. I've never had a late charge.
OTOH my SS direct deposit shows up in my account on Mondays rather than the Wednesday distribution date.
yogesh
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Re: Fidelity as a one stop shop

Post by yogesh »

CMA + Credit + Brokerage + IRA/HSA/401K + 529 at Fidelity with 2FA/Lockdown is good consolidation. Just ensure that you don't fall for those actively managed >1% ER funds but invest in Fidelity zero, index, target date index funds.
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040
lstone19
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Re: Fidelity as a one stop shop

Post by lstone19 »

heartwood wrote: Sat Jan 18, 2020 8:18 pm I've noted the later postings at Fidelity as well. I believe that some of the delay can be a weekend effect depending on the calendar. Past months I've gotten emails from Chase, Citi, and others that they've "received" my payment. I recall that those postings at Fidelity would not show up there until mid-morning Monday. I've gotten the same emails this month on Friday. No hits at Fido yet 8 PM Saturday. I think its Fido. I've tried to talk to them a couple of times about mobile deposits. They always answer the phonebut I'm told to call back after 9AM Eastern time on Monday because that department does not work on weekends. I've never had a late charge.
OTOH my SS direct deposit shows up in my account on Mondays rather than the Wednesday distribution date.
AFAIK, nothing ever posts on the weekend. I’ve never seen anything change between what I see first thing Saturday morning and Monday morning. I don’t believe there are any ACH transactions posting on the weekend anywhere.
yogesh
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Re: Fidelity as a one stop shop

Post by yogesh »

lstone19 wrote: Sat Jan 18, 2020 9:42 pm
heartwood wrote: Sat Jan 18, 2020 8:18 pm I've noted the later postings at Fidelity as well. I believe that some of the delay can be a weekend effect depending on the calendar. Past months I've gotten emails from Chase, Citi, and others that they've "received" my payment. I recall that those postings at Fidelity would not show up there until mid-morning Monday. I've gotten the same emails this month on Friday. No hits at Fido yet 8 PM Saturday. I think its Fido. I've tried to talk to them a couple of times about mobile deposits. They always answer the phonebut I'm told to call back after 9AM Eastern time on Monday because that department does not work on weekends. I've never had a late charge.
OTOH my SS direct deposit shows up in my account on Mondays rather than the Wednesday distribution date.
AFAIK, nothing ever posts on the weekend. I’ve never seen anything change between what I see first thing Saturday morning and Monday morning. I don’t believe there are any ACH transactions posting on the weekend anywhere.
Yes, transaction history isn't updated but bills are paid and can be seen at payee. Didn't bother me as it's similar behavior on credit cards where you pay money but transaction history takes some time to show up. It could however confuse the outstanding balance if looked over weekend.
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040
johnsmithsf
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Re: Fidelity as a one stop shop

Post by johnsmithsf »

Spirit Rider wrote: Sat Jan 18, 2020 9:55 am
johnsmithsf wrote: Sat Jan 18, 2020 8:33 am 1) Is it true? Has anyone seen their brokerage account closed due to this? I plan to use two separate Fidelity brokerage accounts. One for Investing, and the other for checking like features. Maybe I can leave a couple of Bond ETFs in the second brokerage account to keep it from closing.
]
Did you read this thread? That is what the Fidelity Cash Management Account (CMA) is for. It is essentially a brokerage account with checking and other advanced cash management account features. No the least of which is the ability to hold your cash in higher yielding money market mutual funds. Fidelity will automatically sell those positions to cover debits (checks, EFTs, ATM, etc...)
Hi,
I do have a CMA account as well, but I would prefer to use the brokerage account (if possible) as a checking account instead, as in the CMA account, you have to "manually" purchase the money market funds (which I know I will forget to do on a regular basis), whereas in a brokerage account, you can choose to keep all of your cash in a money market fund. :happy
johnra
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Re: Fidelity as a one stop shop

Post by johnra »

My wife and I do essentially everything at Fidelity. We have direct deposit, debit, credit and checking. But they are all tied to our investment account, there is no CMA. The cash balance is about 6 months savings, essentially our emergency fund, and sits in SPAXX, which is earning about 1.4% interest. We pay for almost all everyday expenses on the Fidelity credit card, which is on autopay. Since the credit card gives 2% cash back and in the meantime the money is earning 1.4% interest in SPAXX, I figure we are "earning" about 3.4% in our everyday transactions. This is all automatic. I don't do anything manually.
Razasharpz
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Re: Fidelity as a one stop shop

Post by Razasharpz »

just open a brokerage account at a bank so you have all your money in one place. At worst you pay a small fee everytime you buy more mutual funds, but that fee doesn't really matter if you buy $5000 worth at at time. I get all my Vanguard through USBANK
Age 31: | 70% VTSAX | 20% VTIAX | 10% VBTLX
nalor511
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Re: Fidelity as a one stop shop

Post by nalor511 »

Razasharpz wrote: Sun Jan 19, 2020 8:21 am just open a brokerage account at a bank so you have all your money in one place. At worst you pay a small fee everytime you buy more mutual funds, but that fee doesn't really matter if you buy $5000 worth at at time. I get all my Vanguard through USBANK
It boggles my mind why anyone would trust their everything in one place. Snafus happen. Fraud shutdowns happen. Outages happen. Multiple institutions please, for me.
Topic Author
BogleMelon
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Re: Fidelity as a one stop shop

Post by BogleMelon »

So under "Cash Manager" there are 2 options that kind of serving the same purpose but I don't see anyone talking about why one would be better than the other:

1- Self Funded Overdraft Protection
2- Minimum Target Balance

My understanding:
If I want to keep a firewall from my brokerage account funds, yet maintain some automation, It would be safer to use the second option and keep a minimum amount there. Here are 2 hypothetical scenarios to illustrate what I understand and please correct me if I am wrong:
A series of fraudulent transactions with a total of $80,000 are hitting my CMA:
Scenario 1- Using Overdraft Protection:
Now my $100,000 in MM fund in brokerage is in jeopardy and will be used to cover the transactions! Total instant loss: $80,000

Scenario 2- Using Minimum Target balance of $5000:
Only $5000 was instantly gone, the rest of the transactions were instantly declined due to insufficient funds. Over the night, the account was replenished and the balance became $5000. Total instant loss $5000

Based on that, the minimum target balance would be a safer bet to use.

Did I get that right? Is that how it works in both 2 scenarios?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
jeremyl
Posts: 226
Joined: Sat Dec 20, 2014 8:38 am
Location: Indiana

Re: Fidelity as a one stop shop

Post by jeremyl »

johnra wrote: Sun Jan 19, 2020 2:55 am My wife and I do essentially everything at Fidelity. We have direct deposit, debit, credit and checking. But they are all tied to our investment account, there is no CMA. The cash balance is about 6 months savings, essentially our emergency fund, and sits in SPAXX, which is earning about 1.4% interest. We pay for almost all everyday expenses on the Fidelity credit card, which is on autopay. Since the credit card gives 2% cash back and in the meantime the money is earning 1.4% interest in SPAXX, I figure we are "earning" about 3.4% in our everyday transactions. This is all automatic. I don't do anything manually.
I just opened my account with fidelity. Currently my paycheck is direct deposited into the cma account. As I understand it, I will have to manually purchase spaxx mmf. If I pay a bill and have $0 in the cma it will not pull from the mmf to cover the bill correct?

Should I change my paycheck direct deposit to the “brokerage” account which should automatically go to the mmf (spaxx if I choose). It looks like I can set up bill pay in the brokerage account. If I do that, will bill pay pull from the brokerage mmf as an overdraft to cover?

I’m really confused on how people set this up to avoid the manual buying of mmf’s and maximize the mmf yield on their checking and have bills or checks covered with overdraft.
vtMaps
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Location: central Vermont

Re: Fidelity as a one stop shop

Post by vtMaps »

jeremyl wrote: Thu Jan 23, 2020 8:58 pm As I understand it, I will have to manually purchase spaxx mmf.
correct.
jeremyl wrote: Thu Jan 23, 2020 8:58 pm If I pay a bill and have $0 in the cma it will not pull from the mmf to cover the bill correct?
Not correct. Any money market in the CMA will be used to cover the bill.

--vtMaps
Historical Fact: Justin Smith Morrill represented Vermont in congress, had a dog named 'Trump', and wrote legislation establishing the Land Grant Colleges.
jeremyl
Posts: 226
Joined: Sat Dec 20, 2014 8:38 am
Location: Indiana

Re: Fidelity as a one stop shop

Post by jeremyl »

vtMaps wrote: Thu Jan 23, 2020 9:02 pm
jeremyl wrote: Thu Jan 23, 2020 8:58 pm As I understand it, I will have to manually purchase spaxx mmf.
correct.
jeremyl wrote: Thu Jan 23, 2020 8:58 pm If I pay a bill and have $0 in the cma it will not pull from the mmf to cover the bill correct?
Not correct. Any money market in the CMA will be used to cover the bill.

--vtMaps

Okay, good. I’d rather it be automatic but it’s not a big deal to manually purchase the mmf in the cash management account 2x a month when getting paid.

Thanks for the clarification.
ej0160
Posts: 14
Joined: Sun Dec 02, 2018 7:04 am

Re: Fidelity as a one stop shop

Post by ej0160 »

jeremyl wrote: Thu Jan 23, 2020 8:58 pm I just opened my account with fidelity. Currently my paycheck is direct deposited into the cma account. As I understand it, I will have to manually purchase spaxx mmf. If I pay a bill and have $0 in the cma it will not pull from the mmf to cover the bill correct?

Should I change my paycheck direct deposit to the “brokerage” account which should automatically go to the mmf (spaxx if I choose). It looks like I can set up bill pay in the brokerage account. If I do that, will bill pay pull from the brokerage mmf as an overdraft to cover?

I’m really confused on how people set this up to avoid the manual buying of mmf’s and maximize the mmf yield on their checking and have bills or checks covered with overdraft.
My simplified approach is to have direct deposit into brokerage account with core position SPAXX / Govt' MM, which avoid extra step in CMA to transfer deposit into MM every pay period. From brokerage, I can use (manual scheduled) bill pay, investing, and transfers to other accounts. I only use CMA for rare occasion when I need ATM or checks. My preference is to manually transfer the amount needed to CMA (overdraft not enabled) rather than risk fraudulent charges auto draining funds in brokerage for pending scheduled bill payments.
zeal
Posts: 246
Joined: Tue Dec 11, 2018 4:28 pm

Re: Fidelity as a one stop shop

Post by zeal »

jeremyl wrote: Thu Jan 23, 2020 8:58 pm
johnra wrote: Sun Jan 19, 2020 2:55 am My wife and I do essentially everything at Fidelity. We have direct deposit, debit, credit and checking. But they are all tied to our investment account, there is no CMA. The cash balance is about 6 months savings, essentially our emergency fund, and sits in SPAXX, which is earning about 1.4% interest. We pay for almost all everyday expenses on the Fidelity credit card, which is on autopay. Since the credit card gives 2% cash back and in the meantime the money is earning 1.4% interest in SPAXX, I figure we are "earning" about 3.4% in our everyday transactions. This is all automatic. I don't do anything manually.
I just opened my account with fidelity. Currently my paycheck is direct deposited into the cma account. As I understand it, I will have to manually purchase spaxx mmf. If I pay a bill and have $0 in the cma it will not pull from the mmf to cover the bill correct?

Should I change my paycheck direct deposit to the “brokerage” account which should automatically go to the mmf (spaxx if I choose). It looks like I can set up bill pay in the brokerage account. If I do that, will bill pay pull from the brokerage mmf as an overdraft to cover?

I’m really confused on how people set this up to avoid the manual buying of mmf’s and maximize the mmf yield on their checking and have bills or checks covered with overdraft.
I have direct deposit go to the brokerage account, where SPAXX is automatically purchased. I keep $0 in the CMA. My bills/credit card are set up to be paid through the CMA. I set up cash manager so that any payments made via CMA are overdrafted from the brokerage. The only place where I've given away the brokerage account number is the direct deposit. The only non-automated thing I do is every couple weeks transfer any excess from my brokerage to a different account for savings--I like to keep no more than $4k in the brokerage account in case of fraud.
johnra
Posts: 208
Joined: Sun Dec 28, 2014 12:07 pm

Re: Fidelity as a one stop shop

Post by johnra »

jeremyl wrote: Thu Jan 23, 2020 8:58 pm
johnra wrote: Sun Jan 19, 2020 2:55 am My wife and I do essentially everything at Fidelity. We have direct deposit, debit, credit and checking. But they are all tied to our investment account, there is no CMA. The cash balance is about 6 months savings, essentially our emergency fund, and sits in SPAXX, which is earning about 1.4% interest. We pay for almost all everyday expenses on the Fidelity credit card, which is on autopay. Since the credit card gives 2% cash back and in the meantime the money is earning 1.4% interest in SPAXX, I figure we are "earning" about 3.4% in our everyday transactions. This is all automatic. I don't do anything manually.
I just opened my account with fidelity. Currently my paycheck is direct deposited into the cma account. As I understand it, I will have to manually purchase spaxx mmf. If I pay a bill and have $0 in the cma it will not pull from the mmf to cover the bill correct?

Should I change my paycheck direct deposit to the “brokerage” account which should automatically go to the mmf (spaxx if I choose). It looks like I can set up bill pay in the brokerage account. If I do that, will bill pay pull from the brokerage mmf as an overdraft to cover?

I’m really confused on how people set this up to avoid the manual buying of mmf’s and maximize the mmf yield on their checking and have bills or checks covered with overdraft.
I am not sure why our account are so automatic. All i know is th)at it is: We have direct deposit, autopay, checks, debit and credit (the credit is a different account but it is through Fidelity and set on autopay). We don't have cash management account. Every transaction comes directly in and out of the SPAXX (there is a 1-2 day delay, but these show up as being in process)
jeremyl
Posts: 226
Joined: Sat Dec 20, 2014 8:38 am
Location: Indiana

Re: Fidelity as a one stop shop

Post by jeremyl »

So I just set it up wrong.

I need to set direct deposit for the brokerage and have core position as SPAXX. Set up bill pay and all of that the same as I did for the cma account. Set up cma to overdraft from the brokerage account. Is that correct?
ej0160
Posts: 14
Joined: Sun Dec 02, 2018 7:04 am

Re: Fidelity as a one stop shop

Post by ej0160 »

jeremyl wrote: Sat Jan 25, 2020 6:55 am So I just set it up wrong.
It is neither right nor wrong, just matter of personal preference and convenience.
  • Scenario 1: If you use lots of checks, ATM, and/or debit charges, it may be easier to deposit into CMA and then optionally move direct deposit into money market for higher short-term interest.
  • Scenario 2: If you rarely use checks, ATM, and debit charges, then it may be easier to use brokerage (with SPAXX/money market for core position) for direct deposit + bill pay and only transfer to CMA when needed (for checks, ATM, and/or debit charges).
Unless if you have large monthly cash flow, it is probably at most only few dollars of interest per month difference, so my opinion is pick scenario that is easiest for you to manage.
jeremyl wrote: Sat Jan 25, 2020 6:55 am I need to set direct deposit for the brokerage and have core position as SPAXX. Set up bill pay and all of that the same as I did for the cma account. Set up cma to overdraft from the brokerage account. Is that correct?
If you are looking at scenario 2 above, then correct. Personally I don't like overdraft option. If my CMA account gets fraudulent charges (ex due to compromised ATM), I don't want someone to drain both CMA and brokerage cash funds. By having to do manual transfer (no overdraft), I avoid the scenario that scheduled bill pay (brokerage) fails due to fraudulent activity from CMA account. Purely personal preference on risk versus convenance.
jeremyl
Posts: 226
Joined: Sat Dec 20, 2014 8:38 am
Location: Indiana

Re: Fidelity as a one stop shop

Post by jeremyl »

ej0160 wrote: Sat Jan 25, 2020 8:01 am
jeremyl wrote: Sat Jan 25, 2020 6:55 am So I just set it up wrong.
It is neither right nor wrong, just matter of personal preference and convenience.
  • Scenario 1: If you use lots of checks, ATM, and/or debit charges, it may be easier to deposit into CMA and then optionally move direct deposit into money market for higher short-term interest.
  • Scenario 2: If you rarely use checks, ATM, and debit charges, then it may be easier to use brokerage (with SPAXX/money market for core position) for direct deposit + bill pay and only transfer to CMA when needed (for checks, ATM, and/or debit charges).
Unless if you have large monthly cash flow, it is probably at most only few dollars of interest per month difference, so my opinion is pick scenario that is easiest for you to manage.
jeremyl wrote: Sat Jan 25, 2020 6:55 am I need to set direct deposit for the brokerage and have core position as SPAXX. Set up bill pay and all of that the same as I did for the cma account. Set up cma to overdraft from the brokerage account. Is that correct?
If you are looking at scenario 2 above, then correct. Personally I don't like overdraft option. If my CMA account gets fraudulent charges (ex due to compromised ATM), I don't want someone to drain both CMA and brokerage cash funds. By having to do manual transfer (no overdraft), I avoid the scenario that scheduled bill pay (brokerage) fails due to fraudulent activity from CMA account. Purely personal preference on risk versus convenance.
Scenario 1 probably fits me better and you make a great point about the overdraft if the cma gets compromised for any reason.

I Left schwab to try fidelity’s cma along with anticipating opening an HSA there to possibly do a transfer once a year from my employer HSA to the fidelity HSA.

Thanks for the cma help.
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