Fidelity as a one stop shop

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
User avatar
emlowe
Posts: 245
Joined: Fri Jun 01, 2018 2:57 pm

Re: Fidelity as a one stop shop

Post by emlowe » Thu Feb 14, 2019 3:10 pm

No, I don't believe so - it looks for "available cash, available margin loan, and non-core money market positions"

Here is what Fidelity says
mySmart Cash Manager® Self Funded Overdraft Protection
As part of mySmart Cash Manager®, Self Funded Overdraft Protection helps fund Fidelity® Cash Management Account debit requests if the debit requests (i.e., from a debit card, direct debit, Fidelity BillPay®, check disbursement, wire, or other cash transactions) exceed the Fidelity® Cash Management Account's available cash balance.

If there is inadequate cash in the Fidelity® Cash Management Account, mySmart Cash Manager Self-Funded Overdraft Protection looks for sufficient funds to cover the debit request in the first Fidelity Funding Account. Self-Funded Overdraft Protection looks for available cash, available margin loan, and non-core money market positions in your first Funding Account. If there are enough available funds to satisfy the debit request, Self Funded Overdraft Protection moves them to your Fidelity® Cash Management Account and satisfies the debit request.
If there are insufficient funds to satisfy the debit request in your first Fidelity Funding Account, Self Funded Overdraft Protection earmarks any available funds and then searches the second Fidelity Funding Account for the difference. If sufficient funds are found, Self Funded Overdraft Protection moves them to your Fidelity® Cash Management Account and satisfies the debit request. If there are insufficient funds to satisfy the debit request in your first and second Fidelity Funding Accounts, mySmart Cash Manager Self Funded Overdraft Protection looks for the difference in your third Fidelity Funding Account, and then your fourth, etc., until enough funds are found to satisfy the debit request, or there are no more Fidelity Funding Accounts.
If there are insufficient funds to satisfy the debit request in your entire Fidelity Funding Account hierarchy, mySmart Cash Manager Self Funded Overdraft Protection does not move any money, and the debit request is processed in the same way as other insufficient fund transactions.
Ferri Core 4: 40% Bonds | 6% Reit | 18% Total i18n | 36% Total US

User avatar
emlowe
Posts: 245
Joined: Fri Jun 01, 2018 2:57 pm

Re: Fidelity as a one stop shop

Post by emlowe » Thu Feb 14, 2019 3:20 pm

emlowe wrote:
Thu Feb 14, 2019 2:43 pm

I've used the 2 Account method.

Note in the 2 account method if you wanted to use SPRXX or other MM, you would still need to manually purchase it.
Slight clarification - in the brokerage account, it would be possible to set up an automatic investment plan to buy SPRXX from SPAXX on a regular basis.

So,

Deposits sweep into SPAXX automatically as your core account
An automatic investment plan takes from SPAXX and buys SPRXX (or other MM)
Debits from the CMA account will pull first from SPAXX, then from SPRXX or other MM as needed
Ferri Core 4: 40% Bonds | 6% Reit | 18% Total i18n | 36% Total US

User avatar
corn18
Posts: 1604
Joined: Fri May 22, 2015 6:24 am

Re: Fidelity as a one stop shop

Post by corn18 » Fri Feb 15, 2019 8:55 pm

Started making the move. Opened a joint brokerage, cash management and Roth. Initiated transfer of taxable and Roth to FIDO. That was all easy and online.

I ACH'd $1k from USAA to the cash management account. That was easy to initiate, but I am irritated. I initiated the transfer on 14 Feb and they are showing the cash will not be available to withdraw until 22 Feb. That seems ludicrous. Maybe it's because it's a new account.

My RSU's vested today and dropped into my company brokerage account at FIDO. Going to sell and transfer the proceeds to the joint FIDO brokerage.

SO far, so good.
Don't do something, just stand there!

yogesh
Posts: 463
Joined: Thu Oct 11, 2012 6:20 pm

Re: Fidelity as a one stop shop

Post by yogesh » Fri Feb 15, 2019 10:23 pm

corn18 wrote:
Fri Feb 15, 2019 8:55 pm
Started making the move. Opened a joint brokerage, cash management and Roth. Initiated transfer of taxable and Roth to FIDO. That was all easy and online.

I ACH'd $1k from USAA to the cash management account. That was easy to initiate, but I am irritated. I initiated the transfer on 14 Feb and they are showing the cash will not be available to withdraw until 22 Feb. That seems ludicrous. Maybe it's because it's a new account.

My RSU's vested today and dropped into my company brokerage account at FIDO. Going to sell and transfer the proceeds to the joint FIDO brokerage.

SO far, so good.
Is there any way to auto-sell RSU on deposit?
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040

User avatar
corn18
Posts: 1604
Joined: Fri May 22, 2015 6:24 am

Re: Fidelity as a one stop shop

Post by corn18 » Sat Feb 16, 2019 7:43 am

yogesh wrote:
Fri Feb 15, 2019 10:23 pm
corn18 wrote:
Fri Feb 15, 2019 8:55 pm
Started making the move. Opened a joint brokerage, cash management and Roth. Initiated transfer of taxable and Roth to FIDO. That was all easy and online.

I ACH'd $1k from USAA to the cash management account. That was easy to initiate, but I am irritated. I initiated the transfer on 14 Feb and they are showing the cash will not be available to withdraw until 22 Feb. That seems ludicrous. Maybe it's because it's a new account.

My RSU's vested today and dropped into my company brokerage account at FIDO. Going to sell and transfer the proceeds to the joint FIDO brokerage.

SO far, so good.
Is there any way to auto-sell RSU on deposit?
I wish there were, but alas, it is not in my plan.
Don't do something, just stand there!

GeraniumLover
Posts: 205
Joined: Mon Feb 22, 2016 3:39 pm

Re: Fidelity as a one stop shop

Post by GeraniumLover » Sat Feb 16, 2019 8:10 am

For those consolidating large amounts to Fidelity, don't forget to claim your cash bonus!

Fidelity Deposit amount ~~ Cash bonus

$1,000,000 to $2,499,999 ~~ $2,500
$2,500,000 to $4,999,999 ~~ $3,500
$5,000,000 or more ~~ $5,000

https://rewards.fidelity.com/offers/cashdepositbonus

User avatar
corn18
Posts: 1604
Joined: Fri May 22, 2015 6:24 am

Re: Fidelity as a one stop shop

Post by corn18 » Sat Feb 16, 2019 10:55 am

Kindof disconcerting to see my taxable and roth accounts disappear at USAA and not reappear at FIDO yet. 33% of my retirement savings lost in the ether. :-(
Don't do something, just stand there!

mptfan
Posts: 5883
Joined: Mon Mar 05, 2007 9:58 am

Re: Fidelity as a one stop shop

Post by mptfan » Sat Feb 16, 2019 11:18 am

corn18 wrote:
Fri Feb 15, 2019 8:55 pm
I ACH'd $1k from USAA to the cash management account. That was easy to initiate, but I am irritated. I initiated the transfer on 14 Feb and they are showing the cash will not be available to withdraw until 22 Feb. That seems ludicrous. Maybe it's because it's a new account.
You should take a step back and look at the big picture and realize that this is a security feature for your own protection. As you pointed out, it is a new account, and Fidelity wants to make sure that a fraudster did not create a new account in your name and set up online access to the new account and then transfer money to that account from your other accounts and then quickly take the money and run. Again, stop and think for a moment...Fidelity has never met you, they don't know what you look like, you haven't showed them any identification, and you just opened an account online, essentially anonymously, and are transferring money from other accounts in your name into a brand new account. By putting a hold on new money, Fidelity is giving the "real you" a chance to be alerted to the transaction by email or by snail mail so that if the account was opened by a fraudster, the real you would have time to step in and stop the fraud. Or the real you would notice the withdrawals from your other accounts. You really should be thanking Fidelity for having reasonable safety precautions designed to protect you. Once the account is active for a while and you do some transactions and you receive a number of alerts and do not complain to Fidelity of any fraud, Fidelity can reach a certain level of comfort knowing that it is the real you who opened the account.
Last edited by mptfan on Sat Feb 16, 2019 11:23 am, edited 3 times in total.

yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: Fidelity as a one stop shop

Post by yoyo6713 » Sat Feb 16, 2019 11:19 am

Just tried to buy SPRXX in CMA and was prompt with this:

Warning: This purchase will be completed at the next available price.

Does that mean I won't be getting the SPRXX until next business day? Today is Sat.

Also min purchase for FZDXX is 100K but I assume it will also allow me to liquidate automatically below 100K?

Thanks.

User avatar
jpsfranks
Posts: 996
Joined: Sun Aug 26, 2007 11:45 pm

Re: Fidelity as a one stop shop

Post by jpsfranks » Sat Feb 16, 2019 11:49 am

yoyo6713 wrote:
Sat Feb 16, 2019 11:19 am
Just tried to buy SPRXX in CMA and was prompt with this:

Warning: This purchase will be completed at the next available price.

Does that mean I won't be getting the SPRXX until next business day? Today is Sat.

Also min purchase for FZDXX is 100K but I assume it will also allow me to liquidate automatically below 100K?

Thanks.
Yes, money market funds are mutual funds and trade on business days. The "next available price" is just a generic fund platform warning, the next available price of a money market fund will always be $1.

Yes, you only need $100k for the initial FZDXX purchase but can draw down below that after that.

User avatar
corn18
Posts: 1604
Joined: Fri May 22, 2015 6:24 am

Re: Fidelity as a one stop shop

Post by corn18 » Sat Feb 16, 2019 12:29 pm

mptfan wrote:
Sat Feb 16, 2019 11:18 am
corn18 wrote:
Fri Feb 15, 2019 8:55 pm
I ACH'd $1k from USAA to the cash management account. That was easy to initiate, but I am irritated. I initiated the transfer on 14 Feb and they are showing the cash will not be available to withdraw until 22 Feb. That seems ludicrous. Maybe it's because it's a new account.
You should take a step back and look at the big picture and realize that this is a security feature for your own protection. As you pointed out, it is a new account, and Fidelity wants to make sure that a fraudster did not create a new account in your name and set up online access to the new account and then transfer money to that account from your other accounts and then quickly take the money and run. Again, stop and think for a moment...Fidelity has never met you, they don't know what you look like, you haven't showed them any identification, and you just opened an account online, essentially anonymously, and are transferring money from other accounts in your name into a brand new account. By putting a hold on new money, Fidelity is giving the "real you" a chance to be alerted to the transaction by email or by snail mail so that if the account was opened by a fraudster, the real you would have time to step in and stop the fraud. Or the real you would notice the withdrawals from your other accounts. You really should be thanking Fidelity for having reasonable safety precautions designed to protect you. Once the account is active for a while and you do some transactions and you receive a number of alerts and do not complain to Fidelity of any fraud, Fidelity can reach a certain level of comfort knowing that it is the real you who opened the account.
Good point.
Don't do something, just stand there!

yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: Fidelity as a one stop shop

Post by yoyo6713 » Sat Feb 16, 2019 1:48 pm

jpsfranks wrote:
Sat Feb 16, 2019 11:49 am
yoyo6713 wrote:
Sat Feb 16, 2019 11:19 am
Just tried to buy SPRXX in CMA and was prompt with this:

Warning: This purchase will be completed at the next available price.

Does that mean I won't be getting the SPRXX until next business day? Today is Sat.

Also min purchase for FZDXX is 100K but I assume it will also allow me to liquidate automatically below 100K?

Thanks.
Yes, money market funds are mutual funds and trade on business days. The "next available price" is just a generic fund platform warning, the next available price of a money market fund will always be $1.

Yes, you only need $100k for the initial FZDXX purchase but can draw down below that after that.
Thank you.

I find it interesting that MM funds are redeemed on the fly when you use your CMA but yet you cannot buy into MM funds during the weekend. This is a bit different from MM accounts at banks. I wonder if one draws down the MMF at fidelity by 10K today if interest will still be earned on the 10K for today (Sat), tomorrow (Sun) and Monday (holiday). I think likely you wont but anyone know for sure?

lstone19
Posts: 603
Joined: Fri Nov 03, 2017 3:33 pm

Re: Fidelity as a one stop shop

Post by lstone19 » Sat Feb 16, 2019 2:04 pm

yoyo6713 wrote:
Sat Feb 16, 2019 1:48 pm
I find it interesting that MM funds are redeemed on the fly when you use your CMA but yet you cannot buy into MM funds during the weekend. This is a bit different from MM accounts at banks. I wonder if one draws down the MMF at fidelity by 10K today if interest will still be earned on the 10K for today (Sat), tomorrow (Sun) and Monday (holiday). I think likely you wont but anyone know for sure?
Actually, they are not "redeemed on the fly". An order to redeem will be placed but it still won't execute and settle until after the next market close. In the meantime, I guess your CMA core is overdrawn but that' s irrelevant since everything settles overnight. And yes, you will earn interest for the weekend.

Right now on Saturday, it is already the Tuesday (due to the holiday) banking / brokerage day. Everything that happens today is a Tuesday transaction. I'm not sure how you would even draw down the MMF by 10K today other than by taking out 10K in cash at an ATM (checks and ACH transactions do not post today) but even that will be considered to have happened on Tuesday.

yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: Fidelity as a one stop shop

Post by yoyo6713 » Sat Feb 16, 2019 2:21 pm

lstone19 wrote:
Sat Feb 16, 2019 2:04 pm
yoyo6713 wrote:
Sat Feb 16, 2019 1:48 pm
I find it interesting that MM funds are redeemed on the fly when you use your CMA but yet you cannot buy into MM funds during the weekend. This is a bit different from MM accounts at banks. I wonder if one draws down the MMF at fidelity by 10K today if interest will still be earned on the 10K for today (Sat), tomorrow (Sun) and Monday (holiday). I think likely you wont but anyone know for sure?
Actually, they are not "redeemed on the fly". An order to redeem will be placed but it still won't execute and settle until after the next market close. In the meantime, I guess your CMA core is overdrawn but that' s irrelevant since everything settles overnight. And yes, you will earn interest for the weekend.

Right now on Saturday, it is already the Tuesday (due to the holiday) banking / brokerage day. Everything that happens today is a Tuesday transaction. I'm not sure how you would even draw down the MMF by 10K today other than by taking out 10K in cash at an ATM (checks and ACH transactions do not post today) but even that will be considered to have happened on Tuesday.
Thanks for the explanation. With ATM debit card, one can easily do 10K purchase of money orders, for an example. I think fidelity is probably giving some internal credits for the long weekend until Tue.

lstone19
Posts: 603
Joined: Fri Nov 03, 2017 3:33 pm

Re: Fidelity as a one stop shop

Post by lstone19 » Sat Feb 16, 2019 3:22 pm

yoyo6713 wrote:
Sat Feb 16, 2019 2:21 pm
Thanks for the explanation. With ATM debit card, one can easily do 10K purchase of money orders, for an example. I think fidelity is probably giving some internal credits for the long weekend until Tue.
Until they settle (yes, settlement applies to banking and debit and credit card transactions as well although with cards, words like finalize might be used instead), everything is a pending transaction. Fidelity does not need to give "internal credits", they approve, in your case, the debit card transaction because they see funds are available or can be made available (by liquidating MM positions) before or at the same time the debit card transaction settles. You're trying to look at a batch world (everything actually happens in a large batch at the same time overnight after each market day) through your real-time glasses. As far as I can tell, nothing happens in the brokerage world in real-time except for trade executions and even they still settle on a batch basis.

Some banks appear to work in real-time, at least the credit union I use for primary transactions. If I phone deposit a check on Saturday, I get interest for Saturday and Sunday. But I'll bet (I'd hope) even they have batch processing for backup. After each backup, you keep a journal of new transactions. That way, if something goes wrong on the next day, you can fall back to the last backup and then roll forward all the journaled intra-day transactions. But nothing I've seen suggests any part of the cash side of Fidelity is real-time - everything is pending until the overnight batch runs.

Eno Deb
Posts: 153
Joined: Sun Feb 03, 2019 4:08 pm

Re: Fidelity as a one stop shop

Post by Eno Deb » Sun Feb 17, 2019 2:10 pm

I'm thinking of moving my checking to Fidelity to earn better interest on checking account balances. I would much prefer the automatic sweep to one of the core MM funds that is available in the brokerage account over manual buying in the CMA, but I'm wondering if there are any drawbacks. Is there any difference between the CMA and the regular Fidelity brokerage account besides the ATM fee reimbursement (which I can live without)?

User avatar
corn18
Posts: 1604
Joined: Fri May 22, 2015 6:24 am

Re: Fidelity as a one stop shop

Post by corn18 » Sun Feb 17, 2019 3:11 pm

Eno Deb wrote:
Sun Feb 17, 2019 2:10 pm
I'm thinking of moving my checking to Fidelity to earn better interest on checking account balances. I would much prefer the automatic sweep to one of the core MM funds that is available in the brokerage account over manual buying in the CMA, but I'm wondering if there are any drawbacks. Is there any difference between the CMA and the regular Fidelity brokerage account besides the ATM fee reimbursement (which I can live without)?
I made the assumption that I could keep $0 in the CM account and still pull cash out via the ATM. I assumed FIDO would sweep the required cash from my brokerage MM fund. Is that not how it works?
Don't do something, just stand there!

Eno Deb
Posts: 153
Joined: Sun Feb 03, 2019 4:08 pm

Re: Fidelity as a one stop shop

Post by Eno Deb » Sun Feb 17, 2019 3:38 pm

corn18 wrote:
Sun Feb 17, 2019 3:11 pm
I made the assumption that I could keep $0 in the CM account and still pull cash out via the ATM. I assumed FIDO would sweep the required cash from my brokerage MM fund. Is that not how it works?
Yes, that should work according to several comments earlier in this thread and would be a way to get free ATM withdrawals. But I was really asking about differences *other* than ATM withdrawals, which are not a high-priority item for me (since I rarely use cash and have other accounts to withdraw from if needed). E.g. differences in billpay, check-writing, user interface in the app/online banking etc. My plan is to use a brokerage account for my checking, so I don't have to buy a MM fund manually each time cash is deposited into the account. Just wondering if there are any other drawbacks compared to the CMA.

zrail
Posts: 76
Joined: Sun Jan 28, 2018 9:18 am

Re: Fidelity as a one stop shop

Post by zrail » Sun Feb 17, 2019 3:57 pm

The CMA core position is FDIC insured. The CMA cannot have margin turned on. The debit card for the CMA refunds all transaction fees. Those are the only substantial differences from a regular Fidelity brokerage account as far as I can tell. We use a brokerage account for our primary account and have a CMA for debit and live check transactions.

Eno Deb
Posts: 153
Joined: Sun Feb 03, 2019 4:08 pm

Re: Fidelity as a one stop shop

Post by Eno Deb » Sun Feb 17, 2019 4:10 pm

zrail wrote:
Sun Feb 17, 2019 3:57 pm
The CMA core position is FDIC insured. The CMA cannot have margin turned on. The debit card for the CMA refunds all transaction fees. Those are the only substantial differences from a regular Fidelity brokerage account as far as I can tell. We use a brokerage account for our primary account and have a CMA for debit and live check transactions.
Thank you, that sounds good. But may I ask why you are not using the brokerage account for the check transactions directly?

zrail
Posts: 76
Joined: Sun Jan 28, 2018 9:18 am

Re: Fidelity as a one stop shop

Post by zrail » Sun Feb 17, 2019 4:24 pm

Eno Deb wrote:
Sun Feb 17, 2019 4:10 pm
Thank you, that sounds good. But may I ask why you are not using the brokerage account for the check transactions directly?
Paranoia, I suppose. We use bill pay on that account but we don’t have check writing turned on. We write so few paper checks that topping up the CMA periodically hadn’t been a problem.

radiowave
Posts: 2308
Joined: Thu Apr 30, 2015 5:01 pm

Re: Fidelity as a one stop shop

Post by radiowave » Sun Feb 17, 2019 5:08 pm

corn18 wrote:
Sun Feb 17, 2019 3:11 pm
Eno Deb wrote:
Sun Feb 17, 2019 2:10 pm
I'm thinking of moving my checking to Fidelity to earn better interest on checking account balances. I would much prefer the automatic sweep to one of the core MM funds that is available in the brokerage account over manual buying in the CMA, but I'm wondering if there are any drawbacks. Is there any difference between the CMA and the regular Fidelity brokerage account besides the ATM fee reimbursement (which I can live without)?
I made the assumption that I could keep $0 in the CM account and still pull cash out via the ATM. I assumed FIDO would sweep the required cash from my brokerage MM fund. Is that not how it works?
One thing to consider, I isolate a separate CMA account attached to the debit card with just a small amount for cash withdrawals to prevent a catastrophic hack from emptying my account. Just an FYI
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page

Eno Deb
Posts: 153
Joined: Sun Feb 03, 2019 4:08 pm

Re: Fidelity as a one stop shop

Post by Eno Deb » Sun Feb 17, 2019 5:45 pm

radiowave wrote:
Sun Feb 17, 2019 5:08 pm
One thing to consider, I isolate a separate CMA account attached to the debit card with just a small amount for cash withdrawals to prevent a catastrophic hack from emptying my account. Just an FYI
If I decide to go forward with this, I will create a second brokerage account for checking (in addition to one that I already have to hold some of my investments). The reason for that is that not just the debit card, but also ACH pulls could theoretically be used to pull money out of the account (be it maliciously or because of some error), so you'd probably not want to give out the account number of your main investment account for auto-pay purposes etc.

Jill546
Posts: 7
Joined: Sat Feb 09, 2019 1:43 pm

Re: Fidelity as a one stop shop

Post by Jill546 » Mon Feb 18, 2019 3:15 pm

Good Afternoon,

Based on this thread, I have opened a CMA and a brokerage account. As I understand it, I keep the CMA at $0 and deposit my paychecks into the brokerage account. The core position is set to a MM fund so I will automatically get a superior interest rate. When I use my the CMA ATM card, the necessary funds are automatically liquidated from the brokerage MM account and instantly transferred to the CMA to fulfill the ATM withdrawal. If I want to pay my bills using Bill Pay, do I so from the CMA or brokerage account? Is there a difference? Any advantages or disadvantages? I don't plan on using the brokerage account for anything except as a bank account.

Thanks.

SpaethCo
Posts: 205
Joined: Thu Jan 14, 2016 12:58 am

Re: Fidelity as a one stop shop

Post by SpaethCo » Mon Feb 18, 2019 9:03 pm

sabtastic wrote:
Wed Jan 09, 2019 9:16 am
The only thing that still worries me is potential fraud. I spoke to fidelity about the fraud options and I wasn't very reassured.
I have some of the same concerns, largely driven by a thread that was on this forum a couple years ago:
Displeased with Fidelity Cash / BNY Mellon- debit card theft

I maintain a minimum amount of cash in my CMA, then move funds from the brokerage account on the rare occasions I write checks or take cash out of an ATM. Now that my local credit union started reimbursing all ATM fees, I’m starting to reconsider carrying the Fidelity card for ATM use. Under normal conditions, either card should work about the same. If fraud does occur, however, being able to get a card re-issued at my local CU branch plus being able to address the fraud charges face-to-face could be a significant benefit.

ERguy101
Posts: 157
Joined: Sat Jul 04, 2015 11:09 am

Re: Fidelity as a one stop shop

Post by ERguy101 » Wed Feb 20, 2019 1:32 pm

I'm going through the whole thing with my CMA right now. I'm wondering what the point is. It seems like the common setup is that we have the CMA with a zero balance, then a 2nd brokerage with a money market core position. You make your direct deposits into the brokerage account, and your autodrafts/checks from the CMA. But you can order checks and a debit card from the brokerage account. So why have the CMA?

mptfan
Posts: 5883
Joined: Mon Mar 05, 2007 9:58 am

Re: Fidelity as a one stop shop

Post by mptfan » Wed Feb 20, 2019 1:43 pm

ERguy101 wrote:
Wed Feb 20, 2019 1:32 pm
But you can order checks and a debit card from the brokerage account. So why have the CMA?
Basically to act as a firewall to protect your everyday spending account from the bulk of your investment funds in other accounts. The issue is using a brokerage account that doubles as a spending account, by combining both roles in one account you expose yourself to the potential risk of fraud impacting not only your spending account but also other funds in the brokerage account that may be auto-debited to cover the fraudulent transaction. For example, someone might want to keep a significant amount of readily available funds in a money market account in their brokerage account as part of their overall asset allocation, let's say 100k, and if that brokerage account were the Fidelity CMA which was also used as a checking/spending account, it would be exposed to greater degree to potential fraudulent transactions due to paying bills, writing checks, ATM withdrawals, debit card purchases, etc. This is in contrast to a situation where you may have say $5,000 in checking and $100,000 in money market funds in a seperate brokerage account not linked by overdraft protection, in that situation the potential for a fraudulent transaction would be limited to the $5,000 in checking as opposed to if the money market funds were kept in the same CMA account and could be auto-debited to cover the transaction, then the potential for fraudulent activity exposes the $100,000 in linked money market funds.
Last edited by mptfan on Wed Feb 20, 2019 2:18 pm, edited 1 time in total.

ERguy101
Posts: 157
Joined: Sat Jul 04, 2015 11:09 am

Re: Fidelity as a one stop shop

Post by ERguy101 » Wed Feb 20, 2019 1:55 pm

mptfan wrote:
Wed Feb 20, 2019 1:43 pm
ERguy101 wrote:
Wed Feb 20, 2019 1:32 pm
But you can order checks and a debit card from the brokerage account. So why have the CMA?
Basically to act as a firewall to protect your everyday spending account from the bulk of your investment funds in other accounts. The issue is using a brokerage account that doubles as a spending account, by combining both roles in one account you expose yourself to the potential risk of fraud impacting not only your spending account but also other funds in the brokerage account that may be auto-debited to cover the fraudulent transaction. For example, someone might want to keep a significant amount of readily available funds in a money market account in their brokerage account as part of their overall asset allocation, let's say 100k, and if that brokerage account were the Fidelity CMA which was also used as a checking/spending account, it would be exposed to greater degree to potential fraudulent transactions due to paying bills, writing checks, ATM withdrawals, debit card purchases, etc. This is in contrast to a situation where you may have say $5,000 in checking and $100,000 in money market funds in a seperate brokerage account, in that situation the potential for a fraudulent transaction would be limited to the $5,000 in checking as opposed to if the money market funds were kept in the same CMA account and could be auto-debited to cover the transaction, then the potential for fraudulent activity exposes the $100,000 in linked money market funds.
Thank you kindly for explaining this to me. So if you utilize the automatic overdraft coverage, then the security part of using a CMA is eliminated, right?

mptfan
Posts: 5883
Joined: Mon Mar 05, 2007 9:58 am

Re: Fidelity as a one stop shop

Post by mptfan » Wed Feb 20, 2019 2:15 pm

ERguy101 wrote:
Wed Feb 20, 2019 1:55 pm
Thank you kindly for explaining this to me. So if you utilize the automatic overdraft coverage, then the security part of using a CMA is eliminated, right?
Not eliminated, but it is reduced to the extent that cash or money market funds held in the brokerage account would be liquidated to cover CMA overdrafts whereas stock and bond funds would not. But some people, myself included, like to be super careful in not allowing any form of access to brokerage accounts that are not used as spending accounts and that includes overdraft or linking the account to other accounts or ATM access or checkwriting or bill paying or any other form of outside use or linkage at all. Call me paranoid if you wish, but I sleep better at night knowing that the bulk of my brokerage assets are not linked to any outside accounts and can't be drained by a fraudulent check or overdraft or debit transaction or any other such thing which has become all too common.

bck63
Posts: 990
Joined: Fri Sep 28, 2018 4:59 pm

Re: Fidelity as a one stop shop

Post by bck63 » Wed Feb 20, 2019 2:34 pm

Question: I have a Fidelity CMA account and a separate brokerage account. I keep about 1K in my checking and everything over that is in a MMF (I use the Treasury only MMF). I have another Fidelity brokerage account with my investing stuff in it.

Am I at real risk for fraud by keeping my MMF money in the CMA? This is the cash portion of my portfolio. Should I move it over to the other brokerage account? Wondering what the real risk is.

Thanks for any thoughts.

mptfan
Posts: 5883
Joined: Mon Mar 05, 2007 9:58 am

Re: Fidelity as a one stop shop

Post by mptfan » Wed Feb 20, 2019 2:37 pm

bck63 wrote:
Wed Feb 20, 2019 2:34 pm
Am I at real risk for fraud by keeping my MMF money in the CMA?
Yes. Read my previous posts.

mptfan
Posts: 5883
Joined: Mon Mar 05, 2007 9:58 am

Re: Fidelity as a one stop shop

Post by mptfan » Wed Feb 20, 2019 2:39 pm

bck63 wrote:
Wed Feb 20, 2019 2:34 pm
I keep about 1K in my checking and everything over that is in a MMF (I use the Treasury only MMF).
I'm not sure what you mean by "keeping about 1k in my checking" because the CMA account is not a checking account, it is a brokerage account that allows checkwriting.

Horsefly
Posts: 583
Joined: Sat Oct 24, 2015 8:13 am
Location: Colorado, mostly

Re: Fidelity as a one stop shop

Post by Horsefly » Wed Feb 20, 2019 2:39 pm

ERguy101 wrote:
Wed Feb 20, 2019 1:32 pm
I'm going through the whole thing with my CMA right now. I'm wondering what the point is. It seems like the common setup is that we have the CMA with a zero balance, then a 2nd brokerage with a money market core position. You make your direct deposits into the brokerage account, and your autodrafts/checks from the CMA. But you can order checks and a debit card from the brokerage account. So why have the CMA?
I've had my CMA for over 5 years, and I've never even attempted to use it the way you are talking about. I think of it in terms of bank accounts: The CMA is my checking account, and my brokerage account is my savings account. I keep enough money in the CMA core account to cover all current and near-term anticipated checks, electronic payments, and ATM withdrawals. I have the CMA set up to automatically transfer money from the brokerage when the CMA gets below $2K. My brokerage is for my investing, and the CMA is for "management of cash" (duh!) to pay bills etc.

bck63
Posts: 990
Joined: Fri Sep 28, 2018 4:59 pm

Re: Fidelity as a one stop shop

Post by bck63 » Wed Feb 20, 2019 3:58 pm

mptfan wrote:
Wed Feb 20, 2019 2:39 pm
bck63 wrote:
Wed Feb 20, 2019 2:34 pm
I keep about 1K in my checking and everything over that is in a MMF (I use the Treasury only MMF).
I'm not sure what you mean by "keeping about 1k in my checking" because the CMA account is not a checking account, it is a brokerage account that allows checkwriting.
By checking meant the FDIC-insured portion of the CMA. I keep a 1K in there for small expenditures. Then I added the MMF and keep the remainder of my "cash" in there.

Eno Deb
Posts: 153
Joined: Sun Feb 03, 2019 4:08 pm

Re: Fidelity as a one stop shop

Post by Eno Deb » Wed Feb 20, 2019 5:19 pm

ERguy101 wrote:
Wed Feb 20, 2019 1:32 pm
I'm going through the whole thing with my CMA right now. I'm wondering what the point is. It seems like the common setup is that we have the CMA with a zero balance, then a 2nd brokerage with a money market core position. You make your direct deposits into the brokerage account, and your autodrafts/checks from the CMA. But you can order checks and a debit card from the brokerage account. So why have the CMA?
Based on the comments here it seems to me the only reason to have a CMA at all is the reimbursement of ATM fees. Apart from that, a second brokerage account (separate from your main investment account for security reasons) can do everything the CMA account does, plus automatic sweep of cash balances into a core MM fund.

User avatar
emlowe
Posts: 245
Joined: Fri Jun 01, 2018 2:57 pm

Re: Fidelity as a one stop shop

Post by emlowe » Wed Feb 20, 2019 7:49 pm

The CMA account does also give FDIC insurance on the cash balance.

So yes, I think you get ATM fees reimbursed and FDIC on the cash balance.

Otherwise, you can do everything else with a standard brokerage account.
Ferri Core 4: 40% Bonds | 6% Reit | 18% Total i18n | 36% Total US

grp2c
Posts: 105
Joined: Sat Mar 08, 2014 5:51 pm

Re: Fidelity as a one stop shop

Post by grp2c » Wed Feb 20, 2019 7:54 pm

You can get ATM fees reimbursed on fidelity brokerage account if you qualify for premium service.

ERISA Stone
Posts: 1625
Joined: Tue Jun 24, 2014 8:54 am

Re: Fidelity as a one stop shop

Post by ERISA Stone » Thu Feb 21, 2019 10:00 pm

I haven't seen it posted in this thread, but aren't treasuries much cheaper to buy at Fidelity as well?

User avatar
whodidntante
Posts: 7645
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: Fidelity as a one stop shop

Post by whodidntante » Thu Feb 21, 2019 10:16 pm

ERISA Stone wrote:
Thu Feb 21, 2019 10:00 pm
I haven't seen it posted in this thread, but aren't treasuries much cheaper to buy at Fidelity as well?
You can buy treasuries at auction for no charge at the auction price. You can trade treasuries on the secondary market for no commission, but you'll pay a spread and it takes a large order to get better pricing.

Gemini
Posts: 1016
Joined: Sun May 20, 2012 8:10 am

Re: Fidelity as a one stop shop

Post by Gemini » Thu Feb 21, 2019 11:43 pm

Tempting to go all in on Fido...

We have an Ally savings account for our emergency and house down payment fund. Ally savings is at 2.2% and no penalty CD at 2.3%. Ally's website is very good and allows for same day ACH in/out from USAA or a local credit union. Does Fido have something similar?

Topic Author
BogleMelon
Posts: 2340
Joined: Mon Feb 01, 2016 11:49 am

Re: Fidelity as a one stop shop

Post by BogleMelon » Thu Feb 21, 2019 11:46 pm

Gemini wrote:
Thu Feb 21, 2019 11:43 pm
Tempting to go all in on Fido...

We have an Ally savings account for our emergency and house down payment fund. Ally savings is at 2.2% and no penalty CD at 2.3%. Ally's website is very good and allows for same day ACH in/out from USAA or a local credit union. Does Fido have something similar?
Nope. It takes couple of days for money coming from outside banks to clear Fidelity account.
I decided to continue using ALLY checking and saving accounts, while moving roth from Vanguard to Fidelity. In the future, if i will invest in taxable, it will be probably Fidelity brokerage account
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

lstone19
Posts: 603
Joined: Fri Nov 03, 2017 3:33 pm

Re: Fidelity as a one stop shop

Post by lstone19 » Fri Feb 22, 2019 12:02 am

My experience is any ACH transaction initiated from the Fidelity end by market close will post before market opening the next market day. Funds pushed out should be available without restriction at the recipient financial institution immediately. Funds pulled in can be used for trading immediately although there is a hold on withdrawing the funds.

From another thread, b0B (above) seems to have problems with pushing funds from his bank to Fidelity (rather than initiating them from Fidelity's end). He seems to be the lone datapoint of problems with Fidelity ACH transactions.

snowman
Posts: 1057
Joined: Thu Jan 31, 2013 12:59 pm

Re: Fidelity as a one stop shop

Post by snowman » Fri Feb 22, 2019 8:42 am

Gemini wrote:
Thu Feb 21, 2019 11:43 pm
Tempting to go all in on Fido...

We have an Ally savings account for our emergency and house down payment fund. Ally savings is at 2.2% and no penalty CD at 2.3%. Ally's website is very good and allows for same day ACH in/out from USAA or a local credit union. Does Fido have something similar?
My experience with Fidelity ACH is following: money pushed out of CMA is available at another bank same day, or next morning. Money pushed from another bank into CMA is generally available next day. Money pulled from CMA takes the longest. 2-3 days, depending on the bank. Bigger banks tend to move money faster than smaller banks and CUs.

Gemini
Posts: 1016
Joined: Sun May 20, 2012 8:10 am

Re: Fidelity as a one stop shop

Post by Gemini » Sat Feb 23, 2019 11:06 am

Does Fido offer a business checking account?

Does anyone keep their emergency fund at Fido?

User avatar
corn18
Posts: 1604
Joined: Fri May 22, 2015 6:24 am

Re: Fidelity as a one stop shop

Post by corn18 » Sat Feb 23, 2019 12:48 pm

I just moved my EF (and all my investment accounts) to FIDO. I put the EF and short term savings in FZDXX FIDELITY MMKT PREMIUM CLASS. It has a 7 day yield of 2.38% and has a $100k minimum, which is fine as I have a lot of money in there (EF, new car in next 2 years, vacation this year, taxes next year).

Sure is nice having a real brokerage vs. USAA. I can get things done online that I couldn't with USAA. And 2.34% vs. 1% USAA MM was paying.

I still have my USAA checking account for direct deposit and paying bills. That will take a lot more work to transition. I have already used the free wire feature at FIDO and the money was in my USAA account in 30 mikes. That is sweet.
Don't do something, just stand there!

yogesh
Posts: 463
Joined: Thu Oct 11, 2012 6:20 pm

Re: Fidelity as a one stop shop

Post by yogesh » Sat Feb 23, 2019 2:18 pm

corn18 wrote:
Sat Feb 23, 2019 12:48 pm
I just moved my EF (and all my investment accounts) to FIDO. I put the EF and short term savings in FZDXX FIDELITY MMKT PREMIUM CLASS. It has a 7 day yield of 2.38% and has a $100k minimum, which is fine as I have a lot of money in there (EF, new car in next 2 years, vacation this year, taxes next year).

Sure is nice having a real brokerage vs. USAA. I can get things done online that I couldn't with USAA. And 2.34% vs. 1% USAA MM was paying.

I still have my USAA checking account for direct deposit and paying bills. That will take a lot more work to transition. I have already used the free wire feature at FIDO and the money was in my USAA account in 30 mikes. That is sweet.
It's good summer vacation project to move checking account, bill pay, ACH deposits, credit card etc. all to Fidelity. It took me about a month.
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040

Gemini
Posts: 1016
Joined: Sun May 20, 2012 8:10 am

Re: Fidelity as a one stop shop

Post by Gemini » Sat Feb 23, 2019 2:27 pm

corn18 wrote:
Sat Feb 23, 2019 12:48 pm
I just moved my EF (and all my investment accounts) to FIDO. I put the EF and short term savings in FZDXX FIDELITY MMKT PREMIUM CLASS. It has a 7 day yield of 2.38% and has a $100k minimum, which is fine as I have a lot of money in there (EF, new car in next 2 years, vacation this year, taxes next year).

Sure is nice having a real brokerage vs. USAA. I can get things done online that I couldn't with USAA. And 2.34% vs. 1% USAA MM was paying.

I still have my USAA checking account for direct deposit and paying bills. That will take a lot more work to transition. I have already used the free wire feature at FIDO and the money was in my USAA account in 30 mikes. That is sweet.

Which account did you open to put the EF and short term savings?

I have the setup where I use USAA for direct deposit....debating the move to Fido

User avatar
corn18
Posts: 1604
Joined: Fri May 22, 2015 6:24 am

Re: Fidelity as a one stop shop

Post by corn18 » Sat Feb 23, 2019 8:28 pm

Gemini wrote:
Sat Feb 23, 2019 2:27 pm
corn18 wrote:
Sat Feb 23, 2019 12:48 pm
I just moved my EF (and all my investment accounts) to FIDO. I put the EF and short term savings in FZDXX FIDELITY MMKT PREMIUM CLASS. It has a 7 day yield of 2.38% and has a $100k minimum, which is fine as I have a lot of money in there (EF, new car in next 2 years, vacation this year, taxes next year).

Sure is nice having a real brokerage vs. USAA. I can get things done online that I couldn't with USAA. And 2.34% vs. 1% USAA MM was paying.

I still have my USAA checking account for direct deposit and paying bills. That will take a lot more work to transition. I have already used the free wire feature at FIDO and the money was in my USAA account in 30 mikes. That is sweet.

Which account did you open to put the EF and short term savings?

I have the setup where I use USAA for direct deposit....debating the move to Fido
I opened a regular brokerage account. That holds my taxable savings in FSKAX (FIDO total market index), FSPSX (FIDO international index) and some in FTABX (FIDO Total bond). I keep the EF in FZDXX. I do have my CMA tied to this account, but may sever that for safety reasons.
Don't do something, just stand there!

ERguy101
Posts: 157
Joined: Sat Jul 04, 2015 11:09 am

Re: Fidelity as a one stop shop

Post by ERguy101 » Sat Feb 23, 2019 8:34 pm

SIGH... Just a note, Fidelity does not allow app/picture deposits of checks > $10,000. If you want to deposit a check over $10,000, you have to goto a local branch or mail the check to them.

lisaneedsbraces
Posts: 63
Joined: Sun Jan 16, 2011 1:23 pm

Re: Fidelity as a one stop shop

Post by lisaneedsbraces » Sat Feb 23, 2019 8:41 pm

ERguy101 wrote:
Sat Feb 23, 2019 8:34 pm
SIGH... Just a note, Fidelity does not allow app/picture deposits of checks > $10,000. If you want to deposit a check over $10,000, you have to goto a local branch or mail the check to them.
My (empty) CMA also has a $10,000 limit, but my funded brokerage account has a $200,000 limit. Other account types have different limits. Might be a conbination of account type and balance.

Post Reply