Fidelity as a one stop shop

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HomeStretch
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Re: Fidelity Cash Management Account - Investments

Post by HomeStretch » Sun Aug 18, 2019 1:14 pm

Leif wrote:
Sun Aug 18, 2019 1:03 pm
HomeStretch wrote:
Sun Aug 18, 2019 12:51 pm
You can’t go into your Fidelity CMA to link a Vanguard brokerage account in order to “pull” funds from Vanguard.
Not a Vanguard brokerage account, but how about the routing and account number from your check associated with that account?
I was told no by Flagship rep when I asked that question when I requested checks for my Vanguard brokerage account.

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Leif
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Re: Fidelity Cash Management Account - Investments

Post by Leif » Sun Aug 18, 2019 1:53 pm

OK, I just talked with Fidelity. Although their online video seems to contradict this, they said that overdraft protection must come from a Fidelity account. However, satisfying the lower limit is able to come from an external checking account. That makes sense to me. So, it does not work in the way I was hoping. But, it still may work for automatic low balance transfers.

boston10
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Re: Fidelity as a one stop shop

Post by boston10 » Sun Aug 18, 2019 5:11 pm

MisterBill wrote:
Sun Aug 18, 2019 11:36 am
boston10 wrote:
Fri Aug 16, 2019 7:12 am
  • Brokerage account for direct deposit and bill pay (push only). Account number never given out or exposed anywhere except for DD. Manually purchase SPRXX periodically.
Presumably you've set your core position as SPAXX so at least you get a decent interest rate before you get to purchase SPRXX.
Yup, SPAXX as core. I have also read some interesting comments about SPAXX potentially having a higher after-tax yield than SPRXX, but I'm not sure how that applies in MA, so I'm buying SPRXX periodically for now. The comments I've read are from people in CA or NY, which seem to have esoteric rules around deductibility; I'm unsure if those same rules apply here in MA.

Also - as an addendum to my original post, from what I've read, bills paid through bill pay that send a paper check don't expose my account number, so I've decided to pay those bills directly with my brokerage rather than with my CMA. My understanding is, the bill pay service (FiServ) sends them from their own bank.

MisterBill
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Re: Fidelity as a one stop shop

Post by MisterBill » Sun Aug 18, 2019 6:41 pm

boston10 wrote:
Sun Aug 18, 2019 5:11 pm
Yup, SPAXX as core. I have also read some interesting comments about SPAXX potentially having a higher after-tax yield than SPRXX, but I'm not sure how that applies in MA, so I'm buying SPRXX periodically for now. The comments I've read are from people in CA or NY, which seem to have esoteric rules around deductibility; I'm unsure if those same rules apply here in MA.
That's interesting about SPAXX possibly being better tax-wise for NY residents since that is where I live. I found a document that says that 56% of Fidelity Government fund distributions are exempt from NY state taxes. FZDXX (what I use) does not qualify.

https://www.fidelity.com/bin-public/060 ... 18-gse.pdf
boston10 wrote:
Sun Aug 18, 2019 5:11 pm
Also - as an addendum to my original post, from what I've read, bills paid through bill pay that send a paper check don't expose my account number, so I've decided to pay those bills directly with my brokerage rather than with my CMA. My understanding is, the bill pay service (FiServ) sends them from their own bank.
I tried sending myself a small check recently because I was wondering how this worked. The check (sent from my brokerage account) had my account number on it. Not sure if it works differently from your CMA, although I'd tend to doubt it.

boston10
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Re: Fidelity as a one stop shop

Post by boston10 » Sun Aug 18, 2019 7:09 pm

MisterBill wrote:
Sun Aug 18, 2019 6:41 pm
boston10 wrote:
Sun Aug 18, 2019 5:11 pm
Yup, SPAXX as core. I have also read some interesting comments about SPAXX potentially having a higher after-tax yield than SPRXX, but I'm not sure how that applies in MA, so I'm buying SPRXX periodically for now. The comments I've read are from people in CA or NY, which seem to have esoteric rules around deductibility; I'm unsure if those same rules apply here in MA.
That's interesting about SPAXX possibly being better tax-wise for NY residents since that is where I live. I found a document that says that 56% of Fidelity Government fund distributions are exempt from NY state taxes. FZDXX (what I use) does not qualify.
From what I was reading (in other Bogleheads threads, I think), certain states including NY and CA require a minimum 50% tax exempt content in any individual security in order to take any state tax exemption whatsoever. My understanding from these threads was that SPAXX meets the 50% threshold and SPRXX doesn't.

I researched this a bit and found evidence of NY/CA's 50% threshold (for example: https://www.tax.ny.gov/pdf/memos/income/m92_4i.pdf), but I couldn't find evidence of a similar requirement in MA law, so I didn't research any further to confirm the SPAXX vs SPRXX tax-exempt content.
MisterBill wrote:
Sun Aug 18, 2019 6:41 pm
boston10 wrote:
Sun Aug 18, 2019 5:11 pm
Also - as an addendum to my original post, from what I've read, bills paid through bill pay that send a paper check don't expose my account number, so I've decided to pay those bills directly with my brokerage rather than with my CMA. My understanding is, the bill pay service (FiServ) sends them from their own bank.
I tried sending myself a small check recently because I was wondering how this worked. The check (sent from my brokerage account) had my account number on it. Not sure if it works differently from your CMA, although I'd tend to doubt it.
Interesting - I may be wrong on this. I read this article and took it as gospel, but it's 8 years old, so that may have changed: https://thefinancebuff.com/paper-check- ... rvice.html
I used Fidelity’s online bill payment service to pay him[...]

The bank routing number on the bottom of the check is 071923828. It belongs to Northern Trust in Illinois. That’s the bank used by the online bill payment service.

bck63
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Re: Fidelity Cash Management Account - Investments

Post by bck63 » Sun Aug 18, 2019 7:28 pm

southerndoc wrote:
Thu Jan 10, 2019 10:13 pm
Can someone confirm with the Fidelity Cash Management account that Fidelity will automatically sell investments at the end of the day to cover checks and ATM withdrawals? I've read posts from a search, but many of those were a little older. I wanted to make sure Fidelity hasn't changed anything recently.

Are there limits to which funds Fidelity will automatically sell to cover withdrawals?
They'll only sell money market funds. Not other investments.

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LadyGeek
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Re: Fidelity as a one stop shop

Post by LadyGeek » Sun Aug 18, 2019 9:08 pm

I merged southerndoc's thread, started Jan 10, 2019, and recently bumped, into the on-going discussion.
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ARoseByAnyOtherName
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Re: Fidelity as a one stop shop

Post by ARoseByAnyOtherName » Sun Aug 18, 2019 10:07 pm

boston10 wrote:
Fri Aug 16, 2019 7:12 am
  • Keep my BoA account for cash deposits and any misc B&M banking needs, with a $250 DD each paycheck to keep the account free, that I immediately and automatically sweep to Fido. Keep only $100 in this account.
For now I updated my DD to send a chunk of money to my Fido brokerage account per the above plan, and I'm going to start configuring my payees and take it from there. As I get more comfortable, I'll change more of my DD to go to Fido and less to BoA, and add more payees and set up more automatic bill payments.
Are there any B&M banking needs that you can take care of at BoA, but can’t by walking into a Fidelity?

I use both BoA (checking only, not even savings) and Fidelity for everything else. It sure would be nice to simplify down to using Fidelity for everything. I’m not quite ready to do that....

HomeStretch
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Re: Fidelity as a one stop shop

Post by HomeStretch » Sun Aug 18, 2019 10:22 pm

ARoseByAnyOtherName wrote:
Sun Aug 18, 2019 10:07 pm

Are there any B&M banking needs that you can take care of at BoA, but can’t by walking into a Fidelity?

I use both BoA (checking only, not even savings) and Fidelity for everything else. It sure would be nice to simplify down to using Fidelity for everything. I’m not quite ready to do that....
I am keeping my B&M bank (for now)?as it has some things that Fidelity doesn’t, such as :
- safe deposit box
- cashier’s check
- foreign currency
- ATM / cash deposits / coin machine
- Medallion guarantee

MisterBill
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Re: Fidelity as a one stop shop

Post by MisterBill » Sun Aug 18, 2019 11:42 pm

boston10 wrote:
Sun Aug 18, 2019 7:09 pm
From what I was reading (in other Bogleheads threads, I think), certain states including NY and CA require a minimum 50% tax exempt content in any individual security in order to take any state tax exemption whatsoever. My understanding from these threads was that SPAXX meets the 50% threshold and SPRXX doesn't.

I researched this a bit and found evidence of NY/CA's 50% threshold (for example: https://www.tax.ny.gov/pdf/memos/income/m92_4i.pdf), but I couldn't find evidence of a similar requirement in MA law, so I didn't research any further to confirm the SPAXX vs SPRXX tax-exempt content.
OK that makes sense based on what I found in the Fidelity document. I thought the eligibility was based on assets but it's simply based on the 50% minimum (which seems rather arbitrary).
boston10 wrote:
Sun Aug 18, 2019 7:09 pm
MisterBill wrote:
Sun Aug 18, 2019 6:41 pm
boston10 wrote:
Sun Aug 18, 2019 5:11 pm
Also - as an addendum to my original post, from what I've read, bills paid through bill pay that send a paper check don't expose my account number, so I've decided to pay those bills directly with my brokerage rather than with my CMA. My understanding is, the bill pay service (FiServ) sends them from their own bank.
I tried sending myself a small check recently because I was wondering how this worked. The check (sent from my brokerage account) had my account number on it. Not sure if it works differently from your CMA, although I'd tend to doubt it.
Interesting - I may be wrong on this. I read this article and took it as gospel, but it's 8 years old, so that may have changed: https://thefinancebuff.com/paper-check- ... rvice.html
I used Fidelity’s online bill payment service to pay him[...]
The bank routing number on the bottom of the check is 071923828. It belongs to Northern Trust in Illinois. That’s the bank used by the online bill payment service.
The check I sent myself as a bill payment had the ABA as 101205681, which is what I use when I set up direct deposit to my Fidelity accounts. It also had the full account number starting with 7710. I actually did this because I was wondering about timing issues after a check I sent to a catering hall took a week to clear after they had marked it as received in the online contract. Turns out the delay must have been on their end because the check I sent myself showed up a cleared in my account the day after I deposited it.
Last edited by MisterBill on Sun Aug 18, 2019 11:48 pm, edited 3 times in total.

MisterBill
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Re: Fidelity as a one stop shop

Post by MisterBill » Sun Aug 18, 2019 11:43 pm

ARoseByAnyOtherName wrote:
Sun Aug 18, 2019 10:07 pm
Are there any B&M banking needs that you can take care of at BoA, but can’t by walking into a Fidelity?

I use both BoA (checking only, not even savings) and Fidelity for everything else. It sure would be nice to simplify down to using Fidelity for everything. I’m not quite ready to do that....
Fidelity doesn't accept cash deposits at the branch. They don't even have an ATM that would take them. And this is at a newly constructed branch.

ARoseByAnyOtherName
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Re: Fidelity as a one stop shop

Post by ARoseByAnyOtherName » Mon Aug 19, 2019 9:43 pm

MisterBill wrote:
Sun Aug 18, 2019 11:43 pm
ARoseByAnyOtherName wrote:
Sun Aug 18, 2019 10:07 pm
Are there any B&M banking needs that you can take care of at BoA, but can’t by walking into a Fidelity?

I use both BoA (checking only, not even savings) and Fidelity for everything else. It sure would be nice to simplify down to using Fidelity for everything. I’m not quite ready to do that....
Fidelity doesn't accept cash deposits at the branch. They don't even have an ATM that would take them. And this is at a newly constructed branch.
That’s a significant limitation. I don’t need to deposit cash often, but I do sometimes. What do they recommend you do in this situation? Deposit it at another bank and transfer?

ARoseByAnyOtherName
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Re: Fidelity as a one stop shop

Post by ARoseByAnyOtherName » Mon Aug 19, 2019 9:46 pm

HomeStretch wrote:
Sun Aug 18, 2019 10:22 pm
ARoseByAnyOtherName wrote:
Sun Aug 18, 2019 10:07 pm

Are there any B&M banking needs that you can take care of at BoA, but can’t by walking into a Fidelity?

I use both BoA (checking only, not even savings) and Fidelity for everything else. It sure would be nice to simplify down to using Fidelity for everything. I’m not quite ready to do that....
I am keeping my B&M bank (for now)?as it has some things that Fidelity doesn’t, such as :
- safe deposit box
—> I don’t need this.

- cashier’s check
—> I don’t think I need this. Never needed it yet. What are common uses of cashiers checks?

- foreign currency
—> don’t need this. Lots of places to get currency.

- ATM / cash deposits / coin machine
—> this is a significant limitation, see my other comment right before this one.

- Medallion guarantee
—> Fidelity will do these IIRC.

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JoMoney
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Re: Fidelity as a one stop shop

Post by JoMoney » Mon Aug 19, 2019 10:05 pm

ARoseByAnyOtherName wrote:
Mon Aug 19, 2019 9:46 pm
HomeStretch wrote:
Sun Aug 18, 2019 10:22 pm
ARoseByAnyOtherName wrote:
Sun Aug 18, 2019 10:07 pm

Are there any B&M banking needs that you can take care of at BoA, but can’t by walking into a Fidelity?

I use both BoA (checking only, not even savings) and Fidelity for everything else. It sure would be nice to simplify down to using Fidelity for everything. I’m not quite ready to do that....
I am keeping my B&M bank (for now)?as it has some things that Fidelity doesn’t, such as :
- safe deposit box
—> I don’t need this.

- cashier’s check
—> I don’t think I need this. Never needed it yet. What are common uses of cashiers checks?

- foreign currency
—> don’t need this. Lots of places to get currency.

- ATM / cash deposits / coin machine
—> this is a significant limitation, see my other comment right before this one.

- Medallion guarantee
—> Fidelity will do these IIRC.
FWIW,
I've used Fidelity ATM card to get foreign currency out of a foreign ATM (Australia). Fidelity refunded the ATM operators fee and the exchange rate was better than a bank would have offered.

I used a cashier's check not to long ago to buy a car. The seller (not a private party) only offered the options of: cashiers check, wire, or using their financing services. I used my bank to have a cashiers check sent, but Fidelity would have been able to do a wire, and I do see Fidelity does have a form that suggests maybe the do offer cashiers checks .. ? maybe ?
http://personal.fidelity.com/misc/ekits ... equest.pdf
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ClaycordJCA
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Re: Fidelity as a one stop shop

Post by ClaycordJCA » Mon Aug 19, 2019 10:07 pm

ARoseByAnyOtherName wrote:
Mon Aug 19, 2019 9:46 pm
HomeStretch wrote:
Sun Aug 18, 2019 10:22 pm
ARoseByAnyOtherName wrote:
Sun Aug 18, 2019 10:07 pm

Are there any B&M banking needs that you can take care of at BoA, but can’t by walking into a Fidelity

I am keeping my B&M bank (for now)?as it has some things that Fidelity doesn’t, such as :

- cashier’s check
—> I don’t think I need this. Never needed it yet. What are common uses of cashiers checks?



I recently needed a cashier’s check to purchase a vehicle off of a lease. I believe another cashier’s check was required when we made the down payment on our house.

MisterBill
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Re: Fidelity as a one stop shop

Post by MisterBill » Mon Aug 19, 2019 10:11 pm

JoMoney wrote:
Mon Aug 19, 2019 10:05 pm
FWIW,
I've used Fidelity ATM card to get foreign currency out of a foreign ATM (Australia). Fidelity refunded the ATM operators fee and the exchange rate was better than a bank would have offered.

I used a cashier's check not to long ago to buy a car. The seller (not a private party) only offered the options of: cashiers check, wire, or using their financing services. I used my bank to have a cashiers check sent, but Fidelity would have been able to do a wire, and I do see Fidelity does have a form that suggests maybe the do offer cashiers checks .. ? maybe ?
http://personal.fidelity.com/misc/ekits ... equest.pdf
Re: foreign currency, some people like to get it before they leave the country. I also just use the ATM when I get there and let Fidelity pay the fee. Bank of America gives a discount and free express shipping for Preferred Rewards customers. Not sure how competitive the rate is, even with the discount. I had considered it before going to Europe recently but decided against it (but that was before the 2% discount started).

If a wire is possible for car purchases then Fidelity has that covered. I used that feature a few months ago and it worked extremely well, I was able to submit it online and it was completed in a couple of hours. No charge, although that might be because of my status there.

MisterBill
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Re: Fidelity as a one stop shop

Post by MisterBill » Mon Aug 19, 2019 10:12 pm

ClaycordJCA wrote:
Mon Aug 19, 2019 10:07 pm
I recently needed a cashier’s check to purchase a vehicle off of a lease. I believe another cashier’s check was required when we made the down payment on our house.
Odd that they would want a cashier's check for a house down payment. There's plenty of time after they deposit the check to be covered in case if bounces. Obviously with a car it's a different story.

ClaycordJCA
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Re: Fidelity as a one stop shop

Post by ClaycordJCA » Mon Aug 19, 2019 10:35 pm

MisterBill wrote:
Mon Aug 19, 2019 10:12 pm
ClaycordJCA wrote:
Mon Aug 19, 2019 10:07 pm
I recently needed a cashier’s check to purchase a vehicle off of a lease. I believe another cashier’s check was required when we made the down payment on our house.
Odd that they would want a cashier's check for a house down payment. There's plenty of time after they deposit the check to be covered in case if bounces. Obviously with a car it's a different story.
20 + years ago on the house down payment so I could be mistaken, but I don’t think so.

ARoseByAnyOtherName
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Re: Fidelity as a one stop shop

Post by ARoseByAnyOtherName » Tue Aug 20, 2019 6:25 am

I bought a house recently and I wired the down payment. There was an option to do a bank check but the wire was much more convenient. Fidelity makes them easy to do online.

I bought a car roughly 10 years ago and am almost certain I paid via regular check, not a cashiers check. I only paid ~$20k for the car though. Might have been a different story if I bought a $80k hot rod. (Which I wouldn’t do but regardless.)

Thanks all for the info. It sounds like not being able to deposit cash is the main limitation, for me at least.

MikeG62
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Re: Fidelity as a one stop shop

Post by MikeG62 » Tue Aug 20, 2019 7:45 am

While I don't use Fidelity as a one-stop-shop (so not entirely on topic), I would add here that I recently discovered if I initiate an ACH transfer at Fidelity early in the morning the funds arrive at my B&M bank later that same day. [If the transfer is initiated mid or later in the day it arrives the next day.]

Did not realize I could do a same day ACH transfer from Fidelity.
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indexfundfan
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Re: Fidelity as a one stop shop

Post by indexfundfan » Tue Aug 20, 2019 8:08 am

MikeG62 wrote:
Tue Aug 20, 2019 7:45 am
While I don't use Fidelity as a one-stop-shop (so not entirely on topic), I would add here that I recently discovered if I initiate an ACH transfer at Fidelity early in the morning the funds arrive at my B&M bank later that same day. [If the transfer is initiated mid or later in the day it arrives the next day.]

Did not realize I could do a same day ACH transfer from Fidelity.
Yes, I posted this about one week ago

viewtopic.php?f=2&t=266538&start=850#p4697670

The cut off time for the same-day ACH is 8am ET. The money reaches the external bank around noon, but it could take your bank some time to post.
My signature has been deleted.

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obafgkm
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Re: Fidelity as a one stop shop

Post by obafgkm » Tue Aug 20, 2019 8:10 am

MikeG62 wrote:
Tue Aug 20, 2019 7:45 am
While I don't use Fidelity as a one-stop-shop (so not entirely on topic), I would add here that I recently discovered if I initiate an ACH transfer at Fidelity early in the morning the funds arrive at my B&M bank later that same day.
Generally, is that a function solely of Fidelity, or does it also depend on the receiving brick & mortar (B&M) financial institution, too? (In other words, is MikeG62's experience universal, for sufficiently "early in the morning"?)

snowman
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Re: Fidelity as a one stop shop

Post by snowman » Tue Aug 20, 2019 8:14 am

ARoseByAnyOtherName wrote:
Mon Aug 19, 2019 9:43 pm
MisterBill wrote:
Sun Aug 18, 2019 11:43 pm
ARoseByAnyOtherName wrote:
Sun Aug 18, 2019 10:07 pm
Are there any B&M banking needs that you can take care of at BoA, but can’t by walking into a Fidelity?

I use both BoA (checking only, not even savings) and Fidelity for everything else. It sure would be nice to simplify down to using Fidelity for everything. I’m not quite ready to do that....
Fidelity doesn't accept cash deposits at the branch. They don't even have an ATM that would take them. And this is at a newly constructed branch.
That’s a significant limitation. I don’t need to deposit cash often, but I do sometimes. What do they recommend you do in this situation? Deposit it at another bank and transfer?
Correct, you deposit cash at a local bank, and do the transfer. I use one bank just for that purpose, it has zero balance 99% of the time.

When you deposit cash (at any bank), that deposit is available for withdrawal immediately. What that means is that instead of waiting for deposit to clear, then initiate push ACH from local bank to Fidelity, then wait until it gets to Fidelity, you just deposit cash, and immediately can go to Fidelity online and initiate pull from the bank. Yes, you will wait longer for the money to show up, but it is immediately available to trade. So you are earning interest in SPAXX or SPRXX (or whichever MMF you buy) while you wait for your cash to arrive.

It's really the best of both worlds - you get high interest checking account that works with any local bank. Fidelity acts as the manager, and utilizes any B&M bank for the convenience of its customers. There is no need for them to build more branches.

frugaltigris
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Re: Fidelity as a one stop shop

Post by frugaltigris » Tue Aug 20, 2019 8:30 am

HI All,

I think Fidelity as one stop shop is a great idea. I have CMA, brokerage, HSA, 403(b) accounts for me and DW there. I have used Fidelity debit card internationally and it has given my excellent exchange rate and reimbursed foreign ATM fee. I usually maintain only a couple of thousand in my CMA so no minimum requirements. But I am not happy with somethings.

1. International wire transfer in to CMA is a pain. Their form is more complex and on two occasions external parties made mistake. But Fidelity went extra mile in both situations to resolve the issue to my happiness. This is the only "bank account" I know which allows free incoming international wire transfer.

2. Fidelity makes trading super-easy which is sometimes not good. Is there a way in Fidelity account settings to just see balance of my CMA but not brokerage account? If I hide balances, everything is hidden. I don;t want to see balance in my brokerage account but only CMA.

3. Their index funds seem not so tax efficient.

To colleagues who use this as taxable account, do you just invest in ETFs or buy Fidelity index funds too? On practical purposes, what is the tax lag in basis points if I am in 22% bracket with 6% state tax. Thanks for answers.
Last edited by frugaltigris on Tue Aug 20, 2019 8:46 am, edited 1 time in total.

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Artsdoctor
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Re: Fidelity as a one stop shop

Post by Artsdoctor » Tue Aug 20, 2019 8:43 am

HomeStretch wrote:
Sun Aug 18, 2019 10:22 pm
ARoseByAnyOtherName wrote:
Sun Aug 18, 2019 10:07 pm

Are there any B&M banking needs that you can take care of at BoA, but can’t by walking into a Fidelity?

I use both BoA (checking only, not even savings) and Fidelity for everything else. It sure would be nice to simplify down to using Fidelity for everything. I’m not quite ready to do that....
I am keeping my B&M bank (for now)?as it has some things that Fidelity doesn’t, such as :
- safe deposit box
- cashier’s check
- foreign currency
- ATM / cash deposits / coin machine
- Medallion guarantee
There are definitely reasons to keep an account at a local bank and you've listed a couple. For most people, they will pay for the privilege of banking locally but it may easily be worth it. There are a few small, local banks which may even offer services for free, if you're lucky enough to have them nearby.

If you really need a safe deposit box, Fidelity will not help you out there.

Fidelity will cut a cashier's check and you can easily be reimbursed for withdrawing cash from any ATM.

A local bank will almost always charge you relatively high fees when dealing with foreign currency and may offer medallion signature guarantees (but will be MIA when you actually need to schedule an appointment).

If you're going to be dealing with a lot of cash transactions then a local bank will be essential.

MikeG62
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Re: Fidelity as a one stop shop

Post by MikeG62 » Tue Aug 20, 2019 8:53 am

obafgkm wrote:
Tue Aug 20, 2019 8:10 am
MikeG62 wrote:
Tue Aug 20, 2019 7:45 am
While I don't use Fidelity as a one-stop-shop (so not entirely on topic), I would add here that I recently discovered if I initiate an ACH transfer at Fidelity early in the morning the funds arrive at my B&M bank later that same day.
Generally, is that a function solely of Fidelity, or does it also depend on the receiving brick & mortar (B&M) financial institution, too? (In other words, is MikeG62's experience universal, for sufficiently "early in the morning"?)
Can’t say. See Indexfundfan’s comment above. He says the cutoff is 8am. My external B&M bank is BofA by the way.

It’s a great feature no doubt.
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arf30
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Re: Fidelity as a one stop shop

Post by arf30 » Tue Aug 20, 2019 8:59 am

obafgkm wrote:
Tue Aug 20, 2019 8:10 am
MikeG62 wrote:
Tue Aug 20, 2019 7:45 am
While I don't use Fidelity as a one-stop-shop (so not entirely on topic), I would add here that I recently discovered if I initiate an ACH transfer at Fidelity early in the morning the funds arrive at my B&M bank later that same day.
Generally, is that a function solely of Fidelity, or does it also depend on the receiving brick & mortar (B&M) financial institution, too? (In other words, is MikeG62's experience universal, for sufficiently "early in the morning"?)
Sounds like same day ACH, which both institutions must support: https://www.nacha.org/rules/same-day-ac ... er-phase-3

arf30
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Re: Fidelity as a one stop shop

Post by arf30 » Tue Aug 20, 2019 10:32 am

I've used cashier's checks for a condo downpayment and for buying cars, but they're both infrequent - maybe two per decade on average.

For foreign currency I just hit up an ATM when I land or exchange at the airport, depending on how modern the destination is.

ndpage
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Re: Fidelity as a one stop shop

Post by ndpage » Tue Aug 20, 2019 12:38 pm

Question 1: How do those of you who use YNAB link/sync CMA/MMF accounts with Fidelity? Does the MMF balance get linked? If not, do you just process the inflows as going to an Emergency Fund category and then label with the sales as reducing that category? Or do you do something else?

Question 2 (I think I didn't understand this one): For those of you with direct deposit, are you able to set it up to automatically buy MMF from the CMA when the deposit hits, or do you have to go in that night and do it manually?

mervinj7
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Re: Fidelity as a one stop shop

Post by mervinj7 » Tue Aug 20, 2019 12:45 pm

ndpage wrote:
Tue Aug 20, 2019 12:38 pm
Question 1: How do those of you who use YNAB link/sync CMA/MMF accounts with Fidelity? Does the MMF balance get linked? If not, do you just process the inflows as going to an Emergency Fund category and then label with the sales as reducing that category? Or do you do something else?

Question 2 (I think I didn't understand this one): For those of you with direct deposit, are you able to set it up to automatically buy MMF from the CMA when the deposit hits, or do you have to go in that night and do it manually?
This doesn't directly answer your question but I opened a second brokerage account. The sole purpose of this account is to receive direct deposits from trusted sources (e.g. employer). The core fund is setup to be SPAXX. You can setup up an automatic monthly purchase of FDLXX or our preferred MMF in automatic investments. All withdrawals (e.g. bills, mortgage, CC), however, come out of the CMA. That way, my primary "checking" account is not exposed.

MikeG62
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Re: Fidelity as a one stop shop

Post by MikeG62 » Tue Aug 20, 2019 5:11 pm

arf30 wrote:
Tue Aug 20, 2019 8:59 am
obafgkm wrote:
Tue Aug 20, 2019 8:10 am
MikeG62 wrote:
Tue Aug 20, 2019 7:45 am
While I don't use Fidelity as a one-stop-shop (so not entirely on topic), I would add here that I recently discovered if I initiate an ACH transfer at Fidelity early in the morning the funds arrive at my B&M bank later that same day.
Generally, is that a function solely of Fidelity, or does it also depend on the receiving brick & mortar (B&M) financial institution, too? (In other words, is MikeG62's experience universal, for sufficiently "early in the morning"?)
Sounds like same day ACH, which both institutions must support: https://www.nacha.org/rules/same-day-ac ... er-phase-3
Yup and the transfer dollar amount apparently needs to be for no more than $25,000.
Real Knowledge Comes Only From Experience

boston10
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Re: Fidelity as a one stop shop

Post by boston10 » Tue Aug 20, 2019 8:00 pm

So everyone else who sees this thread can benefit from what I've researched on the after-tax yields of SPRXX and SPAXX, I'm going to post what I've found here.

SPAXX is a Government Money Market fund and SPRXX is a Prime Money Market fund. The reason SPRXX is higher-yielding than SPAXX (currently 1.92% vs 1.81%) is because government debt is considered lower-risk, but also because government debt is tax exempt in many states.

So there's a pre-tax difference in yield of 11 basis points. But many states, including Massachusetts (see G.L. c. 62, § 2(a)(1)(A)), allow for an exemption from income tax for dividend income attributable to interest on federal debt.

SPRXX has very little government debt, while SPAXX is mostly government debt (56% vs 2.5%)

So 53.5% more of SPAXX's dividends are state tax deductible than SPRXX's. Based on the current yield, that's 0.968% more of SPAXX that's exempt.

You can run these numbers for your state, but as applied to MA with our current flat 5.05% state income tax rate, the state essentially claws back 4.9 of the 11 basis points you get from SPRXX in taxes. If you live in a state with high marginal brackets and you're paying 10%, they would be clawing back 9.7 of the 11 basis point difference.

The upshot? I'll buy SPRXX sometimes, but I'm going to be a lot less worried about leaving my money in SPAXX going forward, and if you live in a high tax state, you should too.

mervinj7
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Re: Fidelity as a one stop shop

Post by mervinj7 » Tue Aug 20, 2019 9:01 pm

boston10 wrote:
Tue Aug 20, 2019 8:00 pm
You can run these numbers for your state, but as applied to MA with our current flat 5.05% state income tax rate, the state essentially claws back 4.9 of the 11 basis points you get from SPRXX in taxes. If you live in a state with high marginal brackets and you're paying 10%, they would be clawing back 9.7 of the 11 basis point difference.

The upshot? I'll buy SPRXX sometimes, but I'm going to be a lot less worried about leaving my money in SPAXX going forward, and if you live in a high tax state, you should too.
Another option for high tax states is FDLXX. That's 100% state tax free.

boston10
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Re: Fidelity as a one stop shop

Post by boston10 » Wed Aug 21, 2019 5:12 am

mervinj7 wrote:
Tue Aug 20, 2019 9:01 pm
boston10 wrote:
Tue Aug 20, 2019 8:00 pm
You can run these numbers for your state, but as applied to MA with our current flat 5.05% state income tax rate, the state essentially claws back 4.9 of the 11 basis points you get from SPRXX in taxes. If you live in a state with high marginal brackets and you're paying 10%, they would be clawing back 9.7 of the 11 basis point difference.

The upshot? I'll buy SPRXX sometimes, but I'm going to be a lot less worried about leaving my money in SPAXX going forward, and if you live in a high tax state, you should too.
Another option for high tax states is FDLXX. That's 100% state tax free.
Very good point. Current yield on FDLXX is 1.76%, so its after-tax yield in a state with a ~5% income tax is roughly equivalent to SPAXX.

mervinj7
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Re: Fidelity as a one stop shop

Post by mervinj7 » Wed Aug 21, 2019 11:30 am

boston10 wrote:
Wed Aug 21, 2019 5:12 am
mervinj7 wrote:
Tue Aug 20, 2019 9:01 pm
Another option for high tax states is FDLXX. That's 100% state tax free.
Very good point. Current yield on FDLXX is 1.76%, so its after-tax yield in a state with a ~5% income tax is roughly equivalent to SPAXX.
You can go one step further and directly buy 1-3 month Treasury bills and save on the ER. I do it quite often if I know I will have a known large upcoming expense (e.g. car purchase, property tax bill, home improvement). For example, I have upcoming ~$10k electrical panel work with the funds set aside in a 1 month bill earning 2.06% (TEY=2.34%). Once a contract is signed and I have a due date for payment, I will stop rolling that particular bill into new bills. That way, at any given point only a small portion of my "cash" is sitting in FDLXX.

sarabayo
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Re: Fidelity as a one stop shop

Post by sarabayo » Thu Aug 22, 2019 1:22 pm

boston10 wrote:
Tue Aug 20, 2019 8:00 pm
So everyone else who sees this thread can benefit from what I've researched on the after-tax yields of SPRXX and SPAXX, I'm going to post what I've found here.

SPAXX is a Government Money Market fund and SPRXX is a Prime Money Market fund. The reason SPRXX is higher-yielding than SPAXX (currently 1.92% vs 1.81%) is because government debt is considered lower-risk, but also because government debt is tax exempt in many states.

So there's a pre-tax difference in yield of 11 basis points. But many states, including Massachusetts (see G.L. c. 62, § 2(a)(1)(A)), allow for an exemption from income tax for dividend income attributable to interest on federal debt.

SPRXX has very little government debt, while SPAXX is mostly government debt (56% vs 2.5%)

So 53.5% more of SPAXX's dividends are state tax deductible than SPRXX's. Based on the current yield, that's 0.968% more of SPAXX that's exempt.

You can run these numbers for your state, but as applied to MA with our current flat 5.05% state income tax rate, the state essentially claws back 4.9 of the 11 basis points you get from SPRXX in taxes. If you live in a state with high marginal brackets and you're paying 10%, they would be clawing back 9.7 of the 11 basis point difference.

The upshot? I'll buy SPRXX sometimes, but I'm going to be a lot less worried about leaving my money in SPAXX going forward, and if you live in a high tax state, you should too.
I've run the numbers on all of Fidelity's money market funds that are reasonable for an individual to purchase (i.e. excluding ones with large minimum investments), and I have a spreadsheet that computes their after tax yield based on my federal and California marginal tax rates:

Image

The dates run from the beginning of 2018 through last Friday. FDLXX and FDRXX are neck and neck with respect to my tax brackets. I'm currently in FDRXX, but FDLXX just pulled back into the lead by a tiny bit last week so I might switch to FDLXX if that continues :)

Though honestly they're so close that it hardly matters, especially since I only have about $5k in cash at Fidelity! I guess it's just fun to look at the graphs...

djheini
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Re: Fidelity as a one stop shop

Post by djheini » Thu Aug 22, 2019 1:35 pm

ndpage wrote:
Tue Aug 20, 2019 12:38 pm
Question 1: How do those of you who use YNAB link/sync CMA/MMF accounts with Fidelity? Does the MMF balance get linked? If not, do you just process the inflows as going to an Emergency Fund category and then label with the sales as reducing that category? Or do you do something else?

Question 2 (I think I didn't understand this one): For those of you with direct deposit, are you able to set it up to automatically buy MMF from the CMA when the deposit hits, or do you have to go in that night and do it manually?
Answer 1: I have my CMA linked to a YNAB checking account. When it imports transactions, any time you buy MMF shares it gets imported as an outflow transaction, and anytime it redeems them it gets imported as an inflow transaction. I just reject/delete these, and reconcile the YNAB balance against the total account value from fidelity's site (I only hold the FDIC sweep + MMF in my CMA).

Answer 2: You have to go in and do it manually (unless you have a separate brokerage account that you deposit into and change the default fund option, but I don't do that)

bck63
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Re: Fidelity as a one stop shop

Post by bck63 » Thu Aug 22, 2019 5:36 pm

ARoseByAnyOtherName wrote:
Mon Aug 19, 2019 9:43 pm
MisterBill wrote:
Sun Aug 18, 2019 11:43 pm
ARoseByAnyOtherName wrote:
Sun Aug 18, 2019 10:07 pm
Are there any B&M banking needs that you can take care of at BoA, but can’t by walking into a Fidelity?

I use both BoA (checking only, not even savings) and Fidelity for everything else. It sure would be nice to simplify down to using Fidelity for everything. I’m not quite ready to do that....
Fidelity doesn't accept cash deposits at the branch. They don't even have an ATM that would take them. And this is at a newly constructed branch.
That’s a significant limitation. I don’t need to deposit cash often, but I do sometimes. What do they recommend you do in this situation? Deposit it at another bank and transfer?
That's what I do -- deposit cash at my B&M bank and transfer into my cash management account.

boston10
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Re: Fidelity as a one stop shop

Post by boston10 » Thu Aug 22, 2019 5:51 pm

sarabayo wrote:
Thu Aug 22, 2019 1:22 pm
boston10 wrote:
Tue Aug 20, 2019 8:00 pm
So everyone else who sees this thread can benefit from what I've researched on the after-tax yields of SPRXX and SPAXX, I'm going to post what I've found here.

SPAXX is a Government Money Market fund and SPRXX is a Prime Money Market fund. The reason SPRXX is higher-yielding than SPAXX (currently 1.92% vs 1.81%) is because government debt is considered lower-risk, but also because government debt is tax exempt in many states.

So there's a pre-tax difference in yield of 11 basis points. But many states, including Massachusetts (see G.L. c. 62, § 2(a)(1)(A)), allow for an exemption from income tax for dividend income attributable to interest on federal debt.

SPRXX has very little government debt, while SPAXX is mostly government debt (56% vs 2.5%)

So 53.5% more of SPAXX's dividends are state tax deductible than SPRXX's. Based on the current yield, that's 0.968% more of SPAXX that's exempt.

You can run these numbers for your state, but as applied to MA with our current flat 5.05% state income tax rate, the state essentially claws back 4.9 of the 11 basis points you get from SPRXX in taxes. If you live in a state with high marginal brackets and you're paying 10%, they would be clawing back 9.7 of the 11 basis point difference.

The upshot? I'll buy SPRXX sometimes, but I'm going to be a lot less worried about leaving my money in SPAXX going forward, and if you live in a high tax state, you should too.
I've run the numbers on all of Fidelity's money market funds that are reasonable for an individual to purchase (i.e. excluding ones with large minimum investments), and I have a spreadsheet that computes their after tax yield based on my federal and California marginal tax rates:

Image

The dates run from the beginning of 2018 through last Friday. FDLXX and FDRXX are neck and neck with respect to my tax brackets. I'm currently in FDRXX, but FDLXX just pulled back into the lead by a tiny bit last week so I might switch to FDLXX if that continues :)

Though honestly they're so close that it hardly matters, especially since I only have about $5k in cash at Fidelity! I guess it's just fun to look at the graphs...
I really like this. But then I look at the overall yields, and it occurs to me that if I have any sizable amount of cash at Fido, it makes more sense to just buy Treasury bills directly as Mervin suggests...

sarabayo
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Re: Fidelity as a one stop shop

Post by sarabayo » Thu Aug 22, 2019 7:08 pm

boston10 wrote:
Thu Aug 22, 2019 5:51 pm
I really like this. But then I look at the overall yields, and it occurs to me that if I have any sizable amount of cash at Fido, it makes more sense to just buy Treasury bills directly as Mervin suggests...
Yeah. I only keep "checking account money" at Fidelity, i.e. enough money to tide me from paycheck . My emergency fund is at Vanguard in VMFXX. It would be nice to consolidate my cash at Fidelity but Vanguard's MM yields are just so much better than Fidelity's, thanks to their low ERs. I'm already holding my VTSAX at Vanguard so it's not too much trouble for me to keep some cash there as well.

boston10
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Re: Fidelity as a one stop shop

Post by boston10 » Fri Aug 23, 2019 5:57 am

I got my first paycheck today since updating my DD - no issues, and it did in fact deposit into my account a day early, which has not been the case with any banks I've used recently (BoA, Wells Fargo, Santander, Citizens).

To provide an updated strategy (new parts bolded, old parts struck through):
  • Brokerage account for direct deposit and bill pay (push only). Account number never given out or exposed anywhere except for DD. Manually purchase SPRXX periodically occassionally, but try to use Treasury bills if feasible for higher TEY.
  • CMA (not linked/no overdraft) for ATM and check use, and for any use case where my account number would be exposed to a third party (for example, bill pay where they are sending a paper check, or "pull" ACH transactions). These transactions are few and far between for me (zero most months) generally predictable and only happen a few times a month, so I set up several automatic monthly transfers from my brokerage to my CMA to cover them before they're pulled and keep it manually topped off at ~$500 in SPRXX in this account. So everything stays in a MM.
  • Continue to chase higher yields and bonuses across different companies with my excess cash savings.
  • Keep my BoA account for cash deposits and any misc B&M banking needs, with a $250 DD each paycheck to keep the account free, that I immediately and automatically sweep to Fido. Keep only ~$100 in this account.
I have all of my payees set up in Fido at this point, and ebills/reminders/auto-pay set up depending on the payee. Next paycheck I'll steer the bulk of my DD to Fido, and go from there.

spammagnet
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Re: Fidelity as a one stop shop

Post by spammagnet » Sat Aug 24, 2019 10:18 pm

djheini wrote:
Thu Aug 22, 2019 1:35 pm
ndpage wrote:
Tue Aug 20, 2019 12:38 pm
Question 1: How do those of you who use YNAB link/sync CMA/MMF accounts with Fidelity? Does the MMF balance get linked? If not, do you just process the inflows as going to an Emergency Fund category and then label with the sales as reducing that category? Or do you do something else?

Question 2 (I think I didn't understand this one): For those of you with direct deposit, are you able to set it up to automatically buy MMF from the CMA when the deposit hits, or do you have to go in that night and do it manually?
Answer 1: I have my CMA linked to a YNAB checking account. When it imports transactions, any time you buy MMF shares it gets imported as an outflow transaction, and anytime it redeems them it gets imported as an inflow transaction. I just reject/delete these, and reconcile the YNAB balance against the total account value from fidelity's site (I only hold the FDIC sweep + MMF in my CMA).

Answer 2: You have to go in and do it manually (unless you have a separate brokerage account that you deposit into and change the default fund option, but I don't do that)
1. I do the same (delete the MMF buys and sells) and reconcile the YNAB checking account balance against the "Available to Withdraw" amount shown on the Cash Management tab on the Fidelity web site.

2. I have an automated investment set up to buy the MMF. It works even if the cash (sweep) balance is less than the buy amount because Fidelity will sell an MMF to fulfill the auto purchase of the same MMF. It's circular logic, but it works. (I learned that from someone here.) The result is 100% of your cash in the MMF.

Of course, as soon as you have another transaction, it either sells the MMF or puts the excess cash in the sweep, until the next auto-investment.

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indexfundfan
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Re: Fidelity as a one stop shop

Post by indexfundfan » Sun Aug 25, 2019 2:15 pm

spammagnet wrote:
Sat Aug 24, 2019 10:18 pm
2. I have an automated investment set up to buy the MMF. It works even if the cash (sweep) balance is less than the buy amount because Fidelity will sell an MMF to fulfill the auto purchase of the same MMF. It's circular logic, but it works. (I learned that from someone here.) The result is 100% of your cash in the MMF.
Curious to hear how you set this up. Do you set it up for once a month? I guess you can even setup a few so that automatic investments takes place every few days.
My signature has been deleted.

spammagnet
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Re: Fidelity as a one stop shop

Post by spammagnet » Sun Aug 25, 2019 2:28 pm

indexfundfan wrote:
Sun Aug 25, 2019 2:15 pm
Curious to hear how you set this up. Do you set it up for once a month? I guess you can even setup a few so that automatic investments takes place every few days.
I think I set it up for once per week, for the approximate amount of regular new cash inflows (basically, paychecks.)

Someone here compared after-tax yield of the different funds and determined the difference to be insignificant. If you have two commas in cash it might matter, but I certainly don't. If I ever have need to revise the automatic investment, I'll probably just delete it.
Last edited by spammagnet on Sun Aug 25, 2019 10:56 pm, edited 1 time in total.

mhalley
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Re: Fidelity as a one stop shop

Post by mhalley » Sun Aug 25, 2019 8:13 pm

I have the need to give a relative some money on a regular basis. I tried the bluebird card, but there are no atm fee free atms nearby. I was wondering if I could setup another cma account and fund it and give him the atm card. I use my current cma account, but the brokerage account has zero dollars. Would the 2 cma accounts be totally separate, so he could not make charges beyond the amount I put in the second cma?

edge
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Re: Fidelity as a one stop shop

Post by edge » Sun Aug 25, 2019 9:36 pm

Well yes...but his name needs to be on the account.
mhalley wrote:
Sun Aug 25, 2019 8:13 pm
I have the need to give a relative some money on a regular basis. I tried the bluebird card, but there are no atm fee free atms nearby. I was wondering if I could setup another cma account and fund it and give him the atm card. I use my current cma account, but the brokerage account has zero dollars. Would the 2 cma accounts be totally separate, so he could not make charges beyond the amount I put in the second cma?

vtMaps
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Re: Fidelity as a one stop shop

Post by vtMaps » Mon Aug 26, 2019 5:15 am

mhalley wrote:
Sun Aug 25, 2019 8:13 pm
I have the need to give a relative some money on a regular basis.
Why not use the CMA's billpay feature to send him a check? --vtMaps
The optimist proclaims that we live in the best of all possible worlds; and the pessimist fears this is true. --James Branch Cabell

snowman
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Re: Fidelity as a one stop shop

Post by snowman » Mon Aug 26, 2019 9:16 am

vtMaps wrote:
Mon Aug 26, 2019 5:15 am
mhalley wrote:
Sun Aug 25, 2019 8:13 pm
I have the need to give a relative some money on a regular basis.
Why not use the CMA's billpay feature to send him a check? --vtMaps
Agree, unless said relative wants cash only (for whatever reason).

Another option would be for said relative to open his/her own Fidelity CMA account, give you the account number, and you could call Fidelity (cannot be done online) and ask to transfer money from your account to relative's account. Transfer would be instant.

mervinj7
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Re: Fidelity as a one stop shop

Post by mervinj7 » Mon Aug 26, 2019 11:26 am

mhalley wrote:
Sun Aug 25, 2019 8:13 pm
I have the need to give a relative some money on a regular basis. I tried the bluebird card, but there are no atm fee free atms nearby. I was wondering if I could setup another cma account and fund it and give him the atm card. I use my current cma account, but the brokerage account has zero dollars. Would the 2 cma accounts be totally separate, so he could not make charges beyond the amount I put in the second cma?
For liability reasons, I would say the safest option is for your relative to have their own checking account. You can then send them checks using the BillPay feature. That way, your own account exposure is minimized. Unfortunately (or fortunately), you can't use Zelle with the CMA.

MisterBill
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Re: Fidelity as a one stop shop

Post by MisterBill » Mon Aug 26, 2019 8:59 pm

So I was never that concerned about fraud possibility, but just noticed an unknown charge show up on my Fidelity CMA account today. Fortunately it's only for $22.81 (there was also one for $0.00, presumably authorizing it when added to the account). I just reported it to Fidelity and they have cancelled the card and are sending me a new one. I am not sure where they got the number. I did use it several times in Europe back in June but also use it occasionally at local stores for reasons I won't go into here. Also used it last week at a local ATM.

Update: I contacted Amazon and based on the information in the charge, they were able to find the order. Apparently they had already cancelled the order due to suspected fraudulent activity and will open an investigation and make sure I get the money back. Unlikely they'll catch anyone but at least they won't get the stuff they ordered (which presumably was a prelude to trying a bigger purchase, that's how these folks usually work).

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