Fidelity Cash Management Account - Investments

[southerndoc]

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?

[furwut]

Have you read the recent thread on using Fidelity as a one stop shop? The thread discusses cash management accounts.
viewtopic.php?f=2&t=266538

[southerndoc]

I have (and have contributed to it). Apparently I missed it. Let me read it now.

I tried changing my core position, but a popup said that no other options were available for my core position. I thought I had read somewhere on here that people have changed their core positions to Treasuries money market funds, etc.

[stlutz]

You need a regular brokerage account and have all of your deposits go into there. You can then setup cash manager to automagically pull from that when you need cash in the CMA.

Or what I do is use the regular brokerage account for everything except ATM withdrawals. That approach limits my risk in the event my debit card is lost or stolen.

[whodidntante]

Fidelity has a pretty loose definition of settlement account, and will automatically sell SPRXX and maybe some other money market funds to cover debits in the CMA account at the end of the next trading day. When new money comes into the account, I manually buy SPRXX, and Fidelity sells it as needed. I also like that the account can be backed by margin in my brokerage account. I carry a razor thin cash margin, so I like not having to worry about screwing up the arithmetic or forgetting about an autopay from a seldom used card.

[IntangibleAssets]

Just go to Trade, select the CMA account ---> Type in the symbol, (ex: SPRXX) ---> Action (buy) ---> Amount: $xxxxx

Then this is automatically in the CMA

When I need to pay my CC balance and I pay with the CMA account the SPRXX funds are automatically be sold to pay the balance.

Can confirm.

[mattsm]

Confirm this is true, as the CMA account rates have not been rising like they were years ago when I signed up for this bank account.

[zeugmite]

CMA accounts can only have core of FDIC with low rates.
Brokerage accounts can have core that are (some) Fidelity MM funds.
The two types of accounts are almost the same but there are some differences besides allowable core fund. The CMA account also refunds ATM fees without having privileged account relationships. The regular brokerage account I don't think does.

From checkwriting eligible accounts (CMA and brokerage accounts), Fidelity MM funds all act like cash whether or not they are core. They will be sold to cover debits automatically. And as prior author says, you can link accounts and have them overdraft in some order.

Non-MM investments will not be sold. Your debits will just be declined if there is not enough cash, unless it's a margin account.

[MikeG62]

Fidelity has a pretty loose definition of settlement account, and will automatically sell SPRXX and maybe some other money market funds to cover debits in the CMA account at the end of the next trading day. When new money comes into the account, I manually buy SPRXX, and Fidelity sells it as needed. I also like that the account can be backed by margin in my brokerage account. I carry a razor thin cash margin, so I like not having to worry about screwing up the arithmetic or forgetting about an autopay from a seldom used card.

Same for me except I use FZDXX as the MMF option.

I do not auto pay from my brokerage account. I use my BofA checking for payment of all bills. Just don’t want anyone to have the ability to hit an account with that much money in it. Overkill maybe, but sleep better at night doing it this way.

[Carini]

I also use FZDXX within the CMA and keep zero cash in the FDIC insured portion of the account with no issues. I've used the ATM, web bill pay, transfers to other Fidelity accounts, written checks and executed auto pays from CCs, etc. Each time the exact amount is sold from FZDXX to cover.

Any deposits are invested back into FZDXX although that requires a manual buy order - I wish I could automate this but not a huge deal.

[MikeG62]

Any deposits are invested back into FZDXX although that requires a manual buy order - I wish I could automate this but not a huge deal.

+1

[zrail]

Fidelity counts all of the money market funds in a brokerage or CMA account (which is literally just a brokerage account with a few extra features) as settled cash available to trade or withdraw, depending on deposit timing rules. Therefore they’ll sell money market funds to satisfy withdraws or other purchases. They will not automatically sell any other positions, unless your account is somehow subject to a margin call (not possible in a CMA).

[sabtastic]

I have (and have contributed to it). Apparently I missed it. Let me read it now.

I tried changing my core position, but a popup said that no other options were available for my core position. I thought I had read somewhere on here that people have changed their core positions to Treasuries money market funds, etc.

I was confused about this too. Remember, there are two cash management account options. There is the FDIC insured "real" checking account and then the brokerage option. They will have separate checks, atm cards, routing numbers. I use the brokerage option with SPRXX and it works great. I will probably regret this if we have a financial crisis and fido freezes the fund but for now I am getting 2%+ on my checking..

[alpenglow]

Fidelity has a pretty loose definition of settlement account, and will automatically sell SPRXX and maybe some other money market funds to cover debits in the CMA account at the end of the next trading day. When new money comes into the account, I manually buy SPRXX, and Fidelity sells it as needed. I also like that the account can be backed by margin in my brokerage account. I carry a razor thin cash margin, so I like not having to worry about screwing up the arithmetic or forgetting about an autopay from a seldom used card.

I am doing the same thing and it is working nicely.

[betablocker]

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?

One thing I'd add is to set up margin on your brokerage account as a last line of defense for overdrafts.

[whodidntante]

Are there limits to which funds Fidelity will automatically sell to cover withdrawals?

They will not automatically sell bond funds or equity funds. Only Fidelity MMFs as far as I know.