FZFXX
Fidelity Newbury Street Trust - Treasury Fund
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Cash management account at fidelity vs core position in brokerage?
Why would you use FCASH instead of SPAXX or FZFXX for Fidelity core position?
Mentions
Fidelity brokerage account in SPAXX or FZFXX pays the same 3.7 and you don’t have a FA taking 1 percent of it annually in fee. I’m highly against a CD as the money is locked up for the time duration. If it were me, I’d dump the cash into the broker account. Collect the interest on the money market. While that is happening, learn/read about investing. Maybe put some cash into the market. Your short and long term goals will define your strategy.
With Fidelity you can setup automated etf purchases and keep the cash in a good swap like FZFXX
I’m assuming you’re actually around 4.5%. FZFXX sits around 3.91%, so I’d say go SGOV, but it sounds like you already have it sitting somewhere good. I’m sitting on 50k now that I need to invest. I’m probably going to put it in SGOV for now. Also considering selling roughly $24,000 worth of BLK stock that I’m 20% up on. I just don’t trust the admin or the direction of the economy right now. Everything in the market is overvalued and I just don’t see the vision everyone else is seeing.
This is what I would do: (1) Open a Fidelity brokerage account (Free) and transfer my investable cash there (2) Choose either SPAXX or FZFXX as the option in my cash management account. This will provide > 3.9% interest on the cash (free money at current interest rates) while I wait to decide where to invest (3) Wait for any major market pull backs and only buy low expense ratio ETFs such as VOO and VGT when they drop > 5% from their all time highs. I would also buy in batches and keep at least half in cash for major market drop > 10% which will happen within 2 years (it usually does) and buy more then Any interest gains will be taxed. Taxes on stocks/ETF gains and losses only apply when you sell the stock/ETF. If you buy VOO and VGT, it is better to hold on to them for a long time. At the end of the year, Fidelity will issue the tax statement.
> FTFMX appears to be the best yield and after taxes handily beats FZFXX Something to remember is that a money market fund is extremely stable; it's set up to always trade at $1. FTFMX is a long municipal bond fund. That means the value of your principal investment is exposed to interest rate risk. That can work for you or against you. There are municipal money market funds, like FTEXX. There are also ultra-short municipal bond funds (or ETFs) such as JMST. There is far less volatility interest rate risk, but you give up some yield compared to funds with long-maturity bonds.
FZFXX's 7 day SEC yield (which is standardized) is 3.95%. VUSXX's is 4.21%. Etfs use a 30 day yield, so it's not directly comparable, but SGOV is 4.18%.
> FZFXX offers a good rate 5 - 5.2% Exp Ratio - 0.42% Yuck....
FTFMX appears to be the best yield and after taxes handily beats FZFXX. I'm definitely intrigued by these Muni bonds now.
That sounds very attractive. Being exempt from federal taxes would probably increase the comparable yield by 1%-2% compared to something that's taxed. Wow. Are these as safe as something like SGOV or FZFXX?
It looks like FZFXX offers a good rate 5 - 5.2% which beats SGOV and VUSXX. What would be a drawback of using FZFXX rather than these others? Why is the rate higher? There must be some extra risk?
BACKGROUND: Beginner investor here. In Texas so no state income tax, managed to max out traditional Ira for $7500 this year, no debt, no kids, nothing crazy I want to buy/do, etc, my goal is to get around 4.5% or higher on parked cash in my bank account with a little to no risk vessel like a hysa or mmf. I had in a HYSA with a fintech bank but they kept lowering my rate (even when the amount they advertised was adjusted I always would get lower than that, and had to call in to get it adjusted). I tried to use Roger bank and wanted to transfer 100k and they kept giving me issues when I made a new account and requested to increase the amount to bring in so I cancelled them. QUESTIONS: 1.) What’s the difference between just putting my money into SGOV vs a HYSA? I’m seeing there is also VUSXX, FZFXX, etc. 2.) I like to be very liquid at all times so if I were to go back and forth and buy 100k in SGOV, enjoy the interest, the sell it all in 5 months. The a month later I decide to put 100k back in? I’m only responsible for interest amount or the whole 100k? Would this cause tax implications or is there a more simplified way to handle this? 3.) What suggestions would you have?
how are they more tax efficient? spaxx and FZFXX do not have qualified dividends and are taxed as regular income.
Do keep in mind that money market funds such as SPAXX (or FZFXX) are more tax efficient than savings account. 1099-DIV vs. 1099-INT.
Fidelity is great for brokerage account. With Fidelity brokerage account, you can even keep your uninvested cash and earn high interest by selecting one of these core positions with the **current** yields shown below: * [Fidelity Treasury Fund (FZFXX)](https://fundresearch.fidelity.com/mutual-funds/summary/316341304): 3.96% * [Fidelity Government Money Market Fund (SPAXX)](https://fundresearch.fidelity.com/mutual-funds/summary/31617H102): 3.96% * Taxable Interest Bearing Cash Option (FCASH): 2.19% I keep my cash in FZFXX. It is like getting Certificate of Deposit (CD) rates but you can get your money out any time or trade with your cash any time. I use Fidelity website much more than their mobile app. If you use Fidelity, I'd suggest that you also enable their ["Money transfer lockdown"](https://www.fidelity.com/security/overview) setting for additional protection. You can disable and reenable it any time you need to make an outgoing transfer.
Until there is more clarity, for the next few months parking cash in an FDIC insured account is probably the safest option. Not SPAXX, FZFXX, etc. Yes, the chances of losing money in SPAXX/FZFXX is a very low probability. But, nobody can come close to modeling the outcomes of current global events on the financial system until there is more clarity. (hopefully just a couple months) Fidelity's Explicit Statements: Fidelity clearly states for both SPAXX and FZFXX that: * "An investment in the fund is not a bank account." * "It is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency." It's free and very easy to open/enroll in an FDIC-Insured Deposit Sweep account on Fidelity (I just opened one today with a few clicks). Parking my cash there (any FDIC insured account is ok). I can easily move money to my Fidelity brokerage account in real-time to make trades if I want. Until then my money will sit in an FDIC insured account. Sure, I'll lose a little money on interest for the next few months, but having peace of mind that my money will be FDIC insured is worth it IMO. No telling how other countries respond and the resulting strain it may place on financial markets. If something major starts to go wrong in the markets, the general population will learn when it's too late. Low probability of a black swan event happening, still better safe than sorry.
Thank you! In terms of where to put money, why do you suggest a money market fund? Only reason I ask is because I've started to put my savings in a HYSA, but I still have a money market fund with Fidelity (FZFXX) that I opened a couple years back (granted, it only has $58 in it). I'll continue to put funds in the HYSA, but should I focus on the MMF as well?
I have our emergency fund and spending money in the following: - I Bonds - Treasury Zeroes (usually 4-6 week) - FZFXX (short term money market fund) - cash in checking account Any time I saw a post asking about investing their E Fund, the advice was almost universally “don’t invest it”.
Super relatable. Didn't sell at the exact peak of mid-Feb, but sold a couple weeks after that. FZFXX FTW!
A money market account (MMA) is FDIC insured, so there is no issue keeping savings there. Just keep the total at that institution under $250k. Money Market Funds (MMF) are a different story. They are not FDIC insured, but they are extremely low risk. They are like 99.9% as safe as something FDIC insured, so I’d say that’s still fine to keep large savings cash in them. Some financial advisors advise differently and say stick to FDIC covered accounts, but I think MMFs are fine. As for what I do, I keep a mix of money in checking, some amount in an MMF, and the rest in short term Treasury Zeroes. I get paid twice a month. I have enough money in checking to cover all expenses until the next paycheck plus about $750-$1000. All surplus funds go to a Fidelity brokerage account. That account I have the default position as FZFXX, which is an MMF. I usually have 90% or so in Treasury notes that mature in 2-4 weeks. Because the notes are short term, there is very low risk of them dropping a ton in value over such a short time frame, even if rates are jacked up suddenly. There is a huge secondary market so they are easy to unload. These also mature within a very short time span so even if they lose value somehow on the secondary market, or the market disappears, I only have to hold them a week or two before they mature. I also keep around $6k in I Bonds. I’d buy more, but I’m expecting to use our emergency fund to cover a down payment on a house while we sell our current one, so I don’t want something with early withdrawal penalties.
Before you do that check your see what account your cash is being held in. By default most are not in a money market account and you need to manually change it. FZFXX , SPAXX etc
I have too much money in FZFXX but I don't trust this shit
money market funds can hold things other than just treasuries , they can hold cds or corporate bonds as well. For example FZFXX which is one of fidelity default settlement accounts holds nearly half tbills and the other is repurchase agreements.
>I believe our income needs will be less in retirement but also believe taxes will continue to increase. Yeah, I'm in the same boat. I think having a healthy mix of Roth, traditional, and taxable is the way to go as it will give you some flexibility in where to draw from. ​ >I am contributing the $550 a month into a fidelity money market account (FZFXX) that has a 7 day yield of 5%. I did some research and thought that was comparable if not better than HYSA. It's also easy to manage and access through fidelity. FZFXX is fine. My comment about the HYSA was for your 8 months emergency fund, which you said was in a "traditional savings account", if it's a HYSA already than great. There are other options for all this money that might give you a higher yield, especially if you have state and/or local income taxes. Treasury earnings are exempt from state and local income taxes, so the post-tax yield of tbills, treasury funds (like FDLXX), or treasury ETF's (like SGOV, SHV, BIL, USFR) are probably higher than what you're earning with your savings account and FZFXX. If it's a significant balance you should do the math on how much more you could be earning and decide from there. Personally I keep 2 months expenses in FDLXX and 5 months expenses in SGOV. ​ > I originally planned to invest it in an index fund but thought the money market account at 5% was a good option. Would you still put this in a index in the current market conditions? This goes back to purpose/goals. Money should be invested according to its purpose (especially timeline and risk tolerance), not based on current market conditions or interest rates. The latter is a form of trying to time the market, which usually backfires. Current interest rates are simply a nice bonus for the cash you need to keep on hand, they're not a reason to avoid investing in the market. If you didn't need the cash, then you've earned maybe 5% this year but missed out on 13% growth in VTI over the past 12 months (18% YTD). If you need it in cash, then definitely keep it in cash. ​ > This account is for future potential expenses, most notably, opportunity to buy into the company I work for. I would still need a loan but this account value is a solid down payment on the expected entry fee. I should know that in the next 6 -12 months. While our cash goals are met, we have had a lot of financial changes over the past three years - new house, two kids and four open heart surgeries. I was just being safe and making sure we would not get in a financial bind with all that going on. Regardless, I may decrease this and up my 401k contribution since I am not maxing it out currently. Is that what you would recommend? I think keeping it in cash is a sound approach especially until you figure out if and when you need it.
>401k has a $22.5k employee contribution limit ($23k for 2024) If you're under 50. Thank you very much for the detailed response and clarifications. At 8% contribution to my 401k I am only at $12,000 employee contribution. That leaves me with $11,000 of additional employee contribution available. ​ >Generally Roth IRA as you can access contributions early without penalty and it's good to have a mix of Roth and traditional in retirement. Any dollars in a traditional IRA will also interfere with a backdoor Roth (pro-rata rule) if your income gets to the point of needing that. Roth has the advantage if you think your tax rate will be higher in retirement. Traditional has the advantage if you think your tax rate will be lower in retirement. It's a bit of a guessing game but most people need less income in retirement since they're not saving anymore, house is paid off, kids out of college, etc. I will have to look into the back door roth and how it can be interfered with by a traditional IRA. Salary + bonus for me comes in at roughly $185,000 currently and my wife stays home. While I'm not near the roth income limit currently, I assume in a few years I may catch up to it. I believe our income needs will be less in retirement but also believe taxes will continue to increase. I have taken the roth approach because of this. I'm not sure about the other additional larger expenses but we live pretty conservatively so I'm hopeful we'll be in a strong financial position. We do travel a lot and I would expect more of that in retirement. Travel is one of our largest expenses but we have a modest home and have paid off vehicles / student loans to allow for this. > > >I'd put the emergency fund in a HYSA to earn more interest (4-5% is common now), or maybe even the money market account. If you have an 8 month emergency fund, what's the purpose of the additional savings? If it's for a short term goal (bigger emergency fund, medical expenses, house down payment, vacation savings, etc) then cash equivalents like a money market fund are fine. If it's just additional savings for no purpose in the next 5 years then I would consider investing it in index funds like VTI+VXUS+BND or a target date fund in a taxable brokerage account for higher expected yields. I'd also consider increasing your 401k contributions to put some or all of that $550/month into your 401k if your short term cash goals are met. I am contributing the $550 a month into a fidelity money market account (FZFXX) that has a 7 day yield of 5%. I did some research and thought that was comparable if not better than HYSA. It's also easy to manage and access through fidelity. I originally planned to invest it in an index fund but thought the money market account at 5% was a good option. Would you still put this in a index in the current market conditions? This account is for future potential expenses, most notably, opportunity to buy into the company I work for. I would still need a loan but this account value is a solid down payment on the expected entry fee. I should know that in the next 6 -12 months. While our cash goals are met, we have had a lot of financial changes over the past three years - new house, two kids and four open heart surgeries. I was just being safe and making sure we would not get in a financial bind with all that going on. Regardless, I may decrease this and up my 401k contribution since I am not maxing it out currently. Is that what you would recommend?
Put all your money in short term bonds, like FZFXX at Fidelity. Unsub from this sub and never come back. Wait 30 years.
At present, I'm just trying to get a better return than I could on a money market fund. I'm in FZFXX in one of my Fidelity accounts and in SPAXX in the other. I realize that part of that idea involves how the MM fund 7-day yield can fluctuate where the T-bill locks in a Yield to maturity, (I hope I used the correct term), so it's hard to say. But that's what my current goal is. Later I might think it's a good time to lock in a yield, or return, whatever the right term is technically. But that's not the purpose of this thread. My goal for this thread was to find out the advantages and disadvantages of buying T-bills vs just leaving the money in a MM Fund like FZFXX or SPAXX. This is all money I don't expect to need in a year, or even 3 years.
Since your accounts are already with Fidelity, much easier than T-bills is to just plop the money in SPAXX, FDRXX, or FZFXX. These 3 funds have about a 5% yield hands free (no need to roll T-bills).
Try looking at something like VMFXX or FZFXX.
40% in cash atm. Getting decent yields on Fidelity's default FZFXX money market position.
FZFXX at 0.42% expense ratio 7-day yielding 4.91%....I'm edging just a bit.
SPAXX or FZFXX would be the cash equivalent funds for fidelity
Some Treasury money funds are offering close to that, and better liquidity. SNSXX at 4.98% FZFXX at 5.09%
Good thing about Fidelity is that you can just keep the money in your "core position" that has been configured for SPAXX or FZFXX and earn that interest rate. You don't need to sell the funds to invest in something else, so settlement time is eliminated. Schwab, for example, does not have that capability. Not a big thing, but Fidelity is quite convenient.
I have accounts with Fidelity, Schwab and Vanguard for taxable investing. Out of the three, I would recommend Fidelity a bit above Schwab simply because Fidelity allows you to configure a "core position" to put into a money market fund (FZFXX with 7-day yield almost at 5% right now). Schwab requires you to buy and sell the mutual funds, which can take 1+ days to settle, while Fidelity core position has no settlement time.
As far as I know FDLXX is typically used as a core position in brokerage accounts not just cash management accounts, but the availability of different funds can vary based on the type of account and the brokerage's policies so you might want to hit up Fidelity and ask them what's up. A cash management account can offer some benefits like ATM fee reimbursements, checkwriting, and bill pay, which can be pretty dope if you need those features. But if you're just looking to stash your cash and earn some interest a brokerage account can do the trick too. Money market funds like FDLXX and FZFXX can generate income that's subject to federal income tax but some of it might be exempt from state and local taxes. So if you're looking to save on taxes FDLXX could potentially give you a bit of an edge.
Hello everyone. I’m 22, in the military, and I have the following portfolio: TSP consists of $16K with 70% C, 15% S, 15% C, Fidelity Individual Investments Consists of $620 with 2.041 shares of VT, 2 shares of SCHD, 116.05 of FZFXX, 1.36 of O, 2.036 of INTC, .306 of AAPL, 1.292 of MAIN. I just opened a Roth IRA with fidelity and would like to take my TSP investments down from 8% to 5% and use that 3% and as much as I can into the IRA. I’m looking for advice in general with my shares in my individual investments, recommendations for the IRA, and anything else to note. Thank you all for your help!
You could put it in your Fidelity brokerage account to earn about 4.50% APY. You'll have to switch from the default FCASH position to either FZFXX or SPAXX to get the higher interest rate. Could also look into buying dividend stocks or dividend index funds.
>Total ex USA stock market what is ex? Would you still apply this 60/40 calculation in today's environment? Seems like stocks are just too volatile, unless I had a crystal ball and saw the recession/inflation coming I could pull out of tech stock and invest in commodities (food staples, oil, metals). I guess I am looking for an easier and somewhat safer (but not as profitable) set of ETFs that I can buy into and just rebalance every once in a while. As it is now I have 76% of my $ hunkering down in a money market (SPAXX, FZFXX).
Both core positions (SPAXX and FZFXX) pay \~4.5%.
SPAXX, FCASH, and FZFXX. But all three are not available in all accounts. I think FCASH is only taxable accounts, but not positive.
Fidelity does the same. FZFXX is currently 4.442% and can be used as collateral for CSPs. Robinhood offers 4.5% on cash but it doesn't earn interest if you sell anything against it.
Most HYSAs are paying between 3 and 3.50% at the moment. I've personally been adding to my Fidelity account's FZFXX cash position for that sweet 4.50% return on the underlying short-term T-bills.
I think mine goes to FZFXX
The advertised yield you see is the yield net of expense ratio. Fidelity SPAXX and FZFXX are 4.22% right now, so it's really 4.64% minus 0.42% expense ratio. Essentially your money in SPAXX and FZFXX is yielding 4.64%, Fidelity pockets 0.42 and you keep the 4.22
I am using FZFXX but there are a few Fidelity funds that are all pretty much the same in terms of performance right now. The best money market funds right now all seem to be in short/mid term Treasuries. SPAXX is good too.
Yes, FZFXX, FDLXX, and SPAXX are mutual funds offered by Fidelity. Investing in these funds with your leftover cash can be a good way to make sure your money is fully invested and potentially earn some interest. [The rate right now is over 4%](https://usefidelity.com/what-is-spaxx-in-fidelity-why-is-this-under-my-account/).
Those are mutual funds, right? FZFXX, FDLXX or SPAXX? So if I have some petty cash after buying treasuries, and buy these. Are they gonna be worth it? Like I have maybe $1,400 in my account, I can deploy that cash so I'm fully invested (LOL)? I have AMTD.
I utilize FZFXX Short term T bill fund
I’m moving all my Cap1 savings to SPAXX and FZFXX right now. It’s about the best deal out there for liquid cash. I’m going to draw off those accounts to buy 4 and 8 week T Bills. SPAXX and FZFXX seem to be tied very close to T Bill rates, except for that 0.40% expense on the funds.
Is there an equivalent MM fund to VUSXX that can be purchased at Fidelity? VUSXX seems to be closed to new investors. I'm in the Federal 24% tax bracket and live in California, and am currently in SPAXX but I hear it isn't very tax efficient. Would FZFXX be the best for Fidelity currently, in my situation?
If you have Fidelity they offer FZFXX that pays 4+% and it tracks treasury. It's technically a cash position so no risk of market dropping as you said you wanted to avoid. . I've been putting all my cash there as it's giving me good return without risk of downside.
Sorry - I was quoting the 1/31 month end yield. But as I stated FZFXX is a treasury money market fund. So prime funds will have a higher yield. 2/10 7-day yield on FZFXX is 4.18% with compound effective of 4.27% 2/10 7-day yield on SPRXX is 4.35% with compounding effective of 4.44% 2/10 7-day yield on FMPXX is 4.59% with compoil effective of 4.69% Not sure why you brought up fzfxx since the recommendation by u/enginerd03 is to use a non-treasury money market fund. fzfxx is not a prime money market fund. Everyone else has suggested a prime money market fund with FMPXX being the most likely appropriate fund for OP's use case. FZFXX is simply another treasury money market fund available through Fidelity's core money market sweep.
How do I find my return/yield on FZFXX? FZFXX is my cash position in my general investment account. As I understand it (correct me if I am wrong), since it invests in treasuries its return should be around 4% like treasuries. I can see the 7 day yield on the funds summary page is 3.98%. But I can not figure out how to see my personal return in the fund. I tried taking the interest payment and calculating the monthly return based on the average balance and then annualizing. I got about 1.3-1.4% for the last couple months. I'm lost at what I am doing wrong or if Fidelity has an easy place for me to see my return separate from the rest of my investments in the account. Also what's the difference between return and yield? Seems like the same to me but there must be something different since they use different words in different places.
FZDXX (Fidelity MM) is 4.25%, admittedly you need 100k. The low initial investment fund FZFXX is 3.9%. Not bad.
Fidelity has what they call the "core position," which is where your uninvested cash is kept automatically, without having to take a separate step to buy the fund. This is very convenient. The two choices for the core position are [SPAXX or FZFXX](https://www.fidelity.com/mutual-funds/fidelity-funds/money-market-funds-fcash). SPAXX is the default, but I switched to FZFXX because it's getting the same rate and it's very slightly safer (to be clear, both are very safe) and has lower state taxes. FZFXX invests in short-term Treasury debt, and SPAXX invests in both short-term Treasury debt and short-term debt of government-sponsored enterprises like Fannie Mae. The latter is not backed by the full faith and credit of the government, but is considered "implicitly backed." [This PDF](https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/taxes/2021-gse-letter.pdf) shows that in 2021 SPAXX was 52.90% state tax exempt and FZFXX was 74.54% state tax exempt.
If you use Fidelity and you are currently using SPRXX as a cash equivalent. You could simply keep the rest of your funds in the default core position. Fidelity offers an automatic cash sweep into government money market funds like FZFXX and SPAXX. The cash sweep would be convenient since you don't have to manually redeem the mmf to access cash. I believe that Fidelity also offers a debit card if you need immediate cash access.
The equivalent fund to VMFXX at Fidelity include - SPAXX, FDRXX, FDLXX, FZFXX - these are the zero minimum funds. If you have more capital, there are a bunch of other government money market funds. If you prefer a prime fund, there are another half dozen options. And if you prefer muni money market fund, there are another dozen options. It depends on the type of money market fund and the minimum investment.
Look into Treasury bonds funds like FZFXX from Fidelity. It pays 3.85% currently and it's just listed as a cash balance in your Fidelity account so no risk of market fluctuating. you just have to worry about interest rates. If feds increase rates your % goes up. If they start lowering rates your interest payment will go down. This is paid out every last day of the month. I've get 20% sitting in it now and unit rates start dropping I'm just going to collect interest payments until I need to consider where I should put this that will pay more.
And FDRXX. three different funds are the default for the Roth IRA (SPAXX), Traditional IRA (FDRXX), brokerage (FZFXX) just to be confusing
FZFXX is paying 3.8 right now. An you can use the cash as collateral for cash secured puts!
That info isn't quite accurate since you mentioned you are using a Fidelity account. You may want to double check with Fidelity yourself. Fidelity retail brokerage accounts are setup so that uninvested cash are in a core position. This core position is accessible to you anytime for writing checks and electronic transfers in and out. The core position has a feature to perform what's called a cash-sweep. Your uninvested cash can be swept into either a bank sweep account or a money market fund. If you choose a money market fund - Fidelity provides 2 lower risk government money market funds available - either SPAXX or FZFXX for the sweep. [https://fundresearch.fidelity.com/mutual-funds/summary/31617H102](https://fundresearch.fidelity.com/mutual-funds/summary/31617H102) [https://fundresearch.fidelity.com/mutual-funds/summary/316341304](https://fundresearch.fidelity.com/mutual-funds/summary/316341304) Because the core position has an automatic sweep, you don't have to manually buy into the fund to invest or to sell the funds to redeem cash, the sweep program handles that for you. You don't have to manage your fund redemptions for cash withdrawals. These links may help explain it better - [https://www.fidelity.com/learning-center/investment-products/mutual-funds/core-position-video](https://www.fidelity.com/learning-center/investment-products/mutual-funds/core-position-video) [https://accountopening.fidelity.com/ftgw/aong/aongapp/interestRates?type=fcma](https://accountopening.fidelity.com/ftgw/aong/aongapp/interestRates?type=fcma)
I've got my cash in FZFXX right now. It's a Fidelity Treasury Money Market Fund.
As several others have mentioned, some brokers have an automatic "sweep" program that uses a money market funds that tracks the overnight rate, which is now above 4%. Fidelity is one such option, with money market funds SPAXX and FZFXX. Another choice is to buy an ETF that is based on short-term Treasury bills, such as SGOV. This pays monthly dividends, but also goes up about $0.01 - $0.02 in nav each day. It is yielding about 4% right now, and will increase with each subsequent bump in the overnight rate. I have money at both Fidelity and TDAmeritrade, which hundreds of thousands of $ in both SPAXX and SGOV. They both work just fine.
SPRXX, SPAXX, FZFXX... Or look at products>fixed income. Can also do short term treasury ETF
You can invest in FZFXX directly or just choose it as your Cash Management Account option as well. According to Fidelity [website](https://fundresearch.fidelity.com/mutual-funds/summary/316341304) for FZFXX: 7-Day Yield The current yield reflects the current earnings of the fund, while the total return refers to a specific past holding period. The 7-Day Yield is the average income return over the previous seven days, assuming the rate stays the same for one year. **It is the Fund's total income net of expenses**, divided by the total number of outstanding shares and includes any applicable waiver or reimbursement. Absent such waivers or reimbursements, the returns would have been lower.
I just bought some new issue T-Bills through Fidelity. Super easy. And they pay really good interest in their Cash Management Account too (with 3 options, all available to trade immediately without locking your funds). I keep my cash in FZFXX which is currently paying 3.39%: https://www.fidelity.com/mutual-funds/fidelity-funds/money-market-funds-fcash
Where did you move your cash to from SPAXX? So, as far as insurance, what is optimal if one has $1mm of cash, and intends to stay in cash for a few years? FCASH vs. SPAXX vs. FZFXX. Also, since SPAXX is invested in bonds (short term), did it go down in value as rates rose, as did longer duration TLT, etc? If it is pegged at $1, who ate the interest rate face value loss as rates rose and bonds dropped?
So, as far as insurance, what is optimal if one has $1mm of cash, and intends to stay in cash for a few years? FCASH vs. SPAXX vs. FZFXX. Also, since SPAXX is invested in bonds (short term), did it go down in value as rates rose, as did longer duration TLT, etc? If it is pegged at $1, who ate the interest rate face value loss as rates rose and bonds dropped?
So, as far as insurance, what is optimal if one has $1mm of cash, and intends to stay in cash for a few years? FCASH vs. SPAXX vs. FZFXX. Also, since SPAXX is invested in bonds (short term), did it go down in value as rates rose, as did longer duration TLT, etc? If it is pegged at $1, who ate the interest rate face value loss as rates rose and bonds dropped?
So, as far as insurance, what is optimal if one has $1mm of cash, and intends to stay in cash for a few years? FCASH vs. SPAXX vs. FZFXX. Also, since SPAXX is invested in bonds (short term), did it go down in value as rates rose, as did longer duration TLT, etc? If it is pegged at $1, who ate the interest rate face value loss as rates rose and bonds dropped?
I moved my Fidelity Cash account to FZFXX due to the higher interest rate it pays 3.36% right now. Should go up slightly when feds increase rates but eventually I'll move it out when rates start to drop and won't pay near the 3+% like it is now. Not saying to move what you have but taking advantage of the Treasury bonds right now is a good option for free interest on cash you are not investing in other funds.
I take it you invest with Fidelity? So they list 3 options to store uninvested cash, FCASH, SPAXX, and FZFXX, as [indicated here](https://i.imgur.com/eKTprvs.png) from your link. They give brief [descriptions here](https://i.imgur.com/raVAosD.png). Money market fund means Fidelity takes your cash and invests it in government bonds, whose dividends (the 3.33% yields) are given to you minus an expense ratio. The expense ratio might in theory exceed the yield if government bond yields tank. This happened in 2020. The two types of money market funds are basically the exact same thing, they invest in US bonds, CDs, other cash like assets. Fidelity's FCASH however, is not necessarily invested anywhere and they make no promises of interests. In return, you pay no expense ratio.
If you have a Fidelity brokerage account already, you could just park your funds in the account until you decide on what to invest. The default Fidelity brokerage account has a money market sweep option. I.e. what that means is that all your cash in the default core position can be automatically swept into one of three money market funds. You can just make sure that you select the SPAXX or FZFXX funds which are both government money market funds. Current 7-day yield is about 3.3% - [https://www.fidelity.com/mutual-funds/fidelity-funds/money-market-funds-fcash](https://www.fidelity.com/mutual-funds/fidelity-funds/money-market-funds-fcash) ​ >CD laddering be something appropriate to consider? Yes - you can ladder with CDs or bonds. I use bond funds because it's easier for me - but these mature annually so may be inappropriate for you. But there are short duration CDs and treasuries that you can use. Since you have a Fidelity account - Fidelity has a ladder explanation here - [https://www.fidelity.com/fixed-income-bonds/cd-ladders](https://www.fidelity.com/fixed-income-bonds/cd-ladders) and a ladder tool here - [https://fixedincome.fidelity.com/ftgw/fi/FILanding#tbcds|treasury|cd-new-issue](https://fixedincome.fidelity.com/ftgw/fi/FILanding#tbcds|treasury|cd-new-issue) ​ >high yield bond funds VERY IMPORTANT NOTE - a high-yield bond is a term used to describe a junk bond. These are bonds which are considered riskier in quality. A safer bond fund are either US Treasuries (kinda like the core money market funds at Fidelity) or an investment grade corporate bond.
I know with fidelity the two options for a core account (SPAXX and FZFXX) are a money market account or a money market mutual fund, mostly invested in US treasury securities. If you have a problem with them going bad then I wouldn’t trust my money in any US bank.
I was able to buy individual treasuries through Fidelity. They said if it doesn’t work on their platform then call in and give them the CUSIP and they’ll process it at no charge. Also, if you hold cash in one of their money market core funds (such as FZFXX) it currently has a 7 day yield of 2.55%. Much better than what you can get at a big bank
> Just wondering, what's the drawbacks of switching from FCASH? Depends on what you are switching to. Switching to SPAXX or FZFXX, no no practical drawbacks. Though you should look at [FZDXX](https://fundresearch.fidelity.com/mutual-funds/summary/31617H805#). It has a 100k minimum, but you easily meet that, and it pays more(because of the lower ER). > Are there risks I should be aware of? MMF's are only covered by [SIPC](https://www.sipc.org/for-investors) and not by the FDIC, so you are not covered if Fidelity goes bankrupt tomorrow. Of course Fidelity handles more money than the US govt spends in a year(literally trillions of dollars), so I think you'll be fine :) Of course FIDC only covers $250k/person/bank, so you would have to split across at least 2 banks to be covered by FDIC if that was important to you. Or be lazy and let [Fidelity do it for you](https://accountopening.fidelity.com/ftgw/aong/aongapp/fdicBankList), just know you won't be earning 2% on your cash.