SPAXX

benskieast

I think we need to think of a way to reform 401(k) regulations. They are way more expensive to operate than IRA’s yet it’s not clear those regulations are actually protecting workers. Meanwhile the DIY approach seems to be at the other extreme. The brokers should be expected to default to the separate TDF and a typical or slightly aggressive savings level. Changing the default contribution is easy. Having a mandated default level of 16-20% would be totally easy way to boost savings rates. In addition retirement calculator never seem able to tell you what to contribute. Empower seems unable to even let me adjust the contribution rate on its calculator. Fidelity lets you adjust it, but you need to tell Fidelity what your needs are. I don’t know. I am not even sure if it’s including retirement contributions in its income calculation. Allowing people to opt out is good to help people who need money now or are saving for a down payment. My plan is to focus on retirement and contribute 24% till I have a good path to owning a home and then go down to 6% or 7% to save for a down payment. Brokers also just need to look into a tutorial mode, to just guide people through tradeoffs and investing terms as they set up accounts. Go to R/Fidelity and half the questions are about simple stuff like core positions and SPAXX.

dieci10x

I cash in a Fidelity SPAXX Never thought that it wasn’t covered by the FDIC thanks so much for sharing that!

crazybutthole

Make a fidelity account. If you are ok with risk out half (or more) in VOO. It is the sp500. Whatever you want to be safe with - put in SPAXX. It makes 4.98% annual % and gets paid out every month. For $30,000 you would make about $130 per month just for having it in SPAXX and it's fully insured and no risk.

myd0gcouldnt_guess

I also have the Fidelity SPAXX but that’s a separate bucket for brokerage acct investing. My emergency fund is just held at a local credit union. One thing to note about brokerage accounts is they aren’t insured by the FDIC or NCUA (usually). May or may not be important to you. Care to share where your 5% checking account is? I work in finance and have never seen such a thing. Money market products can usually be used as a draw for checks but it isn’t strictly a checking account and is usually subject to monthly withdrawal limits.

greytoc

Geesh - I can't believe you are basing your comments on the failure of Community Bankers MMF. Money market funds have not worked that way in decades. It is the only fund other than the reserve fund in 2008 that has ever broken the buck. Rule 2a-7 would never allow SPAXX to lose value in the same way as you suggest. And the liquidity rules that were proposed and adopted last year reduce liquidity risks even more. The only recent time that there was a liquidity risk was during the Covid crisis - but all redemptions were met by every money market fund in the US because the Fed provided a temporary backstop liquidity facility. The number of money market funds that have failed in history in the US in 2. The number of banks that have failed in the US just in 2023 that entered FDIC receivership is 5. And as far as I know - no brokers have entered into SIPC receivership in years.

benskieast

FDIC is better in that the underlying assets at Signature bank losses value and my grandparents can still right checks from that account as if nothing happened and lost nothing. If SPAXX lost money somehow you would lose money. A bank run on SPAXX is less likely because unlike say SVB the NAV of the accounts would be marked down as soon as the paper loss occurred. As opposed to after the run. Because of that for uninsured deposits at SVB there share of the paper losses were growing due to the run, on top of the fire sale related losses. Derivatives were involved in the “Community Bankers U.S. Government Money Market Fund” the only government money market fund to lose value. It also wasn’t open to small investors.

Glutton_Sea

I took my profits as well, sold all Apple stock. Currently earnings 5 percent interest from SPAXX. Also bought 🍎 puts

ozzzzzzo

I have some money sitting in FIDELITY GOVERNMENT CASH RESERVES and in FIDELITY GOVERNMENT MONEY MARKET (SPAXX). I would like to start moving this money into FID L/T TREASURY BOND INDEX FUND (FNBGX), FIDELITY ZERO INTERNATIONAL INDEX (FZILX), and into FIDELITY ZERO TOTAL MARKET INDEX (FZROX). When and how do I do it? For the 'when' the market seems extended and it seems to be under some pressure so I wonder if I should wait. For the 'how', when I can get the 'when' figured out, I am thinking to invest gradually, using cost averaging. Please comment and suggest. Much appreciated.

PIMP420757

Not to mention don’t you like earning 5% in SPAXX or whatever money market your cash is swept in? Be careful what you wish for, I’m liking my free 5%

A20Havoc

Fidelity SPAXX - U.S. government money market fund. Paying 5%, fully liquid, virtually no risk.

AdRelevant4100

hi guys, i’m a teenager and i’ve started investing a year ago. i got my brother to start investing too and we both use fidelity youth accounts. fidelity automatically puts our money into a money market fund and claims we can make 5% every week using SPAXX in dividends (not sure if they mean dividends?). however, according to my math we only make 0.5%? my brother currently has 694.31 invested into this, but his dividends are only 3.42 instead of $34? i definitely feel like i’m missing something. if anyone could help me make sense of this it would be very much appreciated!

dannydigtl

Same. SPAXX it up

AICHEngineer

I don't know. SPAXX is 4.96 and fdlxx is 4.94%. I didn't even know what FDLXX was, SPAXX was just my core position when I opened my IRA

mHo2

Why SPAXX over FDLXX?

crazybutthole

If you went to fidelity and got on SPAXX you make a lot more than 4.35% (Usually around 4.96, 4.98 or 5.02% it varies each month but a lot more than 4.35)

Chad__Tyrone

I'm starting to really like my SPAXX @ 4.95% APY, more and more with each passing week 

AICHEngineer

SPAXX is a great no risk investment for this time frame. You may also consider a tax efficient short term vehicle like BOXX. Box spread synthetically recreates the risk free rate of short term treasuries, but is a bit more tax efficient which offsets the expense.

ElectricOne55

I thought of leaving it in SPAXX too, but I think spaxx has an expense ratio.

Master_Wanger

Basically the same thing. Idk. SPAXX is 4.78 something something.

Master_Wanger

Keeping it in SPAXX Money Market, approx 5% yield.

Sharaku_US

You're ahead of most people your age by just asking the question. My suggestion is do take some money out to buy a reliable used car, put the rest in a brokerage that offers high interest savings (Fidelity SPAXX) which is the same as cash. Put the max you can in a Roth IRA and use that money on a diversified ETF. Add the max contribution yearly to that Roth IRA and keep 6 months of emergency money in the brokerage account.

Phillyfreak5

Fidelity SPAXX is my HYSA and I have many TBills ladders. Fuck banks

value1024

"I could understand trying to get more yield by taking more duration risk and tying up in bills and running a longer short put campaign. Or paying the fees on BOXX or SGOV. Or using a box spread. Or getting poor margin/EOD pricing on **SPAXX**" Right ; ) Sorry too much going on right now but you get it, and you know I get it. Cheers!

OurNewestMember

I didn't expect you to double down on arguments about puts being expensive when they usually cost less than calls in nominal and real terms for retail (I assume that's what you mean by "See equidistant extrinsic values for a call and a put. See the difference?" -- which wouldn't have to do with puts because you can see the extrinsic difference in ITM calls vs OTM calls and similar for puts vs puts -- it's not specific to puts, hence my comment about call-put parity) Here's an example: * 7 DTE SPY -16-delta OTM put (spot at 509, strike at 498) 0.95/sh for IV of 16.32% * collect 1 week interest on $49.8k cash deposit * best offer on $49k notional of 8-day T bill is 99.919 (yield 4.166%) * I could understand trying to get more yield by taking more duration risk and tying up in bills and running a longer short put campaign. Or paying the fees on BOXX or SGOV. Or using a box spread. Or getting poor margin/EOD pricing on SPAXX, etc * +$47.75/7 days if you can get 5% APR * 7 DTE SPY 84-delta ITM call (498 strike) 1.48/sh extrinsic (about 12.93/sh total premium) * share should accumulate about 7 days of dividend (about $12.78/round lot/7 days) * $53/contract excess extrinsic to the put * bid-ask spread is like 0.08/sh, so we might subtract $1-$2/contract as a liquidity fee Market data suggests you'd make $17/week extra with the covered call with fewer transactions and less duration risk ($148 + $12.78 - $1) - ($95 + $47.75) (ie, "You are unlikely to collect more interest on the put premiums than you would on the shares + call premium.") -- that's why I didn't expect a double down on the "puts are expensive" concept, lol. Bonus points for figuring out why this is the case for retail traders. And thanks on the cake day. It was a nice day, lol.

__chrd__

SPX is not the same as SPAXX.

vikingpower89

Take responsibility for your own money. If you don't know what you're doing, put it in SPAXX with Fidelity or some HYSA (high yield savings account) and let it compound until you do know what you're doing. If you're set on investing in the stock market. Choose an index fund like VOO or growth fund like VUG.

vikingpower89

Put it in SPAXX through Fidelity. About 5% interest and fully liquid at all times.

crazybutthole

If you open a fidelity account and put your money in SPAXX - you get paid approximately 5%apr - interest each month on the first (not 5% per month it's per year) it's actually about 0.42% per month I have one account with $20000 in it and it makes $84 per month. Your money is available -your money is able to be transferred to your checking account in 1-2 days.

eghost57

Keeping your retirement account in SPAXX is a horrible idea and doesn't at all address the fact that Robinhood adds 3% of your total transfer into your account. You can invest it all in USFR at Robinhood if want want to do something like sitting in MMFs.

bigsilverhotdog

Fidelity cash account defaults to SPAXX money market and has most bank features. It's what I use. Highly recommended.

Caboun6828

Or just roll it over to fidelity and put it in SPAXX core and get 5%

Biggiesmalls_____

Super interesting. My bank sucks! Looking to switch was gonna move all to navy fed but this SPAXX thing has me intrigued instead

Biggiesmalls_____

How does this work?? Are you talking about like SPAXX?

OxfordBungee

The recent purchase you're talking about is 99.589722 per 100 at maturity. The cash will be deducted from your bank on the issue date which is 04/30/2024. If you have the cash in a money market fund like SPAXX, your balance will accrue interest until that date. As for the yield, the annualized yield is (100/99.589722)^(52/4)-1 which is 5.49%.

Worldly-Whole-3794

Hello! Relatively young/new investor here with a quick question. I have about $14,000 in a fidelity brokerage account right now. I am pretty risk averse with the money because I am hoping to use it as part of a down payment on a house in the next \~5 years. Right now, some of it is in an S&P500 etf but the rest is in the standard fidelity money market SPAXX yielding 4.95%. I am considering moving it to a high yield bond ETF (FDHY) for the higher yield, but am unsure exactly how to assess the relative risks. Anyone have any advise? Thanks in advance!

pixelblue1

Fidelity SPAXX money market is 4.97% interest, not bad

MammothConscious2261

Hi! I need to choose funds for my new 401k plan. I wanted something like Fidelity’s SPAXX money market that has been paying 5% for about a year now because in early February, I’ll liquid to buy company stock. Unfortunately, there’s no money markets to choose. I don’t know much about how to read yield/returns on bond or capital preservation funds. My goal is capital preservation but I’m not sure that the Putnam Stable Value Fund is truly the best choice. Is that what you would choose? Bond choices: FXNAX Fidelity US Bond Index PIMIX PIMCO Income Institutional VIIGX Vanguard Intermediate-Term Treasury Index Institutional VTAPX Vanguard Short-Term Inflation Protected Sec Index Admiral Capital Preservation: PSVF15 Putnam Stable Value Fund 15bps

Pbank837

If you’re looking to stay liquid, just put your $$ I a a money market fund. Like SPAXX through fidelity. Fluctuates based on rates, but pays monthly and has been hovering around 5% yield (per year)

FatFingerMuppet

> the CMA is adding the Fidelity Government Money Market Fund (SPAXX) an a core position option. Source: https://www.mymoneyblog.com/fidelity-cash-management-account-new-core-money-market-fund-option.html Then I'll leave the above in your care in case it helps. Present day the Fidelity cash management account (CMA) only allows an FDIC insured option as its core position. Come June '24, they're going to allow the core position option of $SPAXX.

uqubar

Look for cash money market funds that pay 4.5% in interest right now. Until the fed changes things anyway. Something like SPAXX at Fidelity.

4score-7

Dude, I’ve been pulling it just in money market funds like SPAXX. Yeah, it’s got internal fees, but with a large enough position, it’s a nice income infusion for those that need it. It’s one reason why I’ve been ok continuing to rent for these last two years.

olivefob

Gonna start investing into SPAXX

op_loves_boobs

Robinhood's rate is 5% if you have Gold no? So $5/month to get 5%. I'm pretty sure Fidelity right around there, there's kind of a reason why SPAXX is the largest money market in the world dude. As of April 19th, 2024 [SPAXX's 7-Day Yield is 4.95% without any subscription fee](https://fundresearch.fidelity.com/mutual-funds/summary/31617H102) [FDLXX's 7-Day Yield is 4.93% without any subscription fee](https://fundresearch.fidelity.com/mutual-funds/summary/31617H300) SPAXX and FDLXX both operate as cash sweeps, so you can make trades, use your debit card (ATM fees refunded on CMAs) or free wire transfer to other accounts [Vanguard's VMFXX's 7-Day Yield is 5.27% without any subscription fee](https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx#) FDLXX and VMFXX are heavily composed of U.S. T-Bills, states are not legally allowed to tax you on the interest generated from T-Bills. [Use the Money Market Optimizer yourself and click on the VgBestNow and Fidelity BestNow tabs and look for yourself](https://docs.google.com/spreadsheets/d/1ybZv8xuZ1KGSPn4y2gDEycPQX0KJpLbuzFg3hUReJB4/edit#gid=1574271208) If you live in a state with state income tax: **Your After-Tax Yield from Robinhood is guaranteed to be lower than FDLXX or VMFXX** **If you live in a state without state income tax, then you're losing cash at Robinhood when you could purchase SPRXX instead and achieve the same cash sweep capabilities** So your After-Tax yield is lower with Robinhood and then you spend $60/year for that privilege. Make the numbers make sense to me dawg. That doesn't even include the cheat code of purchasing [BlackRock's Institutional TTTXX Fund at 5.18%](https://www.blackrock.com/cash/en-us/products/282697/blf-treasury-trust-fund) through Merrill Edge to avoid the $3 million dollar minimum investment requirement. > The 3% match also includes ongoing contributions forever. But part of that 3% match deal is you have to keep your money at Robinhood for 5 years regardless of their behavior to keep the match. I'm not knocking anyone for taking advantage of the 3% match but the company behind it doesn't have the best track record in terms of systems design and management: ControlTheNarrative, IR0NYMAN, GME. . . But this message isn't for you /u/E_coli42, it's for anybody else that stumbles across this post and hopefully realize they should do their research into their brokerages and not blindly dump all your money into one without knowing what they're about.

E_coli42

SPAXX is less than robinhood's rate right now. Robinhood is really trying to pull people in right now so it probably won't decrease for a while. When it does decrease, I can just move my money again lmao. The 3% match also includes ongoing contributions forever. Fidelity doesn't do that.

itemluminouswadison

> you essentially can’t spend it anywhere that's not correct at all, though. you can pay with a lot of payment processors using btc directly or use a card that auto-liquidates btc so you can spend as cash > why would you spend it if the whole reason most people buy it as an investment people also do this with stocks and bonds, (and handbags and watches and corn and coffee), and liquidate when its time to use it as money. i hold SPAXX in my fidelity core position which autoliquidates as cash when i use it. it's pretty similar in that regard > It has no intrinsic value since it produces mining btc costs energy, and miners aren't going to pay a power bill and then give away the btc and take a loss. there is a floor on the "intrinsic value" > It’s not even tangible like other non-income producing assets like art most cash is not tangible either; they're numbers in a bank database. you can get physical cash to represent it, but at the end of the day, it starts as numbers, just like btc. you could use this exact argument against any country's currency, comparing it to art is a strange comparison > It has no utility what utility does a piece of USD have? none either. currencies aren't only usable due to intrinsic utility, but being good at being a currency. btc is quite good at being a currency > Crypto relies completely on great fool theory. The only way you can make money with crypto is if someone is dumb enough to buy it at a higher price later that could be said about any appreciable asset. but since a home builder can't directly barter his skills for someone elses skills, we need a currency. some currencies are better than others. btc is another currency that, so far, has proven that it's pretty good at the things we need good currencies to do

op_loves_boobs

Fidelity literally offers SPAXX 5% as a default core position without paying $5 for Robinhood Gold like a dummy. Then I have weekly auto convert to FDLXX to get that 5% state income tax free because you know actual fucking brokerages. When I’m selling cash-secured puts to you regards, I still get paid that state income tax free interest until I’m called. The 3% IRA match is a limited-time offer to make guys like you who cream in their pants from a brokerage UI despite submitting losses to your accountant yearly. Fucking Children lol

1hotjava

SWPXX Note that you actively have to put the money in there u like Fidelity and Vanguard where the settlement fund is in SPAXX and VMFXX

Firsttimepostr

Is this a better option than a HYSA? Curious because I have a HYSA earning roughly 4.75%, is SPAXX as flexible?

Somoch-MoraguerRRR

I see your SPAXX and raise you FDLXX which is exempt from state and local taxes and therefore likely carries a higher after tax yield unless you live in a tax free state!

Sharaku_US

HYSA like everyone else said. My personal choice is SPAXX at Fidelity which is as good as cash and pays 5% or so. There are plenty of online banks and local CU that'll give you good rates. And pay off debts ASAP.

Sharaku_US

My kids were all setup via Fidelity, and I can see all their trades - we discuss it over chats and talk about gains and losses. I can also send them money immediately from my account to theirs for allowance, reimbursement, etc. Good to know in an emergency they have access to money if needed. They use the debit card to buy stuff they want, they also make pretty good rates on SPAXX for their cash holdings.

Displaced_in_Space

Well, SPAXX (your holding position at Fidelity) is currently paying 4.96% or so?

coriolis7

I’ve got about $25k in cash, between an emergency fund and saving for future expenses (auto insurance, next month’s expenses, vacation fund, etc). I typically keep $3k in a MMF and use the rest to buy 4wk treasury notes. I’ll often stagger them so they pay out every other week. It’s only an extra $10 a month I get by buying notes vs all SPAXX, but it only takes like 1 minute every other week to do in Fidelity.

HappyLittleUnderwear

You can get 50bps higher yield from buying 4wk treasuries set to auto invest, not taking into account SPAXX has a .42% expense ratio and worse tax efficiency. It’s convenient but there’s definitely a price for that convenience. I think the investing based on age makes sense from an asset allocation perspective but I think our friend here is just looking for alternatives to park his emergency fund, which should be considered outside of his investment portfolio mix

lifesabeeatch

Treasury bills are earning 5.1-5.3% right now and earnings are state tax free (unlike the Fidelity SPAXX account suggested by others). You can buy from Treasury Direct, but it's easier to use Fidelity or Schwab. These interest rates may sustain for the full 3 years, but these are short duration investments of 4-52 weeks and if rates drop you can put the money somewhere else.

TreesACrowd

Treasuries, or funds with treasuries as the underlying asset, can have very real benefits over SPAXX in a state with high income tax.

Duke_Shambles

Fidelity brokerage account cash in SPAXX is basically my HYSA. I'd argue going further than that and actually buying treasuries is kind of pointless in most cases.

fledgling66

Symbol Total Gain/Loss Percent Of Account SPAXX (cash) 15.38% GOOGL 43.72% 12.90% VOO 19.87% 12.47% UNH -3.82% 9.67% VTI 18.06% 8.14% QCLN -22.69% 5.76% TSM 47.95% 5.56% TMF -26.00% 4.84% PARA -3.62% 4.34% DDOG 69.98% 4.33% BRKB 8.87% 4.31% CRSP -16.88% 3.70% XLK 0.43% 1.68% RSP 12.32% 1.51% ENLV -35.97% 1.49% BAC 42.02% 1.35% EWJ 14.50% 1.32% BN 29.93% 1.29% QQQM 0.69% 0.86% GRND 101.39% 0.84% SPMD 18.15% 0.58% MRK 63.72% 0.40% AVUV 27.35% 0.34% YNDX -0.70% 0.32% JPM -0.52% 0.23% DXJ 8.19% 0.20% VXUS -0.54% 0.11% It is far from the set-it-and-forget-it portfolio I wish to have one day, but here's what I have in Fidelity. Also have a Roth IRA maxed out in a target retirement fund (2050) and about $10k in the bank.

rastagomez

If you have a Fidelity brokerage account, your can use SPAXX as your core settlement position and it will earn \~5% until you can determine a proper allocation to treasuries once you better educate yourself. How much you invest in bonds is a personal choice and should be based on your age, investment timeline and risk tolerance.

bmwbags

Appreciate the advice good luck with the listing. Might just throw it in SPAXX, I already use fidelity.

fookengruvin

I'm doing the same in an investing account with Fidelity. The money market fund SPAXX pays out 5% right now.

lucid_scheming

*for now. SPAXX paying out like it is currently is a very recent trend, and won’t last forever.

Lamprey45

SPAXX is nice but it does have a relatively high expense ratio (.42%) which reduces its effective return to a pretty middle of the pack HYSA… something I’m sure you’re aware of.

LAW9960

I put my savings in my Fidelity cash management. You can buy SPAXX in cash management account and it will automatically liquidate whenever you make a purchase with CMA debit card.

InjuryIll2998

Okay put your money in SPAXX like an adult and you’ll still get 4.95%

Frank_Caswole

SPAXX has a 4.95% 7-day yield still.

Chipware

Fidelity has good fills and SPAXX which earsn you 5% automatically on any cash in your account. Also you'll earn that 5% on cash secured puts and naked calls. Fidelity's Active Trader Pro is garbage. TDA/Schwab also has good fills, no SPAXX but their trading interface is good.

atplace

Yes! SPAXX is great in the current market.

CelticsWin7

Yep. I use Fidelity SPAXX money market is currently offering 4.95%

midimurph

I recommend starting with 100% allocation in VOO. I wouldn't overthink it past that if your just starting out with $1k. Setup auto invest for 5-20% of your take home pay into VOO no matter if it's going up or down. I do half of that 5-20% in my wealthfront HYSA for a guaranteed 5% return and quick access to my money in an emergency. don't withdraw anything until absolutely necessary. define your budget, automate your payments, and forget about. fine tuning your portfolio has minimal value when just starting out, but if you want to nerd out then look into some ETFs like QQQM, XLK, SPAXX, and SCHD.

andybmcc

This is what I'd do if I were in that position. I just hold cash in my Fidelity settlement position (SPAXX). It's yielding around 5% right now, and will likely track close to HYSA rates unless something strange happens.

EvictionSpecialist

I’m fine with SPAXX at 4.9X right now.

Kraftwerk123

38, USA Not a whole lot of time on my hands working, married, 2 kids. Have a 401K through work, with employer match at 5%, currently contributing 7%. Have 2 UGMA's for kids contributing $100 a month to each, only holding FZROX in there. I have a taxable account, with only ITOT in it, contributing $200 a month to that, while $200 stays in the SPAXX account for "just in case". have a HSA through work also, contribute $200 a month to that as well. My Roth is where I am iffy on, have been contributing full amount for the last 5 years. But have moved what's in the Roth around here or there. My question is, the Roth currently holds SCHD, FDEWX which is a target date fund, and FSKAX. Is it worth while to keep this target date fund in there? or just move all that into FSKAX which has out performed the target date fund for quite a while now. Both have almost the same amount contributed, while FSKAX has "grown" about $4000 more over the course of a few years. I try to keep everything "set it and forget it" and just check on each every other month. Just not sure if its worth the growth to keep the target date there, and move that money into FSKAX or not. Any info/help would be greatly appreciated.

Somoch-MoraguerRRR

I’m a crypto degen and I’m here to tell you: please don’t put a significant amount into crypto, especially as crypto markets are just setting new all time highs, *especially* if you have no other investments to fall back on. First, create an account with a major brokerage. I like Fidelity for a bunch of reasons (great funds, better trading tools, more flexible than Vanguard, lets you dabble in crypto if you really want to, great checking account product too) Then ask yourself: if the market saw a big contraction in the next year and your portfolio lost 30% of its value, how would you feel? Do you want to use this money for anything in the next 5 years? 10 years? 20? I’ll say that if you plan to use the money in five years or less, put all of it in a money market fund. SPAXX is great. FDLXX has a roughly similar yield but is not subject to state and local taxes because it invests mostly in treasuries. If you live in a state with income tax or you are a high earner, FDLXX may provide better after-tax returns than SPAXX. You should research more from here if this sounds appealing. If you are not comfortable stomaching a possible 30% loss in value over the next 10 years, you should invest in stocks but tilt more conservative with a bond allocation. Anywhere between 10-40% of the money should go into a low cost, diversified bond fund like BND. The remainder should go into diversified index funds—either some mix of US and International like FSKAX or VTI plus FTIHX or VXUS. Or you could take the lazy (but still extremely valid and maybe even preferable) approach of putting all of your stock allocation—that is, whatever you don’t put into bonds—into a global fund like VT. If you have some risk tolerance and a longer time horizon, I would say it’s worth considering a 5% allocation to Bitcoin either by holding it directly on Fidelity Crypto or Coinbase or whatever, or by holding one of the Bitcoin ETFs like FBTC or IBIT. But don’t go crazy. Crypto his high risk / high reward. Most of the folks you see here will tell you it’s tantamount to gambling. I disagree on balance, but they’re not entirely off base. This is an entire debate unto itself.

BigDaddyFatRacks

To be fair the brokerage payments compounding would still be completely insane if we’re talking thousands of years. Just SPAXX would make you loaded

KnightBozo

Hi, I will say am a fan of the new options UI. However I would still like to know if I will be able to earn interest on the collateral set aside for sold CSPs, as earning interest on collateral via fidelity's SPAXX cash sweep is one of my favorite features of their platform. Thanks.

greytoc

It depends on your account size. The comment by u/vansterdam_city is about a portfolio margin account that means they have more than 100k in the account. Less than 100k - and Ibkr prorates based on account size. And there is no interest paid on less than 10k and the rate is less if it's not an Ibkr Pro account. The calculation is here - [https://www.interactivebrokers.com/en/pricing/pricing-calculations-int.php](https://www.interactivebrokers.com/en/pricing/pricing-calculations-int.php) Summary here - [https://www.interactivebrokers.com/en/accounts/fees/pricing-interest-rates.php](https://www.interactivebrokers.com/en/accounts/fees/pricing-interest-rates.php) If you are trading a smaller account and you don't qualify for portfolio margin - and you use option writing strategies - it's usually simpler to use a broker that offers a money market sweep like Fidelity which currently sweeps to SPAXX currently with a 5.01% 7day SEC yield. Brokers like Schwab/TDA require manual cash management but Schwab's SWVXX currently has a 5.1% 7day SEC yield. Unless you are an active trader - manual cash management may be inconvenient. In general, if you are using put writing strategies - it never makes sense to use a broker like Robinhood when the risk-free rate is high and you cannot recover the interest rate drag. If you are familiar with basic option pricing models - if you look at Rho - when interest rates increase, put premiums decrease so if you can't generate yield on the collateral, you are not accounting for impact of the risk-free rate in the short put position.

CriticismMost3450

This is very similar to selling OTM puts. Obviously selling the ITM CC would also net you any dividend payments…if the stock isn’t called from you overnight. CC however, you have to tie up your cash…while selling puts only ties up margin available, and you can keep the cash in SPAXX, collect the put premium and 5% interest until/if assigned. —-A move that I like to use is sell an ITM CC, then use the margin to sell an OTM put…and buy 2 OTM puts to protect the downside…I rarely sell ITM CC as a standalone trade.

alwayslookingout

Fidelity has SPAXX, which is technically better than Vanguard’s VMFXX because it’s automatically converted over instead of requiring you to buy the mutual fund.

PIMP420757

I did and that was my take, now I’m second guessing it but I‘m still hoping that’s the case and unemployment comes in hot and it solidifies June reduction. Although I also like my SPAXX getting 5% so there’s that lol

speedlever

SPAXX is paying 5% so what's the point of dealing with treasuries?

efplaya

So SPAXX would still be taxed at the federal rate, correct?

McKnuckle_Brewery

SPAXX is about 40% state tax exempt, FDLXX is 90%. Municipal bond funds are usually only exempt in states where they are issued. FTEXX is in this document, so you can look up your state: https://www.fidelity.com/bin-public/060\_www\_fidelity\_com/documents/taxes/2023-tei-by-year.pdf

Beta_Nerdy

The 6-month CD is set for that period but an investment like SGOV, USFR, FLOT, or a Money Market Mutual Fund like SPAXX will likely start dropping its interest rate yield by early Summer.

Terrible_Champion298

Then I see no difference in using the Fidelity perk of using SPAXX as an automatic sweep account versus fixed income assets you already own and are transferring to your new brokerage. Be aware that American brokerages are, by law, extremely sensitive to money laundering schemes and will freeze an account faster than you can say, “But I’m new here and didn’t understand all the players had to be revealed,” all the addresses had to be kept updated, everything works better is the brokerage is synced to an American bank account that has its own criteria for detecting illegal use, etc. In short, you should be squeaky clean and make zero mistakes.

Key-Mark4536

You have it correct: the money stays in SPAXX and earns the SPAXX rate until the order executes.  The closest thing to a catch is that it’s not reserved or anything; you could forget about your limit orders and invest that money in something else, then the limit order tries to trigger and fails (or dips into margin if you have it) because you don’t have the cash.

free_username_

Just open a fidelity account and place it in the default cash position (SPAXX) or if you live in a place with state tax FDXX. 5% yield.

polandtown

FZFXX qualify? noobie here. I'm comparing it to SPAXX, of which it's interest is taxed? Followup noobie question, I assume one accrues interest daily. Is that considered short term capital gains taxable? I appreciate your insight as I'm considering moving my HYSA \~4.5 over to Fidelity, especially if I can save a bit on taxes.

get_it_together1

For fidelity you might need to choose the core position on your accounts. This is where will money will sit by default. I recommend starting with SPAXX, or you can research the money market account you want. This way all money you deposit into your accounts will get 5% interest while you figure out which mutual fund or ETF to buy.

kittykatzmeowmeow

Get rid of the dividend ETF and SPAXX, no need with your time horizon.

andybb311

But the Robinhood Roth doesn’t auto SPAXX (4.96%) your cash, that’s a deal breaker alone never mind having to keep it in the hood for 5 years or you pay it back

get_it_together1

Any good brokerage will let your cash sit in a high yield fund, no need to split really. Vanguard has a money market fund (VMFXX) and fidelity lets you specify a fund (e.g. SPAXX). You can transfer your entire balance except what you need available as immediately accessible cash and you’ll instantly double your interest income (VMFXX is at 5% right now). Then you can decide how to move money into ETFs or mutual funds.

paq12x

I am in on AAPL and a fu*k ton of money in SGOV and SPAXX. Too chicken to jump in at these valuations. 5% risk-free is not bad at all. If all your debts are paid off, a huge chunk of inflation does not apply to you.

Key-Mark4536

I can think of two things:  1. Interest - Your cash balance is automatically allocated to SPAXX or FDRXX, both of which are paying about 5%. On $500 that’s something like 6 cents a day.  2. They may not have been able to buy that exact amount of VOO. Trades get rounded down to the nearest cent or 0.001 shares. If you’d tried to buy $500 of VOO at today’s open ($469.25) you’d get 1.065 shares worth $499.75. That next 0.001 share would have put you over, so they didn’t. 

toomuchtodotoday

> Wells Fargo Bruh. Just open a Fidelity or Schwab account. Use their cash management account for your checking, free everything. Invest in their government money market fund (SPAXX @ Fidelity, unsure what it is at Schwab).

crazybutthole

If you want guaranteed passive income that keeps rolling in every month you could save $500,000. Put that in fidelity in SPAXX and it will pay you $2179 per month. On the first every month. If it's taking a long time to save that much don't worry the first $100k is the hardest after that it comes quickly.

Angry_Citizen_CoH

A lot depends on your financial and family situation. Do you have supportive parents who can bail you out if you need, or give you some rent money fast that you'd then pay back? Are you relatively stable? Are you not in any serious, high interest debt? --If so, and you make it clear with your parents, then I'd put your excess money into a nice, safe fund like the SPY ticker. It tracks something called the S&P500, which are the 500 biggest and most successful companies in the US. It's probably the safest, surest way to make lots of money over a long period of time. Note that sometimes the stock market will crash, and it'll look a bit bleak during those times, but if you ride it out that index will always go back up.  You'll need to open something called an investment account with a broker. Mine is through Fidelity, and it works fine. --If you aren't well supported by parents or have high interest debt, you'll need to focus first on saving money or paying the debt: Pay the debt first; credit card debt especially will destroy you over time because it is very high interest. Never ever use a credit card unless you have the discipline to pay it off in full every single month (which is a good way to build credit btw), or unless it's a matter of literal survival. Car debt or house debt (mortgage) should be considered very carefully before entering into a loan. If you can't guarantee a yearly return higher than your interest paid, then it's best to use extra money to pay those off ASAP too. If you have no debt, or if you only have student loan debt, then focus instead on building a rainy day fund. You can again use Fidelity for this, but don't buy any stocks. Just let them put it in a monetary fund (SPAXX) so it doesn't lose value from inflation. You can withdraw it when and if you need it, though I think there may be a delay of a couple days. A good target for a rainy day fund is about six months of rent. I have a year's worth saved in mine because I'm paranoid.  --When you're more stable and have a career or decent paying job, then you can take some risks with your money and try to grow it. But for now, you'll need to prioritize fiscal responsibility, which means minimizing your risks.  While you're in school, learn about stocks. A good way to do it is something called paper trading. Basically, you invent an amount of money that you pretend to have, then pretend to invest in a certain amount of stock. Then see how the price changes, and how you profit or lose over time. You'll get better instincts and over time you'll learn why stocks moved up or down. Then when you're older, you'll be primed for financial success. Which, let me tell you, is pretty awesome to have. No more worrying about bills and food and stuff. It really feels good to be responsible. If you do it right, you'll avoid all kinds of issues your peers will have.

CrimsonBrit

**Does anyone else feel like we’re in a new era of investing with the high rates of Money Market Funds (MMF)?** I feel quite good about my liquid, taxable brokerage account being 25% cash ($SPAXX) and still earning 5%. Since I’m reinvesting those dividends it’ll compound over time and then I’ll have that cash available to deploy if need be. Simultaneously I’m depositing a fixed amount each month and DCA’ing using Fidelity’s auto investing feature where I put 60% in to ETFs and 40% in to solid, megacap growth companies. I’ve never felt so at ease passive investing! I’m almost bored at this point waiting for time to pass 😂

External-Conflict500

I did 30% FXAIX, 30% FCNTX, 30% FSPGX and 10% in SPAXX for trading options

GOOGAMZNGPT4

Open a taxable brokerage account on Fidelity, load your cash in through your checking account, once the cash settles it will be in SPAXX (core position) , buy FDLXX with your SPAXX position, hold and enjoy 5% cash returns paid out monthly - about $50 per $10k. I haven't quite figured out how to declare the FDLXX interest as state tax free in TurboTax yet, but it's a thing.