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should one keep all their money in one retirement account if it exceeds SIPC protections? for example, schwab and fidelity. prefer fidelity cuz of core money market ability but puttin all the money into fidelity exceeds SIPC protections.
As a long-time Fidelity customer, I can tell you that if you have SPAXX as your core account and let's say you also have some money in another money market fund within the same account and you make a trade but don't have the funds in SPAXX to cover the purchase, they will take it from the other fund. It all shows up as funds available to trade.
Can second. This happened for me with my HSA account. I have all my cash treasury only money market fund and when I purchased a traditional mutual fund, it used the money from my non-core money market fund. I recently asked Fidelity about doingnthis in cash management account to pay bills but they said you can only pay bills from your core account and so to be safe, sell of your non-core mm fund is needed. Not sure if that's true since mm is still counted in available to withdraw, but also dont want to be late on my bills either to test the option
@@johnsonch7292How do you make SWVXX an automatic money sweep option for Schwab? I don't want to have to buy and sell it manually to reinvest the money elsewhere.
Yes please give us info on municipal money market funds. This is all new to me and I'm so interested. I am just about to begin transferring 401K funds into Fidelity
i follow exactly what you mentioned here. FDRXX is my parked cash. When i choose to invest in T bill / brokered CD i use the funds from there. When the funds mature they come into FDRXX thus i get consistently above 4.74% and as high as 5.4 in t Bills.
Always wondered what to do with the leftover from a t-bill purchase. Now I’ll just let the cash sit in spaxx til the next t-bill purchase even if a month away. Thank you very much!
Holy moly, I was just thinking about this subject, and considering whether to park some cash in a high yield savings or just park it in fidelity. Your video came out at the perfect time. The fact the yield considers the expense ratio and that it’s mostly exempt from taxes pushed it over the edge for me. Thank you!
The Schwab Value Advantage Money Fund (SWVXX) is paying 4.97% but you can't make it a "core" position. You have to put in an order to buy it, and another to sell it.
Thanks for the video and shining some light on Fideiity's cash sweep accounts, Jennifer! All of my Fidelity accounts are set to sweep set to SPAXX. I have a small taxable account at Fidelity to hold some cash, like another tier of savings. I try to throw $100 every two weeks in there. It's filling very slowly because I am focusing on Treasuries. SPAXX's rate may not be the highest of the high but it's still way more than my what my bank and credit union offer.
First time watching your video I have the Fidelity premium money market currently paying 5.16, love your video.. looking for an instrument close to 6 %
I have Vanguard and glad I am finally getting 5%. It was crime of the century (one of many) that companies were getting free money for 10+ years buying up everything in sight.
Same. I'm in California and there's often higher thresholds here for tax exemption so I would appreciate learning more about municipal funds from your perspective.
Thank you for the very useful information! I looked at my Fidelity account and discovered when I transferred funds to Fidelity and an agent opened a cash account for me the agent put most of the money in a sweep account on which I make zilch. Moved it all into SPAXX.
These money market funds all hold about 30% in US government securities, so about 70% of the fund returns are taxable. Note that in California, Connecticut, and New York these funds do not hold enough government securities to be tax exempt. So in those states 100% of the fund returns are subject to state and local taxes.
WOW! Thank you so much! I too was stuck on the bank sweep in my 401k from a decision a long time ago. I've been enjoying lots of your videos lately, thank you!
Regarding timezones: I agree you should use EDT (Eastern Daylight Time) rather than EST, (Eastern Standard Time) since EST is 1 hour behind, but until November 5, 2023 most people on the East Coast (New York, for instance) are observing EDT. Yes, you should also use PDT (Pacific Daylight Time) until November as well. Most people just ignore when the wrong term is used since they just interpret it to mean whatever time is currently being observed. There are some instances when it can cause issues, however so better to be accurate. Alternatively, you could just use Eastern Time or Pacific Time and then the assumption would correspond to the currently observed time (daylight savings or not).
Thank you as always! Interesting the detail about less STATE tax liability and the emphasis on IMMEDIATE access and your including SIPC reminder. I plan to use this account more to my advantage; had not fully appreciated this alternative to banks & credit unions.
Long Explanation of Fidelity Cash Management. Folks, I've spent most of today trying to figure out how to set up Fidelity accounts to maximize interest earned from treasury money market accounts in a high tax state, while also utilizing all of the banking features that fidelity makes available (debit card, checks, online bill pay, ach transfers, direct deposit). I'm still in the process of funding my new accounts, so I have not yet implemented this strategy, but I think it will work. First of all, there are two different Fidelity accounts that need to be opened: (1) a Fidelity cash management account, and (2) a Fidelity brokerage account. Cash Management Account. You cannot designate an alternative funding account for Cash Management - the only funding option is a bank account which pays a 2.6% interest rate and the funds are FDIC insured. The cash management account really works just like a good bank account with a debit card, online bill pay, check writing, ach transfers, direct deposit, etd. I believe you could directly purchase Fidelity money market shares in the cash management account, but it is not made for investments. It's really just a bank account. Brokerage Account. The brokerage account is made for investments, but they also have some cash management features like check writing. In a taxable brokerage account you can designate SPAXX or FZFXX (two very similar funds) as alternatives to the FDIC bank funding account. However, you cannot designate FDLXX (which is the treasury only money market account) as an alternative funding account. As I discuss in a minute, I suspect that they precluded FDLXX from being an alternative funding account because they are holding mostly actual treasuries in that account rather than swaps and they are worried about too many people making too many transactions in the account and causing them management difficulties. Swaps are generally shorter term and easier for them to convert to cash. But there are real advantages to those of us in a high tax state to using FDLXX over the settlement fund options. FDLXX: The 7 day yield is currently 4.82%, which is actually higher than the settlement funds (about 4.75%), but most importantly the settlement funds are holding about 85% of their assets in swaps or agency bills which are not exempt from state taxes, while FDLXX is holding 79.71% in actual treasuries which are exempt from state taxes. Also, in states like California and New York, I believe you will get no tax state tax exemption if the fund has less than 50% treasuries, so if the holdings remain for the full year as they are currently, no interest earned on the settlement funds will be exempt from state taxes in a 50% state. While nearly 80% of the interest earned in FDLXX would be exempt from state taxes. So FDLXX is a lot better in any taxable state (higher yield currently and much higher state deductibility). But it's trickier to utilize because it cannot be made a default funding source. The Cash Manager. Don't confuse the cash manager with a cash management account. The cash manager is a feature in a cash management account that can enable you to utilize FDLXX as your primary funding source, although it requires some setup and monitoring. It has three important features: (1) it will give you notice when your cash management funding account is below the amount you set, (2) it will give you notice when your cash management funding account is above the amount you set, and (3) it will allow you to use FDLXX in your brokerage account as a free overdraft source for your cash management account. So let's say you set the cash manager to notify you whenever you have more than $5 in your cash management account. When you get the notice (from direct deposits, check deposits from your cellphone, ACH transfers, whatever) that there is more than $5 in the cash management account, you'll go in and transfer all of the money from the cash management account to FDLXX. When you spend money, you have this automatic self overdraft protection enabled to charge FDLXX for whenever you spend . It will pull whatever you spend from FDLXX to prevent an overdraft. So you basically keep nothing in the cash management account, use the self overdraft protection to cover spending, and the only part that's not automatic is that you have to physically move incoming money to FDLXX. So it sounds pretty good to me - if it works as advertised. There may be a way to push money directly into FDLXX in your brokerage account, but it's not apparent. If not, you'll have to transfer manually when you get notice that incoming funds are in the cash management account. So that's the scoop. If you're in a low tax state and want to use one of the available money market funds as the default funding source for your brokerage account, your transfers into the brokerage account would not have to be transferred manually. But transfers into your cash management account still would have to be manually transferred since they cannot be default funding sources. If anyone has any better solutions, please chime in. I'm new to using Fidelity for money management, but it seems like a really good solution in relation to very low yielding and fully-state-taxable bank accounts. And Fidelity allows living trust accounts and other account types that are very difficult to set up at most of the higher-paying online banks.
Great video! It gives me more information and options than my financial advisors gave me on these core accounts. I’ll have to talk to them about that 😮. Yes please, a video on municipal funds would be helpful. Thanks.
Yep, I transferred all of my TD Ameritrade accounts to Fidelity in January and have not regretted it. And, I have SPAXX in all of the accounts. I also have the BIL ETF in some of the accounts for additional near cash investment for monthly interest.
First time on your channel and very impressed by your informative and no-nonsense summary of the Fidelity Money Market Fund options. If you haven’t already done Schwab and Vanguard, might as well break it down. Thanks.
There are other premium share classes of MM at Fidelity if you have over $100,000 - I use FZDXX (4.94%) in my IRA and FNSXX (5.10%) in my 401k. You may have to call to ask to trade into them.
@@gregharrison76 Correct - a 401k has to have at least $10M of total money market in the plan to add FNSXX as an option (I was a Fidelity employee and they have a lot more than that), that's not an individual investor minimum. It's now returning 5.31%
@@JustMike2 I tried to place an order for FNSXX but was denied so I instead placed an order for FZDXX. The funds are currently in SPRXX so I will gladly take the additional yield.
Fzdxx is the one I use at 4.94% currently. You need 100k though to buy into the fund but then can drop below that and still keep that rate. It’s not a core account but if you make cash withdrawal from the account that it’s in it will draw from that fund.
SPAXX monthly dividends it pays aren't exempt from state income tax. A large part of SPAXX holdings are repos (repurchase agreements) rather than directly-held treasury securities. As I understand it, income from repos is not tax-exempt. In contrast, funds like FDLXX (Fidelity Treasury Only Money Market Fund) and VUSXX (Vanguard Treasury Money Market Fund) hold T-bills directly and are entirely (or almost entirely) state tax-exempt. Can you confirm?
Having spoken to my financial advisor, then I reconfirmed, the money market funds, FDRXX, SPAXX are not covered by FDIC. As such I'm sticking to Fcash and the FDIC insured (within ROTH) According to the fund overview. Below is the risk statement, it essentially spells out that there could be a MM run and its not like cash. You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
"The SIPC will cover up to $500,000 in securities, including a $250,000 limit for cash held in a brokerage account." This statement from the link, specifically says "cash"
To sum up, from what I can gather, SIPC covers the accounts, but the MM funds can go up and down in value, since they are securities. that loss is not covered.
@@DiamondNestEgg thanks for your response, I understand your presentation regarding SIPC now. The entire brokerage account is covered, however the value of an money market fund itself is not insured, if the value drops below one dollar, which is different from cash. This is clearly stated under the fund's individual page, which I have cut and pasted above in my original statement. To simplify, the money market fund is a purchase, much like a stock is a purchase and a stock loss is not insured against loss.
I have brokered cds with Fidelity and the core sweep account is the low yield cash mentioned. However, there's no option to change it! As for my brokerage account, yes the cord account is spaxx.
I'm confused why you did not mention FIDELITY MMKT PREMIUM CLASS FZDXX. You have to invest a minimum of $100K at first, but the balance can fall below that amount and you will still earn the higher interest rate. I'm in FLorida, is this available in other states? Thanks! Love your site and professional delivery!!!
Excellent video!! I was always confused by this and how to change it. By default, Fidelity had made my Core position, in FDIC-Insured Deposit Sweep. I changed to FDRXX.
There is another Fidelity MMkt, FRSXX, which invests almost exclusively in shorter term Treasury securities and is currently yielding 4.85%. I use this in addition to FDRXX, which has more investments in repurchase agreements, as a balance.
Could you do a video on Dollar Cost Averaging method? What is better monthly, bi weekly or else? Set it for beginning of the month, mid month or end of month? Which day of the week is better to buy? Thank you
Since Fidelity's SPAXX is approximately 25% T-bills, 25% Agency securities, and 50% repos, does Fidelity separate out non-taxable with the taxable dividends year end? Seems like Fidelity does not, but would like to understand folks' / DiamondNestEgg's experiences if otherwise, especially in states like CA and NY.
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Thanks for visiting our personal finance channel! We hope this content will help fast-track your financial journey! Everyone's financial journey is different. Please note that: 1) there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances & 2) we will not ask you to call us or send us money in the comments on this channel or any of our other social media accounts, so if you see comment(s) along those lines, it is most likely spam - PLEASE DO NOT ENGAGE WITH SPAMMERS OR GIVE OUT YOUR PERSONAL INFORMATION FOR YOUR OWN SAFETY.
should one keep all their money in one retirement account if it exceeds SIPC protections? for example, schwab and fidelity. prefer fidelity cuz of core money market ability but puttin all the money into fidelity exceeds SIPC protections.
My Fidelity Core was allocated to FDIC. And only yielded 2.47%. I just switched it to SPAXX.
As a long-time Fidelity customer, I can tell you that if you have SPAXX as your core account and let's say you also have some money in another money market fund within the same account and you make a trade but don't have the funds in SPAXX to cover the purchase, they will take it from the other fund. It all shows up as funds available to trade.
Can second. This happened for me with my HSA account. I have all my cash treasury only money market fund and when I purchased a traditional mutual fund, it used the money from my non-core money market fund. I recently asked Fidelity about doingnthis in cash management account to pay bills but they said you can only pay bills from your core account and so to be safe, sell of your non-core mm fund is needed. Not sure if that's true since mm is still counted in available to withdraw, but also dont want to be late on my bills either to test the option
@@nimh168
That isn't true. CMA will use non-core MMFs.
Yes, please do a similar video for Schwab money market funds.
I have to say thank you for this. I have been in FCash for so many years with quite some cash in it 😢 now I just checked and switched all
Yes, please for Vanguard and Charles Schwab
Charles is swvxx paying 4.95 percent now.
Really? I thought they paid much lower interest, I see their fees section
@@johnsonch7292How do you make SWVXX an automatic money sweep option for Schwab? I don't want to have to buy and sell it manually to reinvest the money elsewhere.
@@SleepingMe 7 days yield
@@kearney2398 don't count on it. It is very minimal portion.
Yes please give us info on municipal money market funds. This is all new to me and I'm so interested. I am just about to begin transferring 401K funds into Fidelity
i follow exactly what you mentioned here. FDRXX is my parked cash. When i choose to invest in T bill / brokered CD i use the funds from there. When the funds mature they come into FDRXX thus i get consistently above 4.74% and as high as 5.4 in t Bills.
Thanks for the info
You answered all the questions I had about my money market account perfectly. Thank you!
Yes to info on municipal money market funds!
Always wondered what to do with the leftover from a t-bill purchase. Now I’ll just let the cash sit in spaxx til the next t-bill purchase even if a month away. Thank you very much!
You're welcome - that's what we do as well
Your take on a similar opportunity with Schwab would be great!
Holy moly, I was just thinking about this subject, and considering whether to park some cash in a high yield savings or just park it in fidelity. Your video came out at the perfect time.
The fact the yield considers the expense ratio and that it’s mostly exempt from taxes pushed it over the edge for me. Thank you!
You're welcome
@@Dividendflywheel How do I switch Schwab core to a higher interest rate?
The Schwab Value Advantage Money Fund (SWVXX) is paying 4.97% but you can't make it a "core" position. You have to put in an order to buy it, and another to sell it.
@@DavidLitman-ph9lu Thanks for the tip!
@@DavidLitman-ph9luFidelity works the same way. It takes days to have the money available.
Vanguard too, please!
Thanks for the video and shining some light on Fideiity's cash sweep accounts, Jennifer! All of my Fidelity accounts are set to sweep set to SPAXX. I have a small taxable account at Fidelity to hold some cash, like another tier of savings. I try to throw $100 every two weeks in there. It's filling very slowly because I am focusing on Treasuries. SPAXX's rate may not be the highest of the high but it's still way more than my what my bank and credit union offer.
Thanks for sharing Boris!
First time watching your video I have the Fidelity premium money market currently paying 5.16, love your video.. looking for an instrument close to 6 %
You are so good at explaining everything. thank you so much.
Please do Charles Schwab. I haven’t gotten into Money Market Funds yet just Tbills. Love your content!!!
Also very interested in an overview for Schwab as well , thank you!!!
I have Vanguard and glad I am finally getting 5%. It was crime of the century (one of many) that companies were getting free money for 10+ years buying up everything in sight.
Vanguard what?
Thank you so much for the daily videos as I watch them everytime you release a new one. You are so precise to explain everything and I love it!
yes info on Vanguard please
Vanguard Money Market at 5.06%. Not bad. Holding cash makes some sense .
I would really like to learn more about fidelity Municipal money-market funds specifically state level funds. I really appreciate this information!
Same. I'm in California and there's often higher thresholds here for tax exemption so I would appreciate learning more about municipal funds from your perspective.
Vote for Vanguard.
Thank you for the very useful information! I looked at my Fidelity account and discovered when I transferred funds to Fidelity and an agent opened a cash account for me the agent put most of the money in a sweep account on which I make zilch. Moved it all into SPAXX.
Glad it was helpful
@@DiamondNestEgg You have been super helpful for me. I now have a T-bill ladder and figured out how to do everything on Fidelity with your guidance.
These money market funds all hold about 30% in US government securities, so about 70% of the fund returns are taxable. Note that in California, Connecticut, and New York these funds do not hold enough government securities to be tax exempt. So in those states 100% of the fund returns are subject to state and local taxes.
What would be best for those living in California ?
I was thinking of choosing FDLXX
FDLXX hilds above 90% of the fund in US treasuries.
WOW! Thank you so much! I too was stuck on the bank sweep in my 401k from a decision a long time ago. I've been enjoying lots of your videos lately, thank you!
You're welcome!
Yes, please do a Schwab core money market fund.
Regarding timezones: I agree you should use EDT (Eastern Daylight Time) rather than EST, (Eastern Standard Time) since EST is 1 hour behind, but until November 5, 2023 most people on the East Coast (New York, for instance) are observing EDT. Yes, you should also use PDT (Pacific Daylight Time) until November as well. Most people just ignore when the wrong term is used since they just interpret it to mean whatever time is currently being observed. There are some instances when it can cause issues, however so better to be accurate. Alternatively, you could just use Eastern Time or Pacific Time and then the assumption would correspond to the currently observed time (daylight savings or not).
Yes to just simplifying to ET, PT, etc. 👍🏼
This was great! I really hope you do a similar video for Schwab!
I am interested in similar Schwab information.
Thank you as always! Interesting the detail about less STATE tax liability and the emphasis on IMMEDIATE access and your including SIPC reminder. I plan to use this account more to my advantage; had not fully appreciated this alternative to banks & credit unions.
Glad the video was helpful!
Excellent video! I just switched from FCash to SPAXX as my core position--thanks to you!
Thanks! Moved from Cash to Spaxx with your assistance.
me too
Do Schwab next!
I have FZDXX 4.94% in my traditional IRA and SPRXX 4.82% in a joint account with my wife.
Thanks for sharing
Long Explanation of Fidelity Cash Management. Folks, I've spent most of today trying to figure out how to set up Fidelity accounts to maximize interest earned from treasury money market accounts in a high tax state, while also utilizing all of the banking features that fidelity makes available (debit card, checks, online bill pay, ach transfers, direct deposit). I'm still in the process of funding my new accounts, so I have not yet implemented this strategy, but I think it will work.
First of all, there are two different Fidelity accounts that need to be opened: (1) a Fidelity cash management account, and (2) a Fidelity brokerage account.
Cash Management Account. You cannot designate an alternative funding account for Cash Management - the only funding option is a bank account which pays a 2.6% interest rate and the funds are FDIC insured. The cash management account really works just like a good bank account with a debit card, online bill pay, check writing, ach transfers, direct deposit, etd. I believe you could directly purchase Fidelity money market shares in the cash management account, but it is not made for investments. It's really just a bank account.
Brokerage Account. The brokerage account is made for investments, but they also have some cash management features like check writing. In a taxable brokerage account you can designate SPAXX or FZFXX (two very similar funds) as alternatives to the FDIC bank funding account. However, you cannot designate FDLXX (which is the treasury only money market account) as an alternative funding account. As I discuss in a minute, I suspect that they precluded FDLXX from being an alternative funding account because they are holding mostly actual treasuries in that account rather than swaps and they are worried about too many people making too many transactions in the account and causing them management difficulties. Swaps are generally shorter term and easier for them to convert to cash. But there are real advantages to those of us in a high tax state to using FDLXX over the settlement fund options.
FDLXX: The 7 day yield is currently 4.82%, which is actually higher than the settlement funds (about 4.75%), but most importantly the settlement funds are holding about 85% of their assets in swaps or agency bills which are not exempt from state taxes, while FDLXX is holding 79.71% in actual treasuries which are exempt from state taxes. Also, in states like California and New York, I believe you will get no tax state tax exemption if the fund has less than 50% treasuries, so if the holdings remain for the full year as they are currently, no interest earned on the settlement funds will be exempt from state taxes in a 50% state. While nearly 80% of the interest earned in FDLXX would be exempt from state taxes. So FDLXX is a lot better in any taxable state (higher yield currently and much higher state deductibility). But it's trickier to utilize because it cannot be made a default funding source.
The Cash Manager. Don't confuse the cash manager with a cash management account. The cash manager is a feature in a cash management account that can enable you to utilize FDLXX as your primary funding source, although it requires some setup and monitoring. It has three important features: (1) it will give you notice when your cash management funding account is below the amount you set, (2) it will give you notice when your cash management funding account is above the amount you set, and (3) it will allow you to use FDLXX in your brokerage account as a free overdraft source for your cash management account. So let's say you set the cash manager to notify you whenever you have more than $5 in your cash management account. When you get the notice (from direct deposits, check deposits from your cellphone, ACH transfers, whatever) that there is more than $5 in the cash management account, you'll go in and transfer all of the money from the cash management account to FDLXX. When you spend money, you have this automatic self overdraft protection enabled to charge FDLXX for whenever you spend . It will pull whatever you spend from FDLXX to prevent an overdraft. So you basically keep nothing in the cash management account, use the self overdraft protection to cover spending, and the only part that's not automatic is that you have to physically move incoming money to FDLXX. So it sounds pretty good to me - if it works as advertised. There may be a way to push money directly into FDLXX in your brokerage account, but it's not apparent. If not, you'll have to transfer manually when you get notice that incoming funds are in the cash management account.
So that's the scoop. If you're in a low tax state and want to use one of the available money market funds as the default funding source for your brokerage account, your transfers into the brokerage account would not have to be transferred manually. But transfers into your cash management account still would have to be manually transferred since they cannot be default funding sources.
If anyone has any better solutions, please chime in. I'm new to using Fidelity for money management, but it seems like a really good solution in relation to very low yielding and fully-state-taxable bank accounts. And Fidelity allows living trust accounts and other account types that are very difficult to set up at most of the higher-paying online banks.
Please also do similar for Schwab, thyou - really get so much from your videos
Great video! It gives me more information and options than my financial advisors gave me on these core accounts. I’ll have to talk to them about that 😮. Yes please, a video on municipal funds would be helpful. Thanks.
Noted
Thank you for the valuable information. Please include options with Vangard in future videos.
Schwab/TD Ameritrade please!
Vanguard please!!!!😃
Ma'am. Thank you very much. This is a great lesson for cash management.
yes --please do a video on schwab and VG😉
Thank you for this! Presentation was very clear and the speed of your delivery was perfect!
Definitely Charles Schwab please. Love your videos, Thank you.
Really clear and informative -- thank you! I've become interested in munis in general as well as muni MM mutual funds.
I have Fidelity FZDXX Premium Money Market and the rate has been holding at 4.94 for several weeks.
Thanks for sharing
Thanks! Never realized I had a choice and I just changed it all to SPAXX
Yes, Vanguard please, thanks
Would love to learn Vanguard money mkt fund, thanks for the super informative videos!
Yep, I transferred all of my TD Ameritrade accounts to Fidelity in January and have not regretted it. And, I have SPAXX in all of the accounts. I also have the BIL ETF in some of the accounts for additional near cash investment for monthly interest.
Thanks for sharing
Thank you very much.... I learned a lot with your videos. God bless you...
Jennifer, thank you for sharing your knowledge - especially for small investors like me!
First time on your channel and very impressed by your informative and no-nonsense summary of the Fidelity Money Market Fund options. If you haven’t already done Schwab and Vanguard, might as well break it down. Thanks.
Best Money Market Funds 2023 vs Cash | What Are Money Market Funds
th-cam.com/play/PLsv_4H5rP97F-KN9ubyZkNqwN8ViBJyGc.html
Schwab as well please.
Please do a similar video for Schwab and Vanguard money market funds. I appreciate your excellent videos.
Similar I do on Schwab would be great!!
I closed Schwab for fidelity because Schwab is greedy
I would also appreciate a video on Vanguard and Schwab.
Yes. Please do a video on TDAmerittade Schwab and Vanguard.
Noted
Definitely would love to hear more about the Money Market Municipal Funds!
I just opened a Fidelity account and have SPRX as my core position.
Hi Jennifer. Vanguard for me, and nice to be getting 5% with safe money/dry powder for the time being.
What is that??
Dry powder? Cash that is available to immediately invest.
Would appreciate a review of Schwab MMKT. Thanks
Yes, Schwab please.TY
There are other premium share classes of MM at Fidelity if you have over $100,000 - I use FZDXX (4.94%) in my IRA and FNSXX (5.10%) in my 401k. You may have to call to ask to trade into them.
I use FZDXX in my traditional IRA & my taxable brokerage account. You don’t need to keep 100k in it after you open it & only need 10k in your IRA.
The minimum investment for FNSXX is $9,999,999.99
@@gregharrison76 Correct - a 401k has to have at least $10M of total money market in the plan to add FNSXX as an option (I was a Fidelity employee and they have a lot more than that), that's not an individual investor minimum. It's now returning 5.31%
@@JustMike2 I tried to place an order for FNSXX but was denied so I instead placed an order for FZDXX. The funds are currently in SPRXX so I will gladly take the additional yield.
@@gregharrison76 I wish I qualified, 😂
Hi Jennifer, I was wondering if you could do a video on investing in taxable brokerage vs IRA brokerage account. The pros and cons. thank you!
Noted!
Fzdxx is the one I use at 4.94% currently. You need 100k though to buy into the fund but then can drop below that and still keep that rate. It’s not a core account but if you make cash withdrawal from the account that it’s in it will draw from that fund.
Thanks for the info!
I ❤ Fidelity
SPAXX monthly dividends it pays aren't exempt from state income tax.
A large part of SPAXX holdings are repos (repurchase agreements) rather than directly-held treasury securities. As I understand it, income from repos is not tax-exempt.
In contrast, funds like FDLXX (Fidelity Treasury Only Money Market Fund) and VUSXX (Vanguard Treasury Money Market Fund) hold T-bills directly and are entirely (or almost entirely) state tax-exempt.
Can you confirm?
Would suggest going through their Statement of Additional Information
I just discovered your channel & I found you and it Absolutely Excellent 💯 ❤️
Having spoken to my financial advisor, then I reconfirmed, the money market funds, FDRXX, SPAXX are not covered by FDIC. As such I'm sticking to Fcash and the FDIC insured (within ROTH)
According to the fund overview. Below is the risk statement, it essentially spells out that there could be a MM run and its not like cash.
You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
"The SIPC will cover up to $500,000 in securities, including a $250,000 limit for cash held in a brokerage account." This statement from the link, specifically says "cash"
To sum up, from what I can gather, SIPC covers the accounts, but the MM funds can go up and down in value, since they are securities. that loss is not covered.
5:46
@@DiamondNestEgg thanks for your response, I understand your presentation regarding SIPC now. The entire brokerage account is covered, however the value of an money market fund itself is not insured, if the value drops below one dollar, which is different from cash. This is clearly stated under the fund's individual page, which I have cut and pasted above in my original statement. To simplify, the money market fund is a purchase, much like a stock is a purchase and a stock loss is not insured against loss.
Thanks Jennifer. Schwab next please!
$91,909.77 invested. Nice!
With SPAXX, could you hypothetically leave trad IRA money in it instead of opening a cd? Just discovered your channel. It is excellent
I have brokered cds with Fidelity and the core sweep account is the low yield cash mentioned. However, there's no option to change it! As for my brokerage account, yes the cord account is spaxx.
I'm confused why you did not mention FIDELITY MMKT PREMIUM CLASS FZDXX. You have to invest a minimum of $100K at first, but the balance can fall below that amount and you will still earn the higher interest rate. I'm in FLorida, is this available in other states? Thanks! Love your site and professional delivery!!!
Glad you enjoyed it - the focus was primarily on the core positions in this case
It is available in New York.
Some of these don't show up in my accounts for Core. However I can put money into them if I select such.
Thank you for all you do for us. If you would show us how Schab does that would be nice.
Yes please for Vanguard. I LOVE ALL OF YOUR VIDEOS! HUGE FAN!
I just setup a Fidelity Bloom account with SPAXX as my core position.
Great video. One question: when interest rates begin to drop next year (hopefully) will the value of the treasuries go down like bonds?
Excellent video!! I was always confused by this and how to change it. By default, Fidelity had made my Core position, in FDIC-Insured Deposit Sweep. I changed to FDRXX.
Glad it was helpful
Thanks for explaining the options. I'm interested in understanding how a bond fund has a 30 day yield and the distributions are different.
Yes, please do a similar video on Schwab!
It’s on my list Anne!
your information is very helpful 👍🏿
There is another Fidelity MMkt, FRSXX, which invests almost exclusively in shorter term Treasury securities and is currently yielding 4.85%. I use this in addition to FDRXX, which has more investments in repurchase agreements, as a balance.
Thanks for sharing
Thank you so much! I joined Fidelity due to your videos! Please make similar videos for Schwab and Vanguard which I have too
Noted
Schwab please,thank you
Thank you again for your valuable information... best info on TH-cam!
I WOULD LIKE TO KNOW MORE ABOUT FIDELITY MONEY MARKET FUNDS
Do you have to have a minimum? It doesn’t allow me to chance my core position
Could you do a video on Dollar Cost Averaging method? What is better monthly, bi weekly or else? Set it for beginning of the month, mid month or end of month? Which day of the week is better to buy? Thank you
Noted
Would appreciate if we can get more info on Municipal Money Market Funds and when it may make sense to put money into that
Noted
You can trade options on top of your SPAXX account. As long as you don't get exercised into owning the stock you get to double dip.
Please cover FZDXX.
Thank you -This is what I have...Learning Learning
Schwab next please. Thank you!
thanks for all the great info. what are your thoughts on FZDXX?
Stay tuned
Since Fidelity's SPAXX is approximately 25% T-bills, 25% Agency securities, and 50% repos, does Fidelity separate out non-taxable with the taxable dividends year end? Seems like Fidelity does not, but would like to understand folks' / DiamondNestEgg's experiences if otherwise, especially in states like CA and NY.
Yes, you get a 1099-DIV.