Questions: Moving from bricks & mortar bank to Fidelity Cash Management

[PointBreeze]

We are planning to open a joint Fidelity brokerage account with just a money market fund in it (for now), and seriously considering opening a joint Cash Management account and ditching our joint checking and savings accounts at PNC. For the time being, we would both keep a PNC checking and PNC savings account, in order to have "local" money in case of some sort of Internet issue.

I have a few questions for those of you who have moved to a Fido Cash Management account:

1. Is there any delay in moving money from a money market fund in your Fido brokerage account to the Cash Management account, or does it happen instantaneously?
2. Is there a limit on the number of times/month one can move $$ from the brokerage account to the Cash Management account?
3. How long does an EFT take between your bricks and mortar bank and your Fido Cash Management account?
4. What is the limit on the size of check that can be deposited into the Cash Management account via the mobile app?
5. What important question(s) am I not asking?

Thank you in advance for your help.

 

[COcheesehead]

Do you need to make cash deposits? That is the only thing the account cannot handle.

I can't comment on the timing. I haven't paid attention to those things and they have never been an issue.

I have made 6 figure deposits via the mobile app without issue.

 

[Bamaman]

You really might want to read on Fidelity's website.

When I move funds from the FIDO money market to my home checking account, it's overnight. I remember that when I wanted to move ETF funds at Fidelity, it took about 4 days.

I keep extra funds in Ally Bank, and it takes about 2 days to get the $ ACH'd into my Wells Fargo checking account. Ally bank pays so much more interest (relatively.)

I still feel better keeping $ where I can go in and see a banker face to face.

 

[TheRunningMan]

We have all FIDO with CMA and a local credit union free savings account for local deposits and services. Answers as I have them:

1) No delay from MM to CMA
2) I have never hit a limit over the past 6+ years
3) Transfers from B&M bank to CMA take 1-2 business days
4) I have never hit a deposit limit though I'm sure there is one; chat with them to get an answer
5) Just plan to find a free local solution for cash deposits

Good luck!

 

[LarryMelman]

I've been EFT/ACH transferring money in and out of my Fidelity account for decades. (And used their checks prior to that.) Never a problem.

In an attempt to automate my finances as I enter retirement, I set up an automatic withdrawal to sweep out any cash balance (to an Ally savings account) once a month. I expected exactly that, and no more. So when a wad of mutual fund distributions hit my account last week (which I don't automatically reinvest), I could invest part of it and any remainder would be swept out by the automatic withdrawal. Well it turns out that's not how Fidelity views it. Any cash that drops into the account is locked away as "pending". You can't touch it.

I post this in case anyone was considering that as part of their cash management. I have yet to find a brokerage that can implement a basic automated sweep.

 

[gwraigty]

We haven't had a local bank in years and have had no issues with not having one. We have the Fidelity CMA and joint brokerage account, and the Charles Schwab One Account, which is a joint brokerage combined with a High-Yield (yeah, right ) Checking account. Both offer unlimited rebates of ATM fees, so there's no need to keep "local" cash. Free checks, too.

As far as Internet issues, I'm not sure what you mean. With your ISP or on Fidelity's end? I've been banking online ever since such a thing was first offered, starting when I was with TD Ameritrade in the 90's. I can't recall not being able to pay a bill using online bill pay, check balances and transactions, order checks, etc., etc., as long as my ISP is up, which is nearly 100% of the time. As long as a local bank's ATM is functioning, I can get cash if I need it, which I seldom do.

 

[braumeister]

99% of my banking has been online only for decades. These days it's mostly with my FIDO CMA, but I use a few others as well. No reason not to.

However, I keep a tiny checking account at the local Chase bank for a few reasons. They are only a few blocks away and very convenient when I need to make a cash deposit or a sizable cash withdrawal. Simple to transfer funds to the account online and then pick up the greenbacks.

Also, it's great to have a very local place to get a document notarized. It's a very low volume branch, so I never have to wait -- usually the only customer when I go in.

Another reason is that I hate Paypal but occasionally I have no choice but to use it, such as for eBay transactions. So that is linked to my little Chase account and I don't have to worry about problems affecting any of my "real" accounts.

Still another is to have a place to transact business such as selling a car privately. Just tell the buyer to meet me at the bank with the cash or bank check and deposit it right there.

There's no cost to maintaining the Chase account so no reason not to have it.

 

[Katsmeow]

I am curious. What is the advantage of the Fidelity Cash Management Account as opposed to, say, having an account at the local Chase or other bank?

My 401(k) has long been with Chase while our other money (IRA, non-retirement money) has been at Vanguard. But, my 401(k) was just terminated and I needed to roll it over so I rolled it to a Fidelity IRA. There is a Fidelity office not terribly far away (not that I really care). I have some non-IRA money that I can send to Vanguard or I could theoretically send to Fidelity. So this thread is somewhat timely. In thinking about how much I will keep at Fidelity v. Vanguard, what is the advantage of the cash management account?

I've mostly kept cash at the local Chase (for many of the reasons braumeister lists). They are less than 5 minutes from my house and have good service. I have a safety deposit box there and they are convenient to notarize or if I need to deposit cash or get cash.

I understand the draw of the high interest savings accounts like Ally bank. But, what benefit does you get from the CMA? Is it simply dealing with only one institution or is there some other reason?

 

[braumeister]

what benefit does you get from the CMA? Is it simply dealing with only one institution or is there some other reason?

Here's a good overview.
https://www.fidelity.com/cash-management/overview

 

[gwraigty]

I am curious. What is the advantage of the Fidelity Cash Management Account as opposed to, say, having an account at the local Chase or other bank?

<snip>

I understand the draw of the high interest savings accounts like Ally bank. But, what benefit does you get from the CMA? Is it simply dealing with only one institution or is there some other reason?

https://www.fidelity.com/viewpoints/personal-finance/do-you-really-need-a-bank

One plus of the CMA account (or Schwab's checking account) is that you earn interest, unlike a local bank's free checking account. Granted, it's just a smidgen at current rates, but it's something. Transfers between a brokerage checking account and the brokerage account are faster than using an outside bank, though that's not a deal-breaker.

I don't need a safety deposit box. I don't need to deposit cash. I've gotten free notary services and Medallion stamps without needing a local bank account. I can't recall ever needing a cashier's check for anything.

 

[COcheesehead]

I am curious. What is the advantage of the Fidelity Cash Management Account as opposed to, say, having an account at the local Chase or other bank?

My 401(k) has long been with Chase while our other money (IRA, non-retirement money) has been at Vanguard. But, my 401(k) was just terminated and I needed to roll it over so I rolled it to a Fidelity IRA. There is a Fidelity office not terribly far away (not that I really care). I have some non-IRA money that I can send to Vanguard or I could theoretically send to Fidelity. So this thread is somewhat timely. In thinking about how much I will keep at Fidelity v. Vanguard, what is the advantage of the cash management account?

I've mostly kept cash at the local Chase (for many of the reasons braumeister lists). They are less than 5 minutes from my house and have good service. I have a safety deposit box there and they are convenient to notarize or if I need to deposit cash or get cash.

I understand the draw of the high interest savings accounts like Ally bank. But, what benefit does you get from the CMA? Is it simply dealing with only one institution or is there some other reason?

For me its the convenience of having everything in one place. My credit card, debit card, checking, Billpay. Ease and speed of moving cash as I need it. Free checks, all my data in one dashboard. Cash back from my credit card goes right into my account. Its not a big deal, just easier.

I used to have a Chase account and it was just one more thing to track, deal with statements, deal with all the marketing emailed or sent to me.
All the services that a bank provides I can get through Fidelity, except one which is they don't take cash deposits, but for the occasional Craigslist transaction, I just spend the cash rather than deposit it.

Chase also lost me as a customer when they wouldn't let me do a debit transaction without my ID. I had just walked across the street to the bank with only my debit card. The ATM did not work and the teller said no deal to taking out cash without an ID though if the ATM worked, I would not need one. I thought you don't need me Chase and I don't need you. Adios. That was probably 5 years ago.

 

[PatrickA5]

We are planning to open a joint Fidelity brokerage account with just a money market fund in it (for now), and seriously considering opening a joint Cash Management account and ditching our joint checking and savings accounts at PNC. For the time being, we would both keep a PNC checking and PNC savings account, in order to have "local" money in case of some sort of Internet issue.

I have a few questions for those of you who have moved to a Fido Cash Management account:

1. Is there any delay in moving money from a money market fund in your Fido brokerage account to the Cash Management account, or does it happen instantaneously?
2. Is there a limit on the number of times/month one can move $$ from the brokerage account to the Cash Management account?
3. How long does an EFT take between your bricks and mortar bank and your Fido Cash Management account?
4. What is the limit on the size of check that can be deposited into the Cash Management account via the mobile app?
5. What important question(s) am I not asking?

Thank you in advance for your help.

A CMA account IS a brokerage account at Fidelity. There is little advantage to having both a CMA and a separate brokerage account, but you might check with Fidelity for what those advantages are. They might be important to you.

While we have pretty much moved everything to Fidelity, we still maintain a small free checking account at our local bank - mainly for cash reasons and free safety deposit box. Also, occasional notary and medallion signatures.

 

[gwraigty]

A CMA account IS a brokerage account at Fidelity. There is little advantage to having both a CMA and a separate brokerage account, but you might check with Fidelity for what those advantages are. They might be important to you.

While technically it is true that you can buy securities in the CMA, I was advised by a Fidelity rep that it's much better to use your regular brokerage account for this and use the CMA as a checking account. I wasn't given detailed reasons for this, but I prefer to separate our bill paying funds from our investment funds anyway, so having both accounts works well for us.

 

[PatrickA5]

While technically it is true that you can buy securities in the CMA, I was advised by a Fidelity rep that it's much better to use your regular brokerage account for this and use the CMA as a checking account. I wasn't given detailed reasons for this, but I prefer to separate our bill paying funds from our investment funds anyway, so having both accounts works well for us.

For those interested, check the Bogleheads forum. There is a huge thread on this very subject. My phone calls with Fidelity and talking to my home town rep in person, indicated to me that a CMA account was all I needed (or wanted). But, there are a few reasons why some people might want both - such as your reason.

 

[PointBreeze]

The main reason for us to move to a Fido CMA is the minimum balance shenanigans we have to go through to avoid fees at PNC.

 

[PointBreeze]

Thanks, everyone, for your input. I did read through the Fido overview webpage, and these were the questions I had after reading.

 

[PointBreeze]

As a former IT professional, I’m very aware of how a state-funded cyber terrorist attack could make Internet banking dicey for a period of time - the new face of warfare, perhaps?

So while I prefer to do everything online, we’ll keep a few months’ worth of cash in a local bank.

 

[HarveyS]

I'd suggest you make an appointment and go and sit with an account rep at Fido to get the answers to your questions.
Regarding an "internet issue" or "state-funded cyber attack" - don't you think the bricks and mortar location would be affected as well? You might want to consider keeping a few dollars under the mattress.

 

[Spock]

As a former IT professional, I’m very aware of how a state-funded cyber terrorist attack could make Internet banking dicey for a period of time - the new face of warfare, perhaps?

So while I prefer to do everything online, we’ll keep a few months’ worth of cash in a local bank.

A local bank is OK for a third layer of access
but your first layer for emergency access is cash in your hand.


If your local bank is having "computer problems", your money is just as inaccessible as if you had it all stashed in online banking. The bank is not going to revert to hard copy balance printouts while their networks are down.

 

[MRG]

A local bank is OK for a third layer of access
but your first layer for emergency access is cash in your hand.


If your local bank is having "computer problems", your money is just as inaccessible as if you had it all stashed in online banking. The bank is not going to revert to hard copy balance printouts while their networks are down.

+1000

No cyber attacks but look at post 911. Seems like banks and brokerages were mandated to be closed until 9/17. You are correct, banks don't act like It's a Wonderful Life even with a statement.[emoji111]

 

[Senator]

We are planning to open a joint Fidelity brokerage account with just a money market fund in it (for now), and seriously considering opening a joint Cash Management account and ditching our joint checking and savings accounts at PNC. For the time being, we would both keep a PNC checking and PNC savings account, in order to have "local" money in case of some sort of Internet issue.

I have a few questions for those of you who have moved to a Fido Cash Management account:

1. Is there any delay in moving money from a money market fund in your Fido brokerage account to the Cash Management account, or does it happen instantaneously?
2. Is there a limit on the number of times/month one can move $$ from the brokerage account to the Cash Management account?
3. How long does an EFT take between your bricks and mortar bank and your Fido Cash Management account?
4. What is the limit on the size of check that can be deposited into the Cash Management account via the mobile app?
5. What important question(s) am I not asking?

Thank you in advance for your help.

When I do an EFT transfer from Fidelity to US Bank, or vice versa, it's overnight. Assuming I make the 3 PM EST cutoff.

If you want it faster, you can wire. My wires from FIDo are free. Sometimes banks charge to accept or initiate a wire.

Or use a 3-way hop if you have that already set up. i.e. Fido to Papal, to other bank.

As a former IT professional, I’m very aware of how a state-funded cyber terrorist attack could make Internet banking dicey for a period of time - the new face of warfare, perhaps?

So while I prefer to do everything online, we’ll keep a few months’ worth of cash in a local bank.

And somehow that would be exempt if the banking system was compromised? Newsflash. That is not really there either. It's at the Fed or already loaned out.

 

[gwraigty]

As a former IT professional, I’m very aware of how a state-funded cyber terrorist attack could make Internet banking dicey for a period of time - the new face of warfare, perhaps?

So while I prefer to do everything online, we’ll keep a few months’ worth of cash in a local bank.

This sounds like a good solution for you.

I'd suggest you make an appointment and go and sit with an account rep at Fido to get the answers to your questions.
Regarding an "internet issue" or "state-funded cyber attack" - don't you think the bricks and mortar location would be affected as well? You might want to consider keeping a few dollars under the mattress.

I agree that a local bank can also be affected. Sort of like someone who thinks that because they don't put their info on the internet, that it's not out there. That's why I prefer not to have all of our accounts at one institution, hoping that they all wouldn't be "out of order" at the same time.

 

[COcheesehead]

While technically it is true that you can buy securities in the CMA, I was advised by a Fidelity rep that it's much better to use your regular brokerage account for this and use the CMA as a checking account. I wasn't given detailed reasons for this, but I prefer to separate our bill paying funds from our investment funds anyway, so having both accounts works well for us.

The only reasons I can think of why you would want to separate your CMA from your brokerage are:

Margin and float. If the timing of your trades is out of whack you could be drawing on non existent funds to pay your bills resulting in a margin debit.

Security. Do you really want a debit card tied to your brokerage account?

 

[jetpack]

I've had the fido CMA and brokerage account for about a year. I ditched my local bank.

I keep $0 in my Cash account, and use my brokerage account as overdraft.
(brokerage account cash is kept in higher interest money market fund)

So, there is basically zero wait time for me to get money out of the brokerage acct.
Getting money in seems pretty fast too, with checks available the next day.

I can go to my local ATM and withdraw cash. or write checks no problem.

 

[gwraigty]

No cyber attacks but look at post 911. Seems like banks and brokerages were mandated to be closed until 9/17. You are correct, banks don't act like It's a Wonderful Life even with a statement.[emoji111]

I didn't know this, probably because I was able to shop for groceries that week with no problem. My credit card worked. None of my scheduled online bill payments failed.

You made me look. I found this excruciatingly detailed 54 page report on the event:

Payment System Disruptions and the Federal Reserve Following September 11, 2001

I can't copy and paste from the document, but the reference to this starts with the last paragraph on page 7. The report goes on to talk about many other threats to the system, some of which have already happened and weren't even a blip on the average consumer's radar.