What to do with extra $30K in checking account?

[jollystomper]

Either high-yield savings or money market account, take your pick .

 

[G-Man]

To me, the same idea the past few years. I closed my Schwab accounts, consolidated my brick and mortar banks to Chase and a Credit Union for emergency, but do almost everything now with Fido. Their Visa card pays 2% cash back no cost, and their debit card works everywhere and they rebate all the ATM fees charged within a day. Just to know, you need 100K to buy into the FZDXX, but you only need to keep at least $1 in it to keep it open for cash flow.

I found the remote deposit limits elsewhere were ridiculous, Fido lets us deposit check remote with access to funds better than all other banks. Schwab is also good, but it so nice to have a checking account with such high yield. I keeps a lot more in other accounts at Fido separately. Probably still keep too much in that Cash Management account, but its pretty convenient. I even invest in t-bills in that account along with the Prime MM.

For us, who travel a lot, these work very well with only a 1% foreign fee, or else I use our Costco Visa with no foreign fee and cash back for travel costs at 3%.

$100K minimum required to purchase FZDXX. Just confirmed with Fidelity.

Well, I think I need to look at other Fidelity MM funds or other options mentioned in this thread.

 

[COcheesehead]

$100K minimum required to purchase FZDXX. Just confirmed with Fidelity.

Well, I think I need to look at other Fidelity MM funds or other options mentioned in this thread.

The 100k is a one time entry point. You can drop below it and they will do nothing. Not part of this discussion, but IRAs only have a 10k min.

 

[67blazer]

Interest Earning Accounts

There are many savings/checking accounts that can get you decent interest on your money. This link has a list of them.

https://www.doctorofcredit.com/high-interest-savings-to-get/

 

[audreyh1]

$100K minimum required to purchase FZDXX. Just confirmed with Fidelity.

Well, I think I need to look at other Fidelity MM funds or other options mentioned in this thread.

Synchrony Bank high yield savings account is paying 3.75%.

Other Fidelity MM funds are paying >3.9%. Fidelity Govt Cash Reserves is at 3.94% and moving up.

Lots of options.

 

[SteveTheDog]

$100K minimum required to purchase FZDXX. Just confirmed with Fidelity.

Well, I think I need to look at other Fidelity MM funds or other options mentioned in this thread.

I have mine in Vanguard VMFXX. It looks pretty close to Fidelity at 4.26 7 day and only 3k minimum. It’s the default for the settlement fund on my account so it can set there until I trade with it.

I’m pretty new to the fixed income stuff so I’m not sure if there’s an issue with it. It does look to have a lower expense than most at .11. Someone please chime in if I’m wrong about it.

 

[ncbill]

With Fidelity Cash Management accounts, we can hold essentially as cash in FZDXX with the 4.27% 7 day yield and it will pull right out of this fund after the core account. I just make certain every deposit made is re-invested into this fund.

Doing the same with nearly all my spare cash...add the bank info, pull it into my Fidelity taxable account, and buy FZDXX down to the last penny.

 

[G-Man]

Synchrony Bank high yield savings account is paying 3.75%.

Other Fidelity MM funds are paying >3.9%. Fidelity Govt Cash Reserves is at 3.94% and moving up.

Lots of options.

I want something with quick liquidity.

 

[G-Man]

Doing the same with nearly all my spare cash...add the bank info, pull it into my Fidelity taxable account, and buy FZDXX down to the last penny.

Can you explain the steps in more detail. I have a Fidelity brokerage account but not a Fidelity cash management account.

 

[COcheesehead]

Can you explain the steps in more detail. I have a Fidelity brokerage account but not a Fidelity cash management account.

You can hold FZDXX in any account.

 

[TheWizard]

I want something with quick liquidity.

Why?
Are you planning a getaway?

 

[ncbill]

Can you explain the steps in more detail. I have a Fidelity brokerage account but not a Fidelity cash management account.

It's my taxable brokerage account since I don't have a CMA.

Easy enough to add your bank's information and then just pull cash from there.

Usually Fidelity credits those transfers to my brokerage account the same day.

 

[G-Man]

You can hold FZDXX in any account.

Got it. Just the minimum is $100K initially.

Would SPRXX be an option?

 

[COcheesehead]

Got it. Just the minimum is $100K initially.

Would SPRXX be an option?

Sure.

 

[G-Man]

It's my taxable brokerage account since I don't have a CMA.

Easy enough to add your bank's information and then just pull cash from there.

Usually Fidelity credits those transfers to my brokerage account the same day.

Got it. So how does the $100k minimum comes into play?

 

[G-Man]

Sure.

No minimum and yield is 4.15%

 

[Graybeard]

Excess cash goes to Vanguard Settlement Fund, my checking account pays 4 bp so I keep cash there until bills are paid, I arranged them to be paid by the 8th calendar day each month.

 

[audreyh1]

Synchrony Bank high yield savings account is paying 3.75%.

Other Fidelity MM funds are paying >3.9%. Fidelity Govt Cash Reserves is at 3.94% and moving up.

Lots of options.

I want something with quick liquidity.

These are all completely liquid. One day transfer time between banks/brokerage is my experience.

I have a scheduled amount sent from savings to checking each month. This is set up ahead of time for a specific monthly date, but I can go in and change the amount ahead of time if needed.

One time transfers are always available. Usually shows up in the receiving institution the next business day.

SPRXX is fine too. SPRXX and FZDXX are prime MM funds and as such take a teeny bit more risk with your cash. Other core Fidelity funds such as SPAXX and FDRXX are holding US Govt paper. High yield savings accounts are FDIC insured and treasury MM funds hold only US Treasuries - these are the safest.

 

[G-Man]

I think SPRXX is the answer for me since I don't have $100k for the initial investment for FZDXX.

My Fidelity brokerage account is tied to my checking account already. So, the process would be to transfer $30k from my checking account into the Fido brokerage account core position (FCASH) and then purchase $30k of SPRXX.

I assume I would need to paid ordinary income tax on the gains? 1099-INT form at the end of the year.

I will pursue creating a Fido Cash Management account at a later date.

 

[audreyh1]

I think SPRXX is the answer for me since I don't have $100k for the initial investment for FZDXX.

My Fidelity brokerage account is tied to my checking account already. So, the process would be to transfer $30k from my checking account into the Fido brokerage account core position (FCASH) and then purchase $30k of SPRXX.

I assume I would need to paid ordinary income tax on the gains? 1099-INT form at the end of the year.

I will pursue creating a Fido Cash Management account at a later date.

The monthly dividends paid are ordinary income and taxed as such. It will appear on your brokerage 1099-DIV.

 

[G-Man]

These are all completely liquid. One day transfer time between banks/brokerage is my experience.

I have a scheduled amount sent from savings to checking each month. This is set up ahead of time for a specific monthly date, but I can go in and change the amount ahead of time if needed.

One time transfers are always available. Usually shows up in the receiving institution the next business day.

SPRXX is fine too. SPRXX and FZDXX are prime MM funds and as such take a teeny bit more risk with your cash. Other core Fidelity funds such as SPAXX and FDRXX are holding US Govt paper. High yield savings accounts are FDIC insured and treasury MM funds hold only US Treasuries - these are the safest.

Are there any high yielding savings accounts or Treasury MM funds yielding 4% or more?

 

[audreyh1]

Are there any high yielding savings accounts or Treasury MM funds yielding 4% or more?

Right now MM mutual funds are winning the race, and of those the prime MM funds are yielding the most (speaking about Fidelity). The core funds are getting close to 4%.

But there have been many times where FDIC insured high yield savings accounts were yielding the most and periods where MM funds yielded essentially 0. These things go in cycles so you have to pay attention - at least twice a year, ha ha.

 

[mebden]

Are there any high yielding savings accounts or Treasury MM funds yielding 4% or more?

G-man I said earlier on this thread look at Bask Bank online savings account ive been with them for 2 years now and they have been the highest ive seen 4.07% as of today

 

[G-Man]

Right now MM mutual funds are winning the race, and of those the prime MM funds are yielding the most (speaking from Fidelity). The core funds are getting close to 4%.

But there have been many times where FDIC insured high yield savings accounts were yielding the most and periods where MM funds yielded essentially 0. These things go in cycles so you have to pay attention - at least twice a year, ha ha.

Pay attention - twice a year ?

What drives the MM rates? How much the Feds raise the interest rate or some other indicator?

https://fred.stlouisfed.org/series/MMTY

I think I found the answer...

https://www.investopedia.com/ask/an...se instruments are,fund pays to its investors.

 

[COcheesehead]

Pay attention - twice a year ?

What drives the MM rates? How much the Feds raise the interest rate or some other indicator?

https://fred.stlouisfed.org/series/MMTY

I think I found the answer...

https://www.investopedia.com/ask/an...se instruments are,fund pays to its investors.

Short term rates. They update daily, but are meaningful about every 7 trading days. In MMs 6 months is an eternity.