Fidelity Cash Management Account??

[marc515]

I'm currently with Vanguard (Stocks/Mutual Funds), and other online banks (CD's), and am trying to find one place that can basically do it all.

Can any of you guys who have a Fidelity Cash Management account please tell me some of the Pro's & Con's of this account?

Thank you,
m

 

[COcheesehead]

I have it.
Pro’s
All in one place.
Free ATM transactions world wide
Free checks
Billpay
2% back Visa
Direct deposit
Easy to move money between accounts

Con’s
No cash deposits at ATM’s or at an office.


I haven’t had a regular bank account or checking account in years and do not miss it.

 

[Marc]

I have it.
Pro’s
All in one place.
Free ATM transactions world wide
Free checks
Billpay
2% back Visa
Direct deposit
Easy to move money between accounts

Con’s
No cash deposits at ATM’s or at an office.


I haven’t had a regular bank account or checking account in years and do not miss it.

All of the above plus:

Great rate at overseas ATM
Easy movement of funds back and forth to money market account (SPRXX) earring over 1.8%. When I opened CMA in 2006 Fidelity touted great interest rate for the account (close to 1% IIRC); however, that went away when rates dropped and has never really come back; that is why I leave money in SPRXX and just move to CMA when needed.

Marc

 

[audreyh1]

I'm currently with Vanguard (Stocks/Mutual Funds), and other online banks (CD's), and am trying to find one place that can basically do it all.

Can any of you guys who have a Fidelity Cash Management account please tell me some of the Pro's & Con's of this account?

Thank you,
m

It’s excellent. I’ve been very happy with it overall including the debit card with reimbursed ATM fees and no foreign transaction fees at overseas ATMs.

My only complaint would be the low interest rate - currently 0.31%. But heck my Bank of America checking pays no interest at all.

I’ve used a lot of the features. Works very well.

 

[Cobra9777]

We use the Fidelity CMA for all our normal banking functions. We have a separate taxable brokerage account that holds securities and distributions are automatically transferred to the CMA right after payment. We also have direct deposit of our pension payments. No ATM fees, good FX rates, 2% no-fee cash-back CC, checking, free checks, bill-pay, real-time alerts, fast and easy transfers, cellphone check deposit, no fees of any kind. The only thing I can't do is deposit cash. We maintain a seldom-used Wells Fargo checking account for this, plus things like free notary service, etc. We also use it to transfer money to/from the kids since they both use WF.

...My only complaint would be the low interest rate - currently 0.31%. But heck my Bank of America checking pays no interest at all...

Several months ago, I moved our CMA core position from FCASH to FZFXX (Fidelity Treasury Money Market Fund), which currently pays 1.7%. There are MMFs at Fidelity that pay ~2% but they are not available for your core position, so you'd have to transfer money more frequently. For the amount of cash we keep in the CMA, the difference is inconsequential. So we keep it simple and FZFXX suits us just fine.

 

[audreyh1]

You can change the core on your Fidelity Cash management account? How did I miss this?!?

My core position is not FCASH, but rather the FDIC-insured Deposit Sweep.

My Fidelity Cash Management account does not allow me to change the core position online. Did you call in to do this?

Note: There Are No Other Core Options for This Account
There are no other core options available for your account. Additional options might be available by calling a Fidelity representative at 800-544-6666.

FZFXX yield is currently 1.59%, FWIW.

 

[Lazyfabs]

You can change the core on your Fidelity Cash management account? How did I miss this?!?

My understanding is you cant b/c in the cash mgmt account core is fdic insured so it follows this long list of depositary accounts it goes into. The money market option is for the ‘fidelity account’ aka brokerage account.

https://www.fidelity.com/cash-management/faqs-cash-management-account

the 5th faq under is ‘$ fdic’ insured it list the program banks

another great feature, if one is to ever need it or be faced to need it, is the cash manager feature for overdraft protection. Bit more robust than any similar option at a brick and mortar bank we have and had.

Scroll down link provided for explanation.

 

[audreyh1]

My understanding is you cant b/c in the cash mgmt account core is fdic insured so it follows this long list of depositary accounts it goes into. The money market option is for the ‘fidelity account’ aka brokerage account.

https://www.fidelity.com/cash-management/faqs-cash-management-account

the 5th faq under is ‘$ fdic’ insured it list the program banks

another great feature, if one is to ever need it or be faced to need it, is the cash manager feature for overdraft protection. Bit more robust than any similar option at a brick and mortar bank we have and had.

I only move funds into my cash management account as needed to cover bills or ATM withdrawals while traveling.

BTW - I don’t want the overdraft protection or any such link to my brokerage accounts. My biggest concern is somehow having my ATM card compromised while traveling and having funds withdrawn. In that case I don’t want even more funds drawn because the overdraft protection kicks in. I have overdraft protection turned off on all my accounts that have checking capability.

 

[FIREd_2015]

My non-retirement core is in SPAXX with a 7 day yield of 1.67%. Once I clicked on SPAXX it allows me to change my core position. Here is a screen shot:

 

[audreyh1]

My non-retirement core is in SPAXX with a 7 day yield of 1.67%. Once I clicked on SPAXX it allows me to change my core position. Here is a screen shot:

This is in your cash management account?

I do not believe that anyone opening a Fidelity Cash Management account today, or even during the last few years, has the option for anything but the FDIC-insured cash as the core position. It may have been that many years ago MM funds could be selected as a core account. This was not an option when I opened mine around 4-5 years ago.

 

[COcheesehead]

I only keep a few hundred bucks in the core account. Everything else goes to FZDXX which pays ~2% now.

 

[Cobra9777]

You can change the core on your Fidelity Cash management account? How did I miss this?!?

My core position is not FCASH, but rather the FDIC-insured Deposit Sweep.

My Fidelity Cash Management account does not allow me to change the core position online. Did you call in to do this?


FZFXX yield is currently 1.59%, FWIW.

It's my understanding that the CMA is just a regular brokerage account with all the cash-management features enabled. Anything you can do with a regular brokerage account, you can do with the CMA, including change the core account, hold securities, etc. However, IIRC, I could not change the CMA core account online, so I had to call in. The rep told me all the core options and FZFXX was the best yield at the time.

Also, 1.59% is as-of 8/31/18. The current 7-day yield as-of 9/28/18 is 1.67%.

 

[Cobra9777]

I only keep a few hundred bucks in the core account. Everything else goes to FZDXX which pays ~2% now.

I've thought about doing this. Right now, I keep excess cash at Ally, but FZDXX has a higher yield.

Question: How does timing work?... Let's say you have a $5K credit card payment scheduled in bill-pay. Do you sell/transfer from FZDXX into the core account to cover each scheduled payment? How long before those funds are "available for withdrawal"? Or is there some other automated mechanism by which these payments are "covered"? Just curious how this works in practice.

 

[gwraigty]

In addition to the excellent list of pros above, mobile deposit, for the rare occasion when you might actually have to deposit a check. It's been years since I've done this, but they did accept check deposits to the brokerage accounts in-person at local offices.

Charles Schwab also offers the Schwab One account with a linked interest-bearing checking account with many of the same features. A notable difference is their credit card is an American Express with 1.5% cash back.

One thing that doesn't matter to me, but might to others, is that transfers between Fidelity checking and brokerage are reflected in the balances the next business day. At Schwab, the balances are updated immediately.

The interest rate on the checking side was the same at both, .25%, according to my August statements.

I'm happy with both firms.

 

[audreyh1]

It's my understanding that the CMA is just a regular brokerage account with all the cash-management features enabled. Anything you can do with a regular brokerage account, you can do with the CMA, including change the core account, hold securities, etc. However, IIRC, I could not change the CMA core account online, so I had to call in. The rep told me all the core options and FZFXX was the best yield at the time.

Also, 1.59% is as-of 8/31/18. The current 7-day yield as-of 9/28/18 is 1.67%.

Well I will call in about getting that changed.

Sorry, I didn’t notice that the yield I quoted was not current.

 

[KB]

Vanguard has a similar account called the Vanguard Advantage account. If you don't want to change companies you might compare the features.

 

[COcheesehead]

I've thought about doing this. Right now, I keep excess cash at Ally, but FZDXX has a higher yield.

Question: How does timing work?... Let's say you have a $5K credit card payment scheduled in bill-pay. Do you sell/transfer from FZDXX into the core account to cover each scheduled payment? How long before those funds are "available for withdrawal"? Or is there some other automated mechanism by which these payments are "covered"? Just curious how this works in practice.

It’s mechanical. If you don’t sell FZDXX to cover payments or transfers, it will go into margin. I just wait for an expense to hit and then I sell. The funds are available the next day. I only do this once or twice a month at most so its not a big deal for the extra earnings.

 

[Al18]

I have my core account set to SPAXX for most of my accounts. SPAXX is a Government Money Market Account, but it's not FDIC insured. Fidelity has allowed you to pick 1 of 5 core accounts a year or two ago. They were all were paying less than 0.5% interest prior to 2018, but many are now paying more in 2018.

 

[FIREd_2015]

This is in your cash management account?

I do not believe that anyone opening a Fidelity Cash Management account today, or even during the last few years, has the option for anything but the FDIC-insured cash as the core position. It may have been that many years ago MM funds could be selected as a core account. This was not an option when I opened mine around 4-5 years ago.

Yes, this is my cash management account meaning non-retirement individual brokerage account. I vaguely remember having to call in to Fidelity years ago to be able to switch out of FCash. Now, it looks like Fidelity has "enabled" this option in my account.

 

[audreyh1]

Yes, this is my cash management account meaning non-retirement individual brokerage account. I vaguely remember having to call in to Fidelity years ago to be able to switch out of FCash. Now, it looks like Fidelity has "enabled" this option in my account.

The Fidelity cash management account is different from a Fidelity brokerage account. I have a non-retirement brokerage account as well, and I can change the core fund for that online no problem.

 

[marc515]

I just noticed the Fidelity Visa card has a 1% foreign transaction fee; bummer.
m

 

[jazz4cash]

The Fidelity cash management account is different from a Fidelity brokerage account. I have a non-retirement brokerage account as well, and I can change the core fund for that online no problem.

That’s what I was thinking too but I see there is also something called The Fidelity Account under the Cash Management tab. It’s confusing to me as I consider opening a CMA after great experience with the Fido Visa.

 

[FIREd_2015]

The Fidelity cash management account is different from a Fidelity brokerage account. I have a non-retirement brokerage account as well, and I can change the core fund for that online no problem.

I logged into my Fidelity account and it's listed as a brokerage account. I didn't realize there was a difference. I guess all these years I've been using my brokerage account also as my cash management account. I looked at Fidelity's FAQs on CMAs - not clear to me what the advantage is to break out a separate account when it looks like one can do the same thing in the brokerage account. Am I missing something?

 

[COcheesehead]

I logged into my Fidelity account and it's listed as a brokerage account. I didn't realize there was a difference. I guess all these years I've been using my brokerage account also as my cash management account. I looked at Fidelity's FAQs on CMAs - not clear to me what the advantage is to break out a separate account when it looks like one can do the same thing in the brokerage account. Am I missing something?

It’s not a separate account. You just add more features to your brokerage account when you add the cash management.

 

[audreyh1]

I logged into my Fidelity account and it's listed as a brokerage account. I didn't realize there was a difference. I guess all these years I've been using my brokerage account also as my cash management account. I looked at Fidelity's FAQs on CMAs - not clear to me what the advantage is to break out a separate account when it looks like one can do the same thing in the brokerage account. Am I missing something?

The brokerage account also offers check writing, bill paying, debit card, etc., so you don’t really need a separate cash management account.