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Fidelity Money Market Premium class FZDXX, any surprises?
Old 12-08-2022, 07:05 PM   #1
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Fidelity Money Market Premium class FZDXX, any surprises?

I'll most likely be rolling over my 401k before the end of the year to a Fidelity IRA and then once that is stablished I'll be rolling it over to my Vanguard IRA. My thought was to park the money in FZDXX. I have seen a lot of posts about that fund and I know the minimum is $100k which is no problem. Is there anything else that I need to know or be aware of? For example, money in the Fidelity Zero funds IIRC can't be moved out of Fidelity, that would be a no starter.

I doubt there is anything screwy like that but I thought I'd ask just in case.
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Old 12-08-2022, 07:51 PM   #2
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No catches that I am aware of. It is a little riskier than a straight treasury type money market fund, but has never "broke the buck".
One also doesn't need to maintain 100k, just start with that minimum.
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Old 12-08-2022, 08:09 PM   #3
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I use it without issue. It is a fund and not a sweep account so you have to buy into it. Cash is not automatically deposited.
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Old 12-08-2022, 08:25 PM   #4
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Thanks. Not expecting to use it as a sweep account, just somewhere to park money for a short time. I figured it was straight forwards but the catch with the Zero funds was a bit of a surprise when I read about that!
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Old 12-08-2022, 08:40 PM   #5
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Originally Posted by Graybeard View Post
I'll most likely be rolling over my 401k before the end of the year to a Fidelity IRA and then once that is stablished I'll be rolling it over to my Vanguard IRA. My thought was to park the money in FZDXX. I have seen a lot of posts about that fund and I know the minimum is $100k which is no problem. Is there anything else that I need to know or be aware of? For example, money in the Fidelity Zero funds IIRC can't be moved out of Fidelity, that would be a no starter.

I doubt there is anything screwy like that but I thought I'd ask just in case.
For your IRA the initial FZDXX minimum is only $10K.
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Old 12-09-2022, 08:04 AM   #6
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I use it without issue. It is a fund and not a sweep account so you have to buy into it. Cash is not automatically deposited.
While FZDXX is not a core/sweep holding, can it be used to fund other investments in the account or do you have to explicitly sell FZDXX first in order to have cash to buy the other?
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Old 12-09-2022, 08:11 AM   #7
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While FZDXX is not a core/sweep holding, can it be used to fund other investments in the account or do you have to explicitly sell FZDXX first in order to have cash to buy the other?
If your sweep account is empty, they will force sell from FZDXX for any buys, except bonds. You need the cash for a bond buy.
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Old 12-09-2022, 08:22 AM   #8
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While FZDXX is not a core/sweep holding, can it be used to fund other investments in the account or do you have to explicitly sell FZDXX first in order to have cash to buy the other?
A nice feature of Fidelity brokerage accounts is that they automatically pull from other MM funds when your core is depleted. Have used this feature many times.

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If your sweep account is empty, they will force sell from FZDXX for any buys, except bonds. You need the cash for a bond buy.
Didn’t know about needing cash in core for a bond buy. It’s not true for buying treasuries at auction - at least I think I’ve been able to.
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Old 12-09-2022, 08:51 AM   #9
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A nice feature of Fidelity brokerage accounts is that they automatically pull from other MM funds when your core is depleted. Have used this feature many times.


Didnít know about needing cash in core for a bond buy. Itís not true for buying treasuries at auction - at least I think Iíve been able to.
I have all my cash in FZDXX and tried to buy a bond. I got an error message from Fido saying 100% of the buy cost needs to be in cash.
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Old 12-09-2022, 08:54 AM   #10
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I just tried it again. Here is the message.
Attached Images
File Type: jpg B7D4A49B-B31B-4532-A61C-B79BF707D745.jpg (203.5 KB, 30 views)
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Old 12-09-2022, 08:58 AM   #11
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I have all my cash in FZDXX and tried to buy a bond. I got an error message from Fido saying 100% of the buy cost needs to be in cash.
Were you buying on the secondary market? It seems to allow me to place orders for Treasuries at auction showing the cash from core+FZDXX as available for the order.
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Old 12-09-2022, 09:29 AM   #12
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If your sweep account is empty, they will force sell from FZDXX for any buys, except bonds. You need the cash for a bond buy.
The above also true of Fidelity's other MM funds. Correct?
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Old 12-09-2022, 09:33 AM   #13
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Were you buying on the secondary market? It seems to allow me to place orders for Treasuries at auction showing the cash from core+FZDXX as available for the order.
No, the notice I just posted above was for a new issue agency. Are you buying in a taxable account with margin features?
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Old 12-09-2022, 09:35 AM   #14
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No, the notice I just posted above was for a new issue agency. Are you buying in a taxable account with margin features?
Interesting.

No, I don’t have a margin account.
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Old 12-09-2022, 09:36 AM   #15
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The above also true of Fidelity's other MM funds. Correct?
I believe so, but I only have FZDXX.
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Old 12-09-2022, 09:36 AM   #16
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The above also true of Fidelity's other MM funds. Correct?
Yes, any Fidelity MM fund. I move funds into Fidelity Govt Cash Reserves FDRXX in my cash management account all the time, and they pull as needed from that to cover bills paid.
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Old 12-09-2022, 09:47 AM   #17
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I've bought secondary Treasuries through Fidelity on a number of occasions with no sweep balance and the purchase price was automatically pulled from FZDXX or FZCXX. I don't have a margin account and the money being invested was 100% settled funds that were already in the FZ funds.
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Old 12-09-2022, 09:50 AM   #18
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I've bought secondary Treasuries through Fidelity on a number of occasions with no sweep balance and the purchase price was automatically pulled from FZDXX or FZCXX. I don't have a margin account and the money being invested was 100% settled funds that were already in the FZ funds.
Maybe the key is your buy is for treasuries. I donít buy treasuries so I have only seen the 100% cash needed message for other types of bonds.
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Old 12-09-2022, 09:54 AM   #19
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For the above error message - An added thought. Check your positions page to see if some $ you think is available is still listed as "pending activity" at the bottom of the positions list and to verify that the FZDXX balance shown covers the order.
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Old 12-09-2022, 09:56 AM   #20
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For the above error message - An added thought. Check your positions page to see if some $ you think is available is still listed as "pending activity" at the bottom of the positions list and to verify that the FZDXX balance shown covers the order.
No, that is not the case. The cash has been “aged” - it’s all settled - has been for months.
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