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

[braumeister]

It does not have a 1% foreign transaction fee for overseas ATM withdrawals. I have used it many times and there are no fees. Foreign ATM fees are also reimbursed.

Thanks, that's great to know. Never realized the distinction. The language is:

For each foreign transaction, there is a foreign transaction fee (currently, 1% of the transaction for non-US dollar transactions), which may be included in the amount charged to your account. This charge may apply whether or not there is a currency conversion.

and I always assumed that a transaction was a transaction. Silly me.

 

[G-Man]

Looks like there is a promotion for $100 when you open a Fidelity cash management account.

https://www.fidelity.com/go/starter-pack

 

[Happyras]

We travel a lot. We just got back from Playa Del Carman where i used my debit Fido in an HSBC ATM. There was no option to withdraw without paying them a 5% currency fee to pull Peso's. Fido rebated part of this as a ATM fee. I took out 1000 pesos, worth about $52.63 they charged me $59.04, but Fido rebated me $4.38. I got stuck for $2.03 for the WD Which is about 4% exchange fee, charged by HSBC not Fido

 

[Happyras]

Looks like there is a promotion for $100 when you open a Fidelity cash management account.

https://www.fidelity.com/go/starter-pack

Yup, that how I ended up with 2 CMA's. One as a trust account and one is personal. It gets tricky, but I can receive funds into the personal and transfer to the trust immediately for use. Some banks won't link a trust to an non-trust account, go figure.

 

[audreyh1]

Thanks, that's great to know. Never realized the distinction. The language is:

and I always assumed that a transaction was a transaction. Silly me.

Yes, their language has always been confusingly incomplete. And even calling in to Fidelity sometimes people get the wrong answer although the couple of Fidelity people I talked to pointed out the distinction of no transaction fee for the case of ATM withdrawal.

I had read about the Fidelity ATM card in several boards including here and many people shared their 0% FTF experience at ATMs. That’s what ultimately had me set up a cash management account to segregate it from my investment accounts.

 

[braumeister]

We travel a lot. We just got back from Playa Del Carman where i used my debit Fido in an HSBC ATM. There was no option to withdraw without paying them a 5% currency fee to pull Peso's. Fido rebated part of this as a ATM fee. I took out 1000 pesos, worth about $52.63 they charged me $59.04, but Fido rebated me $4.38. I got stuck for $2.03 for the WD Which is about 4% exchange fee, charged by HSBC not Fido

Sounds like Fido may have reimbursed you at the official conversion rate instead of the inflated rate that HSBC charged you.

 

[Happyras]

Sounds like Fido may have reimbursed you at the official conversion rate instead of the inflated rate that HSBC charged you.

Yup, note to self, do not us HSBC ATM. Other ATM's will usually give you the option to withdraw in either local or USD, this one did not and did not say how much until it printed the receipt. I was actually surprised how much Fido did rebate, it could have been worse.....

 

[G-Man]

Ok. Opened a Fidelity Cash Managment account today. Funded it with $30K and placed a trade for $30K of SPRXX.

Thanks everyone.

 

[G-Man]

The last 7-day yield of SPRXX is 4.15%. On $30K cash, what would the monthly interest/dividend be?

https://institutional.fidelity.com/app/fund/sasid/details/454.html

Yield as of 01/13/2023
1 Day 7 Day 30 Day
4.14% 4.15% 4.13%

Avg. Annual Returns As of 12/31/2022
1 Yr. 3 Yr. 5 Yr. 10 Yr.
+1.49% +0.62% +1.12% +0.69%

 

[G-Man]

The last 7-day yield of SPRXX is 4.15%. On $30K cash, what would the monthly interest/dividend be?

https://institutional.fidelity.com/app/fund/sasid/details/454.html

Yield as of 01/13/2023
1 Day 7 Day 30 Day
4.14% 4.15% 4.13%

Avg. Annual Returns As of 12/31/2022
1 Yr. 3 Yr. 5 Yr. 10 Yr.
+1.49% +0.62% +1.12% +0.69%

Should be $1245 per year/$103 per month. Sorry. Brain freeze this morning.

 

[COcheesehead]

$1298.68 with compounding for a year assuming the interest rate stays the same. Ave $105.75 a month.
The rate is likely to go up in the near term if the Fed keeps raising rates.

 

[G-Man]

$1298.68 with compounding for a year assuming the interest rate stays the same. Ave $105.75 a month.
The rate is likely to go up in the near term if the Fed keeps raising rates.

Can you share the calculation used?

 

[COcheesehead]

Can you share the calculation used?

https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator

 

[G-Man]

$1298.68 with compounding for a year assuming the interest rate stays the same. Ave $105.75 a month.
The rate is likely to go up in the near term if the Fed keeps raising rates.

I'm getting $1,268.96 using the calculator. What am I doing wrong? Using monthly compounding.

 

[COcheesehead]

I'm getting $1,268.96 using the calculator. What am I doing wrong?

LOL, you’re right. I typed it wrong. It’s 1268.96.

 

[PlayinwithFIRE]

If you want to set your core accounts on Fidelity , it seems like your options are:


SPAXX
FDRXX
FDIC

Atleast thats how mine are offered for Fire and Forget core accounts.

 

[audreyh1]

If you want to set your core accounts on Fidelity , it seems like your options are:


SPAXX
FDRXX
FDIC

Atleast thats how mine are offered for Fire and Forget core accounts.

Yeah pretty much.

We only have SPAXX available in our brokerage accounts. There may be a municipal MM option for core.

FDRXX or FDIC banks is available in our IRA and HSA accounts.

But you can add additional MM funds to your account. And they will be drawn from automatically when the core account is depleted, so is pretty easy to manage.

 

[COcheesehead]

Yes, you can make a money market almost act like a core if you don’t mind doing manual buys. Fido will pull funds from a MM when your settlement account hits $0. I haven’t looked recently, but there was almost a .5% difference between the core yield and a MM yield so it’s worth the hassle to us.

 

[gayl]

Delete

 

[PointBreeze]

Fidelity offers a 2% on anything Visa. I use it to pay everything that doesn’t charge a fee from our HOA, to our water bill, etc. We made almost $1300 last year just by paying our bills.

+1 on the Fidelity credit card

I keep enough in my Fidelity CMA (cash management account) to pay monthly bills. The rest of my cash is in MM or CD ladder in my Fidelity brokerage account. The great thing about the CMA is if you don’t have enough to cover the bills you set up in the Bill Pay function, you can have it automatically pull from your brokerage MM.

 

[PointBreeze]

I'm trying to consolidate everything to Fidelity where most of my retirement investments are located. I will look into the Fidelity Cash management account and the FZDXX money market account.

FZDXX has a $100,000 minimum investment, I believe…

 

[meleana]

Living off cash for a number of years until SS at age 70 so always keep about that much in checking for living expenses because I don’t want to constantly think about moving money in.

 

[NoEZmoney]

T-Bills and iBonds

Me and DW are taking the money sitting in low-interest savings accounts and maxing out iBonds each year and ladder-stepping T-bills each month in equal amounts. We each have a TreasuryDirect account and it's simple. While it's not a huge return, it's a lot better than what banks are offering (for now) and the interest is free at state and local level so that helps a bit. Our last T-Bill rate is 4.737% iBonds get adjusted every 6 months but currently at 6.89%.

These will go towards our cash bucket in increments as they mature.

 

[imnontrad]

I am just finishing going through this. I had money stashed "just in case" I needed to quickly transfer to my checking accounts. Then recently I realized I was getting 0.01% annual interest on that account - and Vanguard has some brokered CDs starting at a 1 month maturity on up and a 4.3% return. So I have just finished moving the money and will have a CD ladder so I will still have the money if needed but will get a better return. After a year, I think I will really take a look at how much is in CDs and how much I really need that safe/liquidandgo from there.

 

[hotwired]

Stuff

I'm confused on yield vs return.

Here is the yield and return on FZDXX.

Yield as of 01/13/2023
1 Day 7 Day 30 Day
4.26% 4.27% 4.25%


Avg. Annual Returns As of 12/31/2022
1 Yr. 3 Yr. 5 Yr. 10 Yr.
+1.58% +0.67% +1.20% +0.75%

If I leave $30k in FZDXX what would be my yield and what would be my return?

I can never figure out quite how to deal with this quote unquote method on the forms. Do I put my stuff before or after? But anyway as to your question, keep in mind the total return numbers that you're showing are sort of a blended rate. For example the past five years rates of basically been zero. So think of it as a mutual fund or something that has gotten 0% for 4 years then all of a sudden for the past 1 year has gotten between 3 and 4%. It's 5-year return is going to look pretty dismal. Keep in mind these are very short-term instruments, so there's not much advantage to comparing these things over 1,3,5 and 10 years. They're Ultra safe short-term money parking places, so whatever the yield advertised is what counts. I still never did quite get 100% savvy on the whole SEC yield thing and how it might differ from your actual performance, I'll let the smarter folks on this forum elucidate!