Fidelity To Offer SPAXX As A Core Position In Cash Management Accounts Beginning Next Week.

[RetiredAndLovingIt]

This was announced on their Reddit page and also on statements a couple of months ago. I don't keep a lot of uninvested cash in there but good to know as it will almost double my interest. People are also requesting that they add the option of FDLXX for those of us in high taxed states.
Here is the link to the announcement and subsequent discussion.

https://www.reddit.com/r/fidelityinvestments/comments/1dghhdr/announcing_a_new_core_position_option_for_your

 

[Qs Laptop]

I thought this was the default cash account for Fidelity?

 

[RetiredHappy]

I thought this was the default cash account for Fidelity?

This is and has been for a few years. Not understanding why it is new. It mentioned CMA, so maybe that is new for MySmartCash.

 

[RetiredAndLovingIt]

I thought this was the default cash account for Fidelity?

No, it has only been for IRA's while the CMA account was always FDIC insured banks at a lower rate. I think a lot of people then bought Spaxx to get the higher rate but now it will automatic.

 

[RetiredAndLovingIt]

This is and has been for a few years. Not understanding why it is new. It mentioned CMA, so maybe that is new for MySmartCash.

Not in the CMA ( Cash Management Account) which only pays interest in the 2% range.

 

[RetiredHappy]

No, it has only been for IRA's while the CMA account was always FDIC insured banks at a lower rate. I think a lot of people then bought Spaxx to get the higher rate but now it will automatic.

I have my taxable brokerage account in Fidelity and have SPAXX for years.

 

[xlf11]

Lots of people requested to have FDLXX as core for both CMA and brokerage for State tax savings.

 

[audreyh1]

The default core in the Fidelity Cash Management Account has been an FDIC insured core cash position spread over several banks as needed to meet FDIC limits. I guess that’s why they called it a cash management account.

When I first opened a CMA the MM Funds weren’t paying anything, and the cash account was slightly better. As interest rates climbed I eventually switched to holding mostly Fidelity Government Cash Reserves in my CMA, buying on occasion as needed. SPAXX yields a teeny bit lower but it will be a welcome simplification.

 

[audreyh1]

I have my taxable brokerage account in Fidelity and have SPAXX for years.

They are specifically talking about the Fidelity Cash Management Account which until now has had cash as the only core option. Regular taxable brokerage accounts do have SPAXX as a core option.

 

[Surewhitey]

Ditto on FCM, it is yielding ~2.72%.

I've recently been buying SPRXX with spare cash and getting 5.02% currently. When I spend from the core account, they auto sell the SPRXX to settle up with some helpful folks' advice here.

 

[Gryphon]

This change went live this afternoon, I just switched my CMA over to SPAXX. It takes a day to go into effect; I don't know if tomorrow's holiday will add another day to that but I would imagine so.

 

[RetiredAndLovingIt]

This change went live this afternoon, I just switched my CMA over to SPAXX. It takes a day to go into effect; I don't know if tomorrow's holiday will add another day to that but I would imagine so.

Thanks for the update, it wasn't letting me change my position earlier but it's working now. I imagine a lot of the core banks are not going to be happy about this change, they stand to lose a lot of deposits.

 

[GrayHare]

So the switch is manual? Is a SPAXX buy order needed, or is there simply a box to check?

 

[Gryphon]

I believe changing your core selection is something you have to do yourself, and if you don't do anything your CMA will continue to use FDIC sweep for uninvested cash. That's what Fidelity was saying back in March when they first announced this.

I don't think a purchase order is necessary. Unless I'm mistaken, once you change your core selection to SPAXX it will move your FDIC money into SPAXX for you.

 

[RetiredHappy]

It didn't allow me to switch but I was able to execute a buy SPAXX order.

 

[RetiredAndLovingIt]

I tapped on my account positions then cash (FDIC INSURED DEPOSITS- change core position- then check the option for Spaxx and it was accepted but will take a day to go through.

 

[audreyh1]

I have nothing in the core cash at the moment so I can’t yet change the position as it is not shown. I transferred a small amount of cash in so once we get past the holiday I’ll be able to make the core change.

 

[timmar]

I changed mine yesterday also and got the note that it would take a day to implement.

 

[teej1985]

I have nothing in the core cash at the moment so I can’t yet change the position as it is not shown. I transferred a small amount of cash in so once we get past the holiday I’ll be able to make the core change.

Log in to Fidelity will let you change the core position for any account. Replace X12345678 in the URL with your actual Fidelity account number. You do not have to have any funds in the core position.

 

[Surewhitey]

Done!

 

[audreyh1]

Log in to Fidelity will let you change the core position for any account. Replace X12345678 in the URL with your actual Fidelity account number. You do not have to have any funds in the core position.

Got it thanks!

Otherwise I would have just waited until tomorrow.

Limited to the iPhone at the moment.

 

[omni550]

Thanks....

And done!

 

[wrigley]

I have my taxable brokerage account in Fidelity and have SPAXX for years.

So have I.

Mike

 

[braumeister]

I just did it too. Thanks to @RetiredAndLovingIt for the mention.
I've had a Fidelity CMA for years and really like it, but I've always had a large part of it in SPAXX anyway. This will just let me keep all of it there.
Two differences: More interest and no FDIC coverage. But for the amounts most of us keep there, the lack of FDIC shouldn't cause any loss of sleep.

 

[Another Reader]

I must be old school. My "cash management" is done at the bank. Money that goes to Fidelity or any brokerage is for investment. What am I missing?