Fidelity as a one stop shop

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spammagnet
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Re: Fidelity as a one stop shop

Post by spammagnet »

manlymatt83 wrote: Tue Mar 07, 2023 9:13 amFor those buying the higher yielding fund in their CMA, and then selling it down to like $20k, are you then able to re-buy back up to $30k when cash comes in, or do any buys need to bring it been over $100k?
As long as you have $1 in FZDXX, subsequent purchases can be any amount.

I purchased $10K of FZDXX in an IRA and transferred $100 in-kind to my CMA. There, I invested everything into FZDXX. That was << $10K. Routine cash flow results in automatic sale of FZDXX as needed.

I have a monthly IRA transfer deposited into the CMA of less than $10K, with a scheduled FZDXX buy a couple days later, for somewhat less. Due to other cash flow happening in the interim, the liquid amount other than FZDXX may be less than the purchase amount. Fidelity actually sells FZDXX to fund the scheduled purchase of the same MMF. If the available amount is greater than the purchase, I have cash left over. It gets spent first as cash needs arise, after which Fidelity sells FZDXX as needed.
manlymatt83
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Re: Fidelity as a one stop shop

Post by manlymatt83 »

spammagnet wrote: Wed Mar 08, 2023 9:10 am
manlymatt83 wrote: Tue Mar 07, 2023 9:13 amFor those buying the higher yielding fund in their CMA, and then selling it down to like $20k, are you then able to re-buy back up to $30k when cash comes in, or do any buys need to bring it been over $100k?
As long as you have $1 in FZDXX, subsequent purchases can be any amount.

I purchased $10K of FZDXX in an IRA and transferred $100 in-kind to my CMA. There, I invested everything into FZDXX. That was << $10K. Routine cash flow results in automatic sale of FZDXX as needed.

I have a monthly IRA transfer deposited into the CMA of less than $10K, with a scheduled FZDXX buy a couple days later, for somewhat less. Due to other cash flow happening in the interim, the liquid amount other than FZDXX may be less than the purchase amount. Fidelity actually sells FZDXX to fund the scheduled purchase of the same MMF. If the available amount is greater than the purchase, I have cash left over. It gets spent first as cash needs arise, after which Fidelity sells FZDXX as needed.
If you transferred $100 in kind to your CMA, wouldn't that cause a distribution penalty?
Lyrrad
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Re: Fidelity as a one stop shop

Post by Lyrrad »

manlymatt83 wrote: Wed Mar 08, 2023 9:34 am If you transferred $100 in kind to your CMA, wouldn't that cause a distribution penalty?
You could try transferring $0.01, which rounds to $0. I keep small amounts of minimum purchase Fidelity MMF in a separate brokerage account in order to replenish my main account if I sell off all of the fund. Note that it takes a business day or so for the system to recognize the fund in the new account and for you to be able to purchase additional shares below the minimum purchase.
manlymatt83
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Re: Fidelity as a one stop shop

Post by manlymatt83 »

Lyrrad wrote: Wed Mar 08, 2023 10:12 am
manlymatt83 wrote: Wed Mar 08, 2023 9:34 am If you transferred $100 in kind to your CMA, wouldn't that cause a distribution penalty?
You could try transferring $0.01, which rounds to $0. I keep small amounts of minimum purchase Fidelity MMF in a separate brokerage account in order to replenish my main account if I sell off all of the fund. Note that it takes a business day or so for the system to recognize the fund in the new account and for you to be able to purchase additional shares below the minimum purchase.
Got it. Sounds like there's no way around the initial $100k purchase. I have that in stock but don't really want to sell any - I wonder if I could do an overnight purchase with margin.
spammagnet
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Re: Fidelity as a one stop shop

Post by spammagnet »

manlymatt83 wrote: Wed Mar 08, 2023 9:34 amIf you transferred $100 in kind to your CMA, wouldn't that cause a distribution penalty?
I'm over 59.5 so it's a normal taxable withdrawal which I'm making, anyway. Even if you're under 59.5, the penalty is 10% of the amount. Withdraw $10 in kind and consider the $1 penalty as a small banking fee.

The points I intended to make earlier:

1. If you already have any amount in FZDXX (and presumably other minimum-purchase MMFs) there's no minimum purchase and no minimum balance.

2. The minimum opening purchase in retirement accounts is much smaller than in taxable accounts.

3. You can transfer any amount in-kind, which establishes a starting balance in the receiving account.
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

spammagnet wrote: Wed Mar 08, 2023 9:10 am
manlymatt83 wrote: Tue Mar 07, 2023 9:13 amFor those buying the higher yielding fund in their CMA, and then selling it down to like $20k, are you then able to re-buy back up to $30k when cash comes in, or do any buys need to bring it been over $100k?
As long as you have $1 in FZDXX, subsequent purchases can be any amount.

I purchased $10K of FZDXX in an IRA and transferred $100 in-kind to my CMA. There, I invested everything into FZDXX. That was << $10K. Routine cash flow results in automatic sale of FZDXX as needed.

I have a monthly IRA transfer deposited into the CMA of less than $10K, with a scheduled FZDXX buy a couple days later, for somewhat less. Due to other cash flow happening in the interim, the liquid amount other than FZDXX may be less than the purchase amount. Fidelity actually sells FZDXX to fund the scheduled purchase of the same MMF. If the available amount is greater than the purchase, I have cash left over. It gets spent first as cash needs arise, after which Fidelity sells FZDXX as needed.
Oh wow -- is this possible? What would be the process and the headwinds to this?

I figured I won't naturally have that liquidity for about a year, but I'd love to hack my way to it today. And could definitely leverage an IRA with over $10k to achieve it.
Lyrrad
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Re: Fidelity as a one stop shop

Post by Lyrrad »

manlymatt83 wrote: Wed Mar 08, 2023 10:15 am Got it. Sounds like there's no way around the initial $100k purchase. I have that in stock but don't really want to sell any - I wonder if I could do an overnight purchase with margin.
Yes. There appears to be some interest cost to it. See the previous post and subsequent posts in this thread:
viewtopic.php?p=6906499#p6906499

You'd need to decide if it's worth it to you for the slightly higher rate. There's some delay after purchase before it can be transferred to another account, but you can probably sell the excess after a business day, so it may make sense to buy the minimum on a Monday-Thursday, and sell some on the next day.

I've elected to not enable margin on my Fidelity accounts. I think there's some edge cases where if you could end up using and paying margin interest if you have some ACH debit and pending Fidelity MMF purchase transactions for more than the available cash balance in the account. (Or maybe it's just Cash Manager transactions as discussed here? viewtopic.php?p=5036602#p5036602)

There's a lower minimum in an IRA, $10K, so that could also be an option, if they let you transfer out $0.49 or so in kind, which rounds to $0.
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

So I don't think I want to mess around with margin, but that would certainly be a minor investment in interest to achieve it.

If I did a $10k purchase in an IRA, would I then do a small distribution into my CMA? What penalties/fees/accounting would that cause? And I presume I could carry over the MMF for the distribution without accidentally selling it?

I get the concepts, just hazy on the actual execution.
spammagnet
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Re: Fidelity as a one stop shop

Post by spammagnet »

OhioAndy wrote: Wed Mar 08, 2023 10:55 am So I don't think I want to mess around with margin, but that would certainly be a minor investment in interest to achieve it.

If I did a $10k purchase in an IRA, would I then do a small distribution into my CMA? What penalties/fees/accounting would that cause? And I presume I could carry over the MMF for the distribution without accidentally selling it?

I get the concepts, just hazy on the actual execution.
You have to do an in-kind transfer. That requires talking to a support rep. You can't accomplish that yourself using online transfers told.

Don't let that be a barrier. It's a short conversation.

Transfer a minimal amount, like $10. Don't withhold taxes, just deal with taxes and early withdrawal penalty (if any) when you file. It will be a very small amount.
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

That sounds pretty easy then, no?

Step 1: Sell index funds in IRA and buy $10k of FZDXX in an IRA, let it settle.
Step 2: Call Fidelity and do an in-kind conversion of a nominal amount of FZDXX from IRA to CMA.
Step 3: Sell the $10k of FZDXX in my IRA and reinvest in my index funds.
Step 4: Sell all the SPRXX in my CMA and buy FZDXX instead
Step 5: In April next year deal with a few dollars of income tax on the early distribution.

Is this it?

I have a ROTH and my wife has an old Traditional IRA -- is there a benefit of using one vs the other? for the in-kind distribution?

Thanks for breaking this down so patiently for me.
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fetch5482
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Re: Fidelity as a one stop shop

Post by fetch5482 »

spammagnet wrote: Wed Mar 08, 2023 9:10 am
manlymatt83 wrote: Tue Mar 07, 2023 9:13 am I purchased $10K of FZDXX in an IRA and transferred $100 in-kind to my CMA. There, I invested everything into FZDXX. That was << $10K. Routine cash flow results in automatic sale of FZDXX as needed.
What am I missing here - I thought the minimum to buy FZDXX initially was 100K, not 10K. How are you able to purchase $10K of FZDXX in your IRA?
(AGE minus 23%) Bonds | 5% REITs | Balance 80% US (75/25 TSM/SCV) + 20% International (80/20 Developed/Emerging)
chinchin
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Re: Fidelity as a one stop shop

Post by chinchin »

fetch5482 wrote: Wed Mar 08, 2023 11:55 am

What am I missing here - I thought the minimum to buy FZDXX initially was 100K, not 10K. How are you able to purchase $10K of FZDXX in your IRA?
There is a lower minimum for buying in an IRA.
not financial advice
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drumboy256
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Re: Fidelity as a one stop shop

Post by drumboy256 »

chinchin wrote: Wed Mar 08, 2023 12:04 pm
fetch5482 wrote: Wed Mar 08, 2023 11:55 am

What am I missing here - I thought the minimum to buy FZDXX initially was 100K, not 10K. How are you able to purchase $10K of FZDXX in your IRA?
There is a lower minimum for buying in an IRA.
So is the "loophole" here if you buy $10k of FZDXX in an IRA of some kind, you can then buy it across other accounts as well?
Promise is one thing. Fulfilling that promise is quite another. - Sir Alex Ferguson | 20% IVV / 40% IBIT / 20% IXUS / 20% VGLT + chill
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

drumboy256 wrote: Wed Mar 08, 2023 12:28 pm
chinchin wrote: Wed Mar 08, 2023 12:04 pm
fetch5482 wrote: Wed Mar 08, 2023 11:55 am

What am I missing here - I thought the minimum to buy FZDXX initially was 100K, not 10K. How are you able to purchase $10K of FZDXX in your IRA?
There is a lower minimum for buying in an IRA.
So is the "loophole" here if you buy $10k of FZDXX in an IRA of some kind, you can then buy it across other accounts as well?
My understanding: If you have any amount of FZDXX in an account, you can buy as much as you want. The initial investment requirements are a hurdle to overcome.

So if this loophole is real, then it would facilitate an easy, no-tax consequence liquidation of a lower-bar amount of funds to buy the MMF. Then a small amount could be transferred to a place that there is normally a higher bar where money is tougher to liquidate. And then you basically get around the minimum purchase requirement hurdles.
spammagnet
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Re: Fidelity as a one stop shop

Post by spammagnet »

drumboy256 wrote: Wed Mar 08, 2023 12:28 pm
chinchin wrote: Wed Mar 08, 2023 12:04 pm
fetch5482 wrote: Wed Mar 08, 2023 11:55 am

What am I missing here - I thought the minimum to buy FZDXX initially was 100K, not 10K. How are you able to purchase $10K of FZDXX in your IRA?
There is a lower minimum for buying in an IRA.
So is the "loophole" here if you buy $10k of FZDXX in an IRA of some kind, you can then buy it across other accounts as well?
You can transfer a very small amount IN-KIND from the IRA to any other account, establishing ownership in the receiving account. There is no minimum for additional purchases, as long as the balance doesn't drop to $0.
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anon_investor
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Re: Fidelity as a one stop shop

Post by anon_investor »

For folks with states/local income tax(es), after factoring in taxes, FDLXX currently may actually yield a little more than FZDXX. FDLXX is a retail treasury only money market fund so it is not subject to liqudity gates, so in theory it is a little safter than FZDXX.
spammagnet
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Re: Fidelity as a one stop shop

Post by spammagnet »

OhioAndy wrote: Wed Mar 08, 2023 11:24 am... Is this it?
Pretty much, yes.

Never let the FZDXX holdings drop to $0 or you'll have to start over. You'll have to make occasional purchases to replete it because Fidelity won't treat it as a core fund. Ignore the tidal flow of paychecks and routine monthly expenses. Most of your normal cash flow will be through the regular core account. Fidelity will sell FZDXX only if the available balance in cash and your core fund is inadequate to meet occasional larger withdrawals.
I have a ROTH and my wife has an old Traditional IRA -- is there a benefit of using one vs the other? for the in-kind distribution?
For the small amounts involved, I don't think it really matters. Someone else may have more insight.
Thanks for breaking this down so patiently for me.
I'm able to do that only because someone else did it for me.
spammagnet
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Re: Fidelity as a one stop shop

Post by spammagnet »

OhioAndy wrote: Wed Mar 08, 2023 11:24 amStep 4: Sell all the SPRXX in my CMA and buy FZDXX instead
You don't have to "sell" SPRXX. Fidelity does that automatically as needed. Buying FZDXX creates the need, as do other routine cash flow events.
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

OK -- Purchase was made inside a Trad IRA of FZDXX. Happy to update folks on the process/success if there's interest.
Lyrrad
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Re: Fidelity as a one stop shop

Post by Lyrrad »

anon_investor wrote: Wed Mar 08, 2023 12:53 pm For folks with states/local income tax(es), after factoring in taxes, FDLXX currently may actually yield a little more than FZDXX. FDLXX is a retail treasury only money market fund so it is not subject to liqudity gates, so in theory it is a little safter than FZDXX.
Thanks for the pointer. I’ll switch now. Even with the 0.42% ER, it seems to be better when interest rates are higher at my marginal state tax rate.

Too bad I haven’t found a feasible workaround to get FSIXX, a lower cost Treasury Only fund at Fidelity. ($1 million minimum). You can get it at Merrill Edge with a $1000 minimum, but they reportedly won’t transfer out in kind.

I wonder if a transferring a security to another Fidelity user would work to bypass mutual fund minimums. This could be useful if someone you know wants to buy FZDXX and doesn’t have the minimum. https://www.fidelity.com/accounts/pdf/transfer.pdf
Johnny Thinwallet
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Re: Fidelity as a one stop shop

Post by Johnny Thinwallet »

Lyrrad wrote: Wed Mar 08, 2023 2:47 pm
anon_investor wrote: Wed Mar 08, 2023 12:53 pm For folks with states/local income tax(es), after factoring in taxes, FDLXX currently may actually yield a little more than FZDXX. FDLXX is a retail treasury only money market fund so it is not subject to liqudity gates, so in theory it is a little safter than FZDXX.
Thanks for the pointer. I’ll switch now. Even with the 0.42% ER, it seems to be better when interest rates are higher at my marginal state tax rate.

Too bad I haven’t found a feasible workaround to get FSIXX, a lower cost Treasury Only fund at Fidelity. ($1 million minimum). You can get it at Merrill Edge with a $1000 minimum, but they reportedly won’t transfer out in kind.

I wonder if a transferring a security to another Fidelity user would work to bypass mutual fund minimums. This could be useful if someone you know wants to buy FZDXX and doesn’t have the minimum. https://www.fidelity.com/accounts/pdf/transfer.pdf
I've been watching FDLXX as well to save a bit on state taxes. It looks like the 1-day yield might be up to 4.32% as of Fidelity's website today. And if I'm reading the February monthly holdings report correctly, the 3 lowest treasury bill rates within the fund (totaling 15% of the fund) are falling off last week and this week. Presumably those will be reinvested into bills paying currently higher rates.

Right now we have some of our liquid cash in SPAXX. I might just flip it over from SPAXX to FDLXX tomorrow.
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

UPDATE:
Fidelity declined to do a transfer from the IRA to the CMA. They said an in-kind transfer in this case is no different than a purchase so the $100k minimum applies. (They transferred us around to several people and put us on hold for about an hour.)
vtMaps
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Re: Fidelity as a one stop shop

Post by vtMaps »

OhioAndy wrote: Thu Mar 09, 2023 8:42 am UPDATE:
Fidelity declined to do a transfer from the IRA to the CMA. They said an in-kind transfer in this case is no different than a purchase so the $100k minimum applies. (They transferred us around to several people and put us on hold for about an hour.)
I think they monitor this forum and were expecting you :shock: --vtMaps
"Truly, whoever can make you believe absurdities can make you commit atrocities" --Voltaire, as translated by Norman Lewis Torrey
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

The payback on 0.12% additional APY is not lucrative enough to mess with establishing margin for me to do so. I’ll probably table the idea until I have more liquid cash to just buy it outright for $100k.

Glad I got to be a Guinea pig and contribute to the greater Boglehead knowledge. Sad it didn’t work.
MrJedi
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Re: Fidelity as a one stop shop

Post by MrJedi »

Fidelity makes it very easy to autoroll bills yourself. Instead of the song and dance to try and get premium class shares maybe just roll some 4 week bills yourself? No expense ratio and guaranteed to be 100% state/local tax exempt.
drjd
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Re: Fidelity as a one stop shop

Post by drjd »

Heads up for everyone, on the Fideltiy sub-reddit the staff confirmed twice that ATM withdrawals internationally do incur a 1% FTF. Very surprising to me as everything I had read up to that point said that was only for transactions.
tj
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Re: Fidelity as a one stop shop

Post by tj »

drjd wrote: Thu Mar 09, 2023 9:27 am Heads up for everyone, on the Fideltiy sub-reddit the staff confirmed twice that ATM withdrawals internationally do incur a 1% FTF. Very surprising to me as everything I had read up to that point said that was only for transactions.
Not if you withdraw from the Cash Management Account.
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

tj wrote: Thu Mar 09, 2023 9:28 am
drjd wrote: Thu Mar 09, 2023 9:27 am Heads up for everyone, on the Fideltiy sub-reddit the staff confirmed twice that ATM withdrawals internationally do incur a 1% FTF. Very surprising to me as everything I had read up to that point said that was only for transactions.
Not if you withdraw from the Cash Management Account.
Do you have any links or references to that?

The CMA page says this along the bottom (emphasis mine):
3. Your account will automatically be reimbursed for all ATM fees charged by other institutions while using a Fidelity® Debit Card linked to your Fidelity Cash Management Account at any ATM displaying the Visa®, Plus®, or Star® logos. The reimbursement will be credited to the account the same day the ATM fee is debited from the account. Please note that there may be a foreign transaction fee of 1% that is not waived, which will be included in the amount charged to your account. The Fidelity® Debit Card is issued by PNC Bank, N.A., and the debit card program is administered by BNY Mellon Investment Servicing Trust Company. These entities are not affiliated with each other or with Fidelity Investments. Visa is a registered trademark of Visa International Service Association, and is used by PNC Bank pursuant to a license from Visa U.S.A. Inc.

https://www.fidelity.com/cash-managemen ... nt-account
drjd
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Re: Fidelity as a one stop shop

Post by drjd »

OhioAndy wrote: Thu Mar 09, 2023 9:34 am
tj wrote: Thu Mar 09, 2023 9:28 am
drjd wrote: Thu Mar 09, 2023 9:27 am Heads up for everyone, on the Fideltiy sub-reddit the staff confirmed twice that ATM withdrawals internationally do incur a 1% FTF. Very surprising to me as everything I had read up to that point said that was only for transactions.
Not if you withdraw from the Cash Management Account.
Do you have any links or references to that?

The CMA page says this along the bottom (emphasis mine):
3. Your account will automatically be reimbursed for all ATM fees charged by other institutions while using a Fidelity® Debit Card linked to your Fidelity Cash Management Account at any ATM displaying the Visa®, Plus®, or Star® logos. The reimbursement will be credited to the account the same day the ATM fee is debited from the account. Please note that there may be a foreign transaction fee of 1% that is not waived, which will be included in the amount charged to your account. The Fidelity® Debit Card is issued by PNC Bank, N.A., and the debit card program is administered by BNY Mellon Investment Servicing Trust Company. These entities are not affiliated with each other or with Fidelity Investments. Visa is a registered trademark of Visa International Service Association, and is used by PNC Bank pursuant to a license from Visa U.S.A. Inc.

https://www.fidelity.com/cash-managemen ... nt-account
https://www.reddit.com/r/fidelityinvest ... ithdrawal/

Here is the link to the thread, they were super clear that it does have the fee.

I agree I always heard the CMA didn't have that but I guess we were wrong?
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

drjd wrote: Thu Mar 09, 2023 9:42 am
OhioAndy wrote: Thu Mar 09, 2023 9:34 am
tj wrote: Thu Mar 09, 2023 9:28 am
drjd wrote: Thu Mar 09, 2023 9:27 am Heads up for everyone, on the Fideltiy sub-reddit the staff confirmed twice that ATM withdrawals internationally do incur a 1% FTF. Very surprising to me as everything I had read up to that point said that was only for transactions.
Not if you withdraw from the Cash Management Account.
Do you have any links or references to that?

The CMA page says this along the bottom (emphasis mine):
3. Your account will automatically be reimbursed for all ATM fees charged by other institutions while using a Fidelity® Debit Card linked to your Fidelity Cash Management Account at any ATM displaying the Visa®, Plus®, or Star® logos. The reimbursement will be credited to the account the same day the ATM fee is debited from the account. Please note that there may be a foreign transaction fee of 1% that is not waived, which will be included in the amount charged to your account. The Fidelity® Debit Card is issued by PNC Bank, N.A., and the debit card program is administered by BNY Mellon Investment Servicing Trust Company. These entities are not affiliated with each other or with Fidelity Investments. Visa is a registered trademark of Visa International Service Association, and is used by PNC Bank pursuant to a license from Visa U.S.A. Inc.

https://www.fidelity.com/cash-managemen ... nt-account
https://www.reddit.com/r/fidelityinvest ... ithdrawal/

Here is the link to the thread, they were super clear that it does have the fee.

I agree I always heard the CMA didn't have that but I guess we were wrong?
I wonder if it changed? I was pretty confident there were fees for debit transactions but not for ATM withdrawls.
tj
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Re: Fidelity as a one stop shop

Post by tj »

drjd wrote: Thu Mar 09, 2023 9:42 am
OhioAndy wrote: Thu Mar 09, 2023 9:34 am
tj wrote: Thu Mar 09, 2023 9:28 am
drjd wrote: Thu Mar 09, 2023 9:27 am Heads up for everyone, on the Fideltiy sub-reddit the staff confirmed twice that ATM withdrawals internationally do incur a 1% FTF. Very surprising to me as everything I had read up to that point said that was only for transactions.
Not if you withdraw from the Cash Management Account.
Do you have any links or references to that?

The CMA page says this along the bottom (emphasis mine):
3. Your account will automatically be reimbursed for all ATM fees charged by other institutions while using a Fidelity® Debit Card linked to your Fidelity Cash Management Account at any ATM displaying the Visa®, Plus®, or Star® logos. The reimbursement will be credited to the account the same day the ATM fee is debited from the account. Please note that there may be a foreign transaction fee of 1% that is not waived, which will be included in the amount charged to your account. The Fidelity® Debit Card is issued by PNC Bank, N.A., and the debit card program is administered by BNY Mellon Investment Servicing Trust Company. These entities are not affiliated with each other or with Fidelity Investments. Visa is a registered trademark of Visa International Service Association, and is used by PNC Bank pursuant to a license from Visa U.S.A. Inc.

https://www.fidelity.com/cash-managemen ... nt-account
https://www.reddit.com/r/fidelityinvest ... ithdrawal/

Here is the link to the thread, they were super clear that it does have the fee.

I agree I always heard the CMA didn't have that but I guess we were wrong?
I just used the card in Mexico 2 months ago. There was no 1% foreign ATM withdrawal fee.
MrJedi
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Re: Fidelity as a one stop shop

Post by MrJedi »

That foreign ATM fee has been disclosed for years but all of the anecdotes I've seen suggest that it's not enforced. I do not have direct experience, YMMV.
drjd
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Re: Fidelity as a one stop shop

Post by drjd »

tj wrote: Thu Mar 09, 2023 9:57 am
drjd wrote: Thu Mar 09, 2023 9:42 am
OhioAndy wrote: Thu Mar 09, 2023 9:34 am
tj wrote: Thu Mar 09, 2023 9:28 am
drjd wrote: Thu Mar 09, 2023 9:27 am Heads up for everyone, on the Fideltiy sub-reddit the staff confirmed twice that ATM withdrawals internationally do incur a 1% FTF. Very surprising to me as everything I had read up to that point said that was only for transactions.
Not if you withdraw from the Cash Management Account.
Do you have any links or references to that?

The CMA page says this along the bottom (emphasis mine):
3. Your account will automatically be reimbursed for all ATM fees charged by other institutions while using a Fidelity® Debit Card linked to your Fidelity Cash Management Account at any ATM displaying the Visa®, Plus®, or Star® logos. The reimbursement will be credited to the account the same day the ATM fee is debited from the account. Please note that there may be a foreign transaction fee of 1% that is not waived, which will be included in the amount charged to your account. The Fidelity® Debit Card is issued by PNC Bank, N.A., and the debit card program is administered by BNY Mellon Investment Servicing Trust Company. These entities are not affiliated with each other or with Fidelity Investments. Visa is a registered trademark of Visa International Service Association, and is used by PNC Bank pursuant to a license from Visa U.S.A. Inc.

https://www.fidelity.com/cash-managemen ... nt-account
https://www.reddit.com/r/fidelityinvest ... ithdrawal/

Here is the link to the thread, they were super clear that it does have the fee.

I agree I always heard the CMA didn't have that but I guess we were wrong?
I just used the card in Mexico 2 months ago. There was no 1% foreign ATM withdrawal fee.
Would we know it? I went back to an international ATM charge from January and it just has the total in USD, and a separate line to reimburse the ATM fee, but I don't know how I'd know if they added a 1% fee into the currency exchange
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

You can do a quick currency check if you know the name and the amount you took out.
manlymatt83
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Re: Fidelity as a one stop shop

Post by manlymatt83 »

Here's how we can verify:

- Take trip to Europe

- Insert Schwab ATM card and Fidelity CMA ATM card into two side by side ATMs at same time. Withdraw $500 from both.

- Compare total USD charges. Should be identical.

I may try this on my next trip.
mervinj7
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Re: Fidelity as a one stop shop

Post by mervinj7 »

manlymatt83 wrote: Thu Mar 09, 2023 11:15 am Here's how we can verify:

- Take trip to Europe

- Insert Schwab ATM card and Fidelity CMA ATM card into two side by side ATMs at same time. Withdraw $500 from both.

- Compare total USD charges. Should be identical.

I may try this on my next trip.
Yes, we did this with my brother in law on our last trip to France. It was identical.
wenchleaf
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Re: Fidelity as a one stop shop

Post by wenchleaf »

OhioAndy wrote: Thu Mar 09, 2023 10:39 am You can do a quick currency check if you know the name and the amount you took out.
Just to add clarification, historical conversion rates exist like this, so you can calculate what it should have cost.

https://fxtop.com/en/historical-currency-converter.php
https://usa.visa.com/support/consumer/t ... lator.html
Last edited by wenchleaf on Thu Mar 09, 2023 11:51 am, edited 1 time in total.
Lyrrad
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Re: Fidelity as a one stop shop

Post by Lyrrad »

manlymatt83 wrote: Thu Mar 09, 2023 11:15 am Here's how we can verify:

- Take trip to Europe

- Insert Schwab ATM card and Fidelity CMA ATM card into two side by side ATMs at same time. Withdraw $500 from both.

- Compare total USD charges. Should be identical.

I may try this on my next trip.
I've done this before and got the same rate from as another Visa network ATM withdrawal that had no forex fees in at least one foreign country. I think the rate should also match the rate on the Visa website: https://usa.visa.com/support/consumer/t ... lator.html
BoglesBeagle
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Re: Fidelity as a one stop shop

Post by BoglesBeagle »

mervinj7 wrote: Thu Mar 09, 2023 11:35 am
manlymatt83 wrote: Thu Mar 09, 2023 11:15 am Here's how we can verify:

- Take trip to Europe

- Insert Schwab ATM card and Fidelity CMA ATM card into two side by side ATMs at same time. Withdraw $500 from both.

- Compare total USD charges. Should be identical.

I may try this on my next trip.
Yes, we did this with my brother in law on our last trip to France. It was identical.
Also, wasn’t there some kind of settlement long ago about hidden foreign transaction fees, the outcome of which was that they now have to be broken out clearly on statements? So we might expect if they were truly passing along the 1% as they claim to be, it would be shown either as a separate line item or part of the memo line or something. (Anecdotally I think all other cards I have that I know to charge FTFs do this.) I’m having trouble finding it now, though, so I might be misremembering this or confusing it with something else.
drjd
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Re: Fidelity as a one stop shop

Post by drjd »

BoglesBeagle wrote: Thu Mar 09, 2023 1:49 pm
mervinj7 wrote: Thu Mar 09, 2023 11:35 am
manlymatt83 wrote: Thu Mar 09, 2023 11:15 am Here's how we can verify:

- Take trip to Europe

- Insert Schwab ATM card and Fidelity CMA ATM card into two side by side ATMs at same time. Withdraw $500 from both.

- Compare total USD charges. Should be identical.

I may try this on my next trip.
Yes, we did this with my brother in law on our last trip to France. It was identical.
Also, wasn’t there some kind of settlement long ago about hidden foreign transaction fees, the outcome of which was that they now have to be broken out clearly on statements? So we might expect if they were truly passing along the 1% as they claim to be, it would be shown either as a separate line item or part of the memo line or something. (Anecdotally I think all other cards I have that I know to charge FTFs do this.) I’m having trouble finding it now, though, so I might be misremembering this or confusing it with something else.
Interestingly on our last trip we accidentally used a CC with a foreign transaction fee and it was a separate line item.

Perhaps the fidelity reps are incorrect?
OhioAndy
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Re: Fidelity as a one stop shop

Post by OhioAndy »

drjd wrote: Thu Mar 09, 2023 2:33 pm
Interestingly on our last trip we accidentally used a CC with a foreign transaction fee and it was a separate line item.

Perhaps the fidelity reps are incorrect?
Based on the above, it would not shock me if:
  • Fidelity created a policy that FTFs could be charged for ATMs
  • A change to a law or reinterpretation of it indicated that the way they set it up put them at risk of being fined
  • They changed their operational procedures so fees were no longer levied
  • Updating their process for charging FTFs for ATM transactions is on their backlog but not a top priority so they left the policy alone so they later don't have to reverse it
  • OR they decided not to charge ATM FTF but no one told the folks that update the website
  • Customer service just goes by what's in their policy and procedures so they answer the questions to match that vs how things actually work
Of course it would also not surprise me if they just were wrong.
spammagnet
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Re: Fidelity as a one stop shop

Post by spammagnet »

OhioAndy wrote: Thu Mar 09, 2023 8:42 amUPDATE: Fidelity declined to do a transfer from the IRA to the CMA. They said an in-kind transfer in this case is no different than a purchase so the $100k minimum applies. (They transferred us around to several people and put us on hold for about an hour.)
Having done the transfer in kind from IRA to CMA, I'll be careful to never let it drop to $0, lest I'm not allowed to transfer again.
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JoMoney
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Re: Fidelity as a one stop shop

Post by JoMoney »

spammagnet wrote: Thu Mar 09, 2023 9:24 pm
OhioAndy wrote: Thu Mar 09, 2023 8:42 amUPDATE: Fidelity declined to do a transfer from the IRA to the CMA. They said an in-kind transfer in this case is no different than a purchase so the $100k minimum applies. (They transferred us around to several people and put us on hold for about an hour.)
Having done the transfer in kind from IRA to CMA, I'll be careful to never let it drop to $0, lest I'm not allowed to transfer again.
Interesting that you were able to in the past. When doing an online transfer, money market funds show up as available cash to transfer, so there's no in-kind transfer option for MM funds online.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
spammagnet
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Re: Fidelity as a one stop shop

Post by spammagnet »

JoMoney wrote: Thu Mar 09, 2023 9:33 pm
spammagnet wrote: Thu Mar 09, 2023 9:24 pm
OhioAndy wrote: Thu Mar 09, 2023 8:42 amUPDATE: Fidelity declined to do a transfer from the IRA to the CMA. They said an in-kind transfer in this case is no different than a purchase so the $100k minimum applies. (They transferred us around to several people and put us on hold for about an hour.)
Having done the transfer in kind from IRA to CMA, I'll be careful to never let it drop to $0, lest I'm not allowed to transfer again.
Interesting that you were able to in the past. When doing an online transfer, money market funds show up as available cash to transfer, so there's no in-kind transfer option for MM funds online.
It required a rep to do it. There was no hesitation on their part.
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indexfundfan
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Re: Fidelity as a one stop shop

Post by indexfundfan »

After computing the latest TEYs, I just submitted an exchange of FZDXX to FDLXX (Treasury Only MMF). It's an easy move for me since FDLXX has a slightly higher TEY and unlike FZDXX, FDLXX does not hold any commercial paper and should not be directly impacted by any effect (if any) of the SVB debacle.
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engineerbme
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Re: Fidelity as a one stop shop

Post by engineerbme »

anon_investor wrote: Wed Mar 08, 2023 12:53 pm For folks with states/local income tax(es), after factoring in taxes, FDLXX currently may actually yield a little more than FZDXX. FDLXX is a retail treasury only money market fund so it is not subject to liqudity gates, so in theory it is a little safter than FZDXX.
um you still have to pay some taxes on FDLXX; even if it's like ~6% it's not 100% state tax free just FYI everyone: https://www.fidelity.com/bin-public/060 ... Letter.pdf
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indexfundfan
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Re: Fidelity as a one stop shop

Post by indexfundfan »

engineerbme wrote: Fri Mar 10, 2023 11:32 am
anon_investor wrote: Wed Mar 08, 2023 12:53 pm For folks with states/local income tax(es), after factoring in taxes, FDLXX currently may actually yield a little more than FZDXX. FDLXX is a retail treasury only money market fund so it is not subject to liqudity gates, so in theory it is a little safter than FZDXX.
um you still have to pay some taxes on FDLXX; even if it's like ~6% it's not 100% state tax free just FYI everyone: https://www.fidelity.com/bin-public/060 ... Letter.pdf
Yes, around 94% state-tax exempted last year. The figure was 96% in 2021.
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BoglesBeagle
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Re: Fidelity as a one stop shop

Post by BoglesBeagle »

JoMoney wrote: Thu Mar 09, 2023 9:33 pm Interesting that you were able to in the past. When doing an online transfer, money market funds show up as available cash to transfer, so there's no in-kind transfer option for MM funds online.
Also, the transfer flow on the website doesn’t seem to allow in-kind distributions out of IRAs, though it does allow shares to be moved between taxable accounts, with some exceptions (e.g., not from margin positions to non-margin accounts). I don’t see the option for non-MMF IRA holdings, either. In fact, before this thread I didn’t know in-kind distributions were possible by calling!
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anon_investor
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Re: Fidelity as a one stop shop

Post by anon_investor »

indexfundfan wrote: Fri Mar 10, 2023 11:37 am
engineerbme wrote: Fri Mar 10, 2023 11:32 am
anon_investor wrote: Wed Mar 08, 2023 12:53 pm For folks with states/local income tax(es), after factoring in taxes, FDLXX currently may actually yield a little more than FZDXX. FDLXX is a retail treasury only money market fund so it is not subject to liqudity gates, so in theory it is a little safter than FZDXX.
um you still have to pay some taxes on FDLXX; even if it's like ~6% it's not 100% state tax free just FYI everyone: https://www.fidelity.com/bin-public/060 ... Letter.pdf
Yes, around 94% state-tax exempted last year. The figure was 96% in 2021.
Obviously YMMV depending on your state/local income tax rate but the the math may still says FDLXX after tax pays more than FZDXX.
leland
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Re: Fidelity as a one stop shop

Post by leland »

anon_investor wrote: Fri Mar 10, 2023 3:58 pm Obviously YMMV depending on your state/local income tax rate but the the math may still says FDLXX after tax pays more than FZDXX.
No state/local income tax - math varies :) Haven't seen a federal exempt fund come close to FZDXX, though.
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