Place to hold money and earn interest

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Topic Author
justsomeguy2018
Posts: 1509
Joined: Wed Oct 03, 2018 8:11 pm

Place to hold money and earn interest

Post by justsomeguy2018 »

I have $170k in a Savings account earning 2% interest.

I also have $25k in a national bank chain paying .01% interest. This is a checking account where all direct deposits go and all bills get paid from. Basically it's my "functional account". It's value will fluctuate anywhere from $15k - $30k as money ebbs and flows from the account. I do keep a minimum of $15k there to avoid a monthly fee. This bank has a lot of ATMs in my area and I've used them for 8 years so there is a convenience factor there.

My question is, is there a better option that can be just as functional as my current checking account (free ATM access, check writing, etc.), but that pays more like the 2% interest I get at my savings account? And that doesn't have some ridiculous requirement like make 15 debit card transactions etc.

Side question - is there a better place to park the $170k (or at least a portion of it) right now? I haven't moved it yet because I keep thinking higher rates will keep coming so don't want to get it "locked in" just yet but think it is now time to.
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anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: Place to hold money and earn interest

Post by anon_investor »

justsomeguy2018 wrote: Sat Sep 24, 2022 6:09 pm I have $170k in a Savings account earning 2% interest.

I also have $25k in a national bank chain paying .01% interest. This is a checking account where all direct deposits go and all bills get paid from. Basically it's my "functional account". It's value will fluctuate anywhere from $15k - $30k as money ebbs and flows from the account. I do keep a minimum of $15k there to avoid a monthly fee. This bank has a lot of ATMs in my area and I've used them for 8 years so there is a convenience factor there.

My question is, is there a better option that can be just as functional as my current checking account (free ATM access, check writing, etc.), but that pays more like the 2% interest I get at my savings account? And that doesn't have some ridiculous requirement like make 15 debit card transactions etc.

Side question - is there a better place to park the $170k (or at least a portion of it) right now? I haven't moved it yet because I keep thinking higher rates will keep coming so don't want to get it "locked in" just yet but think it is now time to.
I am using a Fidelity Cash Management Account (CMA) as my main checking account. You can store you funds in a variety of Fidelity money market funds (including super safe treasury only ones) that all pay over 2% and Fidelity will auto liquidate to satisfy any debits. You can pay bills from it via ACH, checks, ATM, wire, and bill pay. Checks are free and ATM fees are reimbursed. It's great, no fees or minimum balance or need to jump through any hoops.
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RetirementClass2021
Posts: 119
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Re: Place to hold money and earn interest

Post by RetirementClass2021 »

100% agree regarding Fidelity Cash Management Account.

I have used Fidelity as my financial "One Stop Shop" since January 2009. It has been extremely convenient to have my cash, credit card, 401k and now my in-retirement IRA at one financial Institution. The CMA core holding FDRXX is currently paying a 7-day yield of 2.13%.

As the previous respondent mentioned bill pay and checks (if needed) are free. ATM charges are reimbursed.

Give it a try. You won't be disappointed.
VTI 52% VXUS 13% BND 10.5% BNDX 7% SCHP 17.5% | Globally diversified low-cost passive index fund portfolio | “Forget the needle, buy the haystack.” - John C. Bogle
Bot403
Posts: 25
Joined: Tue Sep 11, 2018 5:48 pm

Re: Place to hold money and earn interest

Post by Bot403 »

I mean, sorry to not answer the question at hand but 15k minimum and .01 interest is terrible. You should be able to get much lower minimums elsewhere for a defacto non interest bearing account then free up $14k of that to put to work.

If easy ATMs are your concern then there are banks which reimburse you for *all* ATM fees. I'm with E-Trade Max rate checking and they have no minimum and ATM reimbursement as long as you have a minimum of $200 direct deposit/mo.
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anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: Place to hold money and earn interest

Post by anon_investor »

Recently Retired wrote: Sat Sep 24, 2022 8:30 pm 100% agree regarding Fidelity Cash Management Account.

I have used Fidelity as my financial "One Stop Shop" since January 2009. It has been extremely convenient to have my cash, credit card, 401k and now my in-retirement IRA at one financial Institution. The CMA core holding FDRXX is currently paying a 7-day yield of 2.13%.

As the previous respondent mentioned bill pay and checks (if needed) are free. ATM charges are reimbursed.

Give it a try. You won't be disappointed.
How did you change your CMA core from "FDIC insured sweep" to FDRXX? I manually buy SPRXX (currently paying 2.27%) when my pay check hits (1 day early) my Fidelity CMA via direct deposit. If one wants a more conservative Fidelity money market fund:

FZFXX (treasury money market fund) pays 2.17%
FDLXX (treasury only money market fund) pays 2.12%
FDRXX (government money market fund) pays 2.13%
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VictorStarr
Posts: 746
Joined: Sat Jan 04, 2020 9:13 pm
Location: Washington

Re: Place to hold money and earn interest

Post by VictorStarr »

justsomeguy2018 wrote: Sat Sep 24, 2022 6:09 pm I have $170k in a Savings account earning 2% interest.

I also have $25k in a national bank chain paying .01% interest. This is a checking account where all direct deposits go and all bills get paid from. Basically it's my "functional account". It's value will fluctuate anywhere from $15k - $30k as money ebbs and flows from the account. I do keep a minimum of $15k there to avoid a monthly fee. This bank has a lot of ATMs in my area and I've used them for 8 years so there is a convenience factor there.

My question is, is there a better option that can be just as functional as my current checking account (free ATM access, check writing, etc.), but that pays more like the 2% interest I get at my savings account? And that doesn't have some ridiculous requirement like make 15 debit card transactions etc.

Side question - is there a better place to park the $170k (or at least a portion of it) right now? I haven't moved it yet because I keep thinking higher rates will keep coming so don't want to get it "locked in" just yet but think it is now time to.
If your "national bank chain" is Chase, you can open a JP Morgan Self Directed account and put $170K into Vanguard VMFXX money market fund, current yield 2.49% and will hit 2.9-3% in 2-3 weeks. Balance in the Self Directed account would accounted for waiving a monthly fee.

Another good option is Fidelity CMA or/and Brokerage (see https://www.bogleheads.org/wiki/Fidelity:_one_stop_shop for details). Fidelity FZDXX fund has a yield similar to Vanguard VMFXX fund and CMA core position is FDIC account with 1.6% yield. FZDXX has a purchase minimum of $100K.
Last edited by VictorStarr on Sat Sep 24, 2022 10:48 pm, edited 1 time in total.
harikaried
Posts: 2613
Joined: Fri Mar 09, 2012 2:47 pm

Re: Place to hold money and earn interest

Post by harikaried »

justsomeguy2018 wrote: Sat Sep 24, 2022 6:09 pmI have $170k in a Savings account earning 2% interest
As others have mentioned Fidelity's Cash Management Account, you can buy into FZDXX with a $100k minimum, and then you can withdraw back into your savings account if that's desired. Although it's currently yielding 2.39%, so maybe you'll simplify and get rid of that separate savings account?

https://fundresearch.fidelity.com/mutua ... /31617H805
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RetirementClass2021
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Re: Place to hold money and earn interest

Post by RetirementClass2021 »

anon_investor wrote: Sat Sep 24, 2022 10:29 pm
Recently Retired wrote: Sat Sep 24, 2022 8:30 pm 100% agree regarding Fidelity Cash Management Account.

I have used Fidelity as my financial "One Stop Shop" since January 2009. It has been extremely convenient to have my cash, credit card, 401k and now my in-retirement IRA at one financial Institution. The CMA core holding FDRXX is currently paying a 7-day yield of 2.13%.

As the previous respondent mentioned bill pay and checks (if needed) are free. ATM charges are reimbursed.

Give it a try. You won't be disappointed.
How did you change your CMA core from "FDIC insured sweep" to FDRXX? I manually buy SPRXX (currently paying 2.27%) when my pay check hits (1 day early) my Fidelity CMA via direct deposit. If one wants a more conservative Fidelity money market fund:

FZFXX (treasury money market fund) pays 2.17%
FDLXX (treasury only money market fund) pays 2.12%
FDRXX (government money market fund) pays 2.13%
Click on your core position fund and the green Change Core Position button will appear. Click on that and you can change to any of the fund(s) offered. For example my original core was SPAXX and FDRXX was the option offered that I was able to change to.
VTI 52% VXUS 13% BND 10.5% BNDX 7% SCHP 17.5% | Globally diversified low-cost passive index fund portfolio | “Forget the needle, buy the haystack.” - John C. Bogle
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anon_investor
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Re: Place to hold money and earn interest

Post by anon_investor »

Recently Retired wrote: Sat Sep 24, 2022 11:09 pm
anon_investor wrote: Sat Sep 24, 2022 10:29 pm
Recently Retired wrote: Sat Sep 24, 2022 8:30 pm 100% agree regarding Fidelity Cash Management Account.

I have used Fidelity as my financial "One Stop Shop" since January 2009. It has been extremely convenient to have my cash, credit card, 401k and now my in-retirement IRA at one financial Institution. The CMA core holding FDRXX is currently paying a 7-day yield of 2.13%.

As the previous respondent mentioned bill pay and checks (if needed) are free. ATM charges are reimbursed.

Give it a try. You won't be disappointed.
How did you change your CMA core from "FDIC insured sweep" to FDRXX? I manually buy SPRXX (currently paying 2.27%) when my pay check hits (1 day early) my Fidelity CMA via direct deposit. If one wants a more conservative Fidelity money market fund:

FZFXX (treasury money market fund) pays 2.17%
FDLXX (treasury only money market fund) pays 2.12%
FDRXX (government money market fund) pays 2.13%
Click on your core position fund and the green Change Core Position button will appear. Click on that and you can change to any of the fund(s) offered. For example my original core was SPAXX and FDRXX was the option offered that I was able to change to.
Is this for your brokerage or CMA? My brokerage allows me to use SPAXX or FZFXX for my core position, but my CMA only allows the FDIC insured sweep. No biggie though since Fido auto liquidates money market positions to satisfy debits. I am comfortable using SPRXX right now but would switch to FZFXX or FDLXX if I had concerns with using a prime money market fund.
chassis
Posts: 2184
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Re: Place to hold money and earn interest

Post by chassis »

justsomeguy2018 wrote: Sat Sep 24, 2022 6:09 pm I have $170k in a Savings account earning 2% interest.

I also have $25k in a national bank chain paying .01% interest. This is a checking account where all direct deposits go and all bills get paid from. Basically it's my "functional account". It's value will fluctuate anywhere from $15k - $30k as money ebbs and flows from the account. I do keep a minimum of $15k there to avoid a monthly fee. This bank has a lot of ATMs in my area and I've used them for 8 years so there is a convenience factor there.

My question is, is there a better option that can be just as functional as my current checking account (free ATM access, check writing, etc.), but that pays more like the 2% interest I get at my savings account? And that doesn't have some ridiculous requirement like make 15 debit card transactions etc.

Side question - is there a better place to park the $170k (or at least a portion of it) right now? I haven't moved it yet because I keep thinking higher rates will keep coming so don't want to get it "locked in" just yet but think it is now time to.
+4 for Fidelity Cash Management Account. With $170k + $25k you can purchase FZDXX and earn 2% or a big more. Checkwriting feature and ATM fees are reimbursed for any Visa branded ATMs.
chassis
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Re: Place to hold money and earn interest

Post by chassis »

anon_investor wrote: Sat Sep 24, 2022 10:29 pm
Recently Retired wrote: Sat Sep 24, 2022 8:30 pm 100% agree regarding Fidelity Cash Management Account.

I have used Fidelity as my financial "One Stop Shop" since January 2009. It has been extremely convenient to have my cash, credit card, 401k and now my in-retirement IRA at one financial Institution. The CMA core holding FDRXX is currently paying a 7-day yield of 2.13%.

As the previous respondent mentioned bill pay and checks (if needed) are free. ATM charges are reimbursed.

Give it a try. You won't be disappointed.
How did you change your CMA core from "FDIC insured sweep" to FDRXX? I manually buy SPRXX (currently paying 2.27%) when my pay check hits (1 day early) my Fidelity CMA via direct deposit. If one wants a more conservative Fidelity money market fund:

FZFXX (treasury money market fund) pays 2.17%
FDLXX (treasury only money market fund) pays 2.12%
FDRXX (government money market fund) pays 2.13%
Core sweep can't be changed to FDRXX in the CMA. Need to manually purchase, similar to SPRXX.
Doc7
Posts: 1122
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Re: Place to hold money and earn interest

Post by Doc7 »

chassis wrote: Sun Sep 25, 2022 7:37 am
anon_investor wrote: Sat Sep 24, 2022 10:29 pm
Recently Retired wrote: Sat Sep 24, 2022 8:30 pm 100% agree regarding Fidelity Cash Management Account.

I have used Fidelity as my financial "One Stop Shop" since January 2009. It has been extremely convenient to have my cash, credit card, 401k and now my in-retirement IRA at one financial Institution. The CMA core holding FDRXX is currently paying a 7-day yield of 2.13%.

As the previous respondent mentioned bill pay and checks (if needed) are free. ATM charges are reimbursed.

Give it a try. You won't be disappointed.
How did you change your CMA core from "FDIC insured sweep" to FDRXX? I manually buy SPRXX (currently paying 2.27%) when my pay check hits (1 day early) my Fidelity CMA via direct deposit. If one wants a more conservative Fidelity money market fund:

FZFXX (treasury money market fund) pays 2.17%
FDLXX (treasury only money market fund) pays 2.12%
FDRXX (government money market fund) pays 2.13%
Core sweep can't be changed to FDRXX in the CMA. Need to manually purchase, similar to SPRXX.


Will it automatically liquidate the “manual purchase” funds as needed? Does the CMA work by only offering funds that it would liquidate as needed, and not for example, AAPL or VTI?
mongstradamus
Posts: 399
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Re: Place to hold money and earn interest

Post by mongstradamus »

Doc7 wrote: Sun Sep 25, 2022 8:00 am
chassis wrote: Sun Sep 25, 2022 7:37 am
anon_investor wrote: Sat Sep 24, 2022 10:29 pm
Recently Retired wrote: Sat Sep 24, 2022 8:30 pm 100% agree regarding Fidelity Cash Management Account.

I have used Fidelity as my financial "One Stop Shop" since January 2009. It has been extremely convenient to have my cash, credit card, 401k and now my in-retirement IRA at one financial Institution. The CMA core holding FDRXX is currently paying a 7-day yield of 2.13%.

As the previous respondent mentioned bill pay and checks (if needed) are free. ATM charges are reimbursed.

Give it a try. You won't be disappointed.
How did you change your CMA core from "FDIC insured sweep" to FDRXX? I manually buy SPRXX (currently paying 2.27%) when my pay check hits (1 day early) my Fidelity CMA via direct deposit. If one wants a more conservative Fidelity money market fund:

FZFXX (treasury money market fund) pays 2.17%
FDLXX (treasury only money market fund) pays 2.12%
FDRXX (government money market fund) pays 2.13%
Core sweep can't be changed to FDRXX in the CMA. Need to manually purchase, similar to SPRXX.


Will it automatically liquidate the “manual purchase” funds as needed? Does the CMA work by only offering funds that it would liquidate as needed, and not for example, AAPL or VTI?
Should only liquidate money market funds don’t matter which one can be prime treasury only or any of the core ones.
dcabler
Posts: 4544
Joined: Wed Feb 19, 2014 10:30 am
Location: TX

Re: Place to hold money and earn interest

Post by dcabler »

justsomeguy2018 wrote: Sat Sep 24, 2022 6:09 pm I have $170k in a Savings account earning 2% interest.

I also have $25k in a national bank chain paying .01% interest. This is a checking account where all direct deposits go and all bills get paid from. Basically it's my "functional account". It's value will fluctuate anywhere from $15k - $30k as money ebbs and flows from the account. I do keep a minimum of $15k there to avoid a monthly fee. This bank has a lot of ATMs in my area and I've used them for 8 years so there is a convenience factor there.

My question is, is there a better option that can be just as functional as my current checking account (free ATM access, check writing, etc.), but that pays more like the 2% interest I get at my savings account? And that doesn't have some ridiculous requirement like make 15 debit card transactions etc.

Side question - is there a better place to park the $170k (or at least a portion of it) right now? I haven't moved it yet because I keep thinking higher rates will keep coming so don't want to get it "locked in" just yet but think it is now time to.
I have a similar amount and I've put it in rolling T-Bills held at TreasuryDirect. As they mature, the proceeds are dumped back into my checking account. It's one of the better "least worst" options around at the moment. But I also have a sizeable chunk in my high yield checking account (which is only high yield to $10K). Anyway the money in checking is there for paying bills, ATM etc... Doesn't have to be all or nothing...

cheers.
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whodidntante
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Re: Place to hold money and earn interest

Post by whodidntante »

anon_investor wrote: Sat Sep 24, 2022 10:29 pm
Recently Retired wrote: Sat Sep 24, 2022 8:30 pm 100% agree regarding Fidelity Cash Management Account.

I have used Fidelity as my financial "One Stop Shop" since January 2009. It has been extremely convenient to have my cash, credit card, 401k and now my in-retirement IRA at one financial Institution. The CMA core holding FDRXX is currently paying a 7-day yield of 2.13%.

As the previous respondent mentioned bill pay and checks (if needed) are free. ATM charges are reimbursed.

Give it a try. You won't be disappointed.
How did you change your CMA core from "FDIC insured sweep" to FDRXX? I manually buy SPRXX (currently paying 2.27%) when my pay check hits (1 day early) my Fidelity CMA via direct deposit. If one wants a more conservative Fidelity money market fund:

FZFXX (treasury money market fund) pays 2.17%
FDLXX (treasury only money market fund) pays 2.12%
FDRXX (government money market fund) pays 2.13%
The Treasury-only fund has the highest after-tax yield for me, because I live in a People's Republic state.
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anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: Place to hold money and earn interest

Post by anon_investor »

mongstradamus wrote: Sun Sep 25, 2022 8:06 am
Doc7 wrote: Sun Sep 25, 2022 8:00 am
chassis wrote: Sun Sep 25, 2022 7:37 am
anon_investor wrote: Sat Sep 24, 2022 10:29 pm
Recently Retired wrote: Sat Sep 24, 2022 8:30 pm 100% agree regarding Fidelity Cash Management Account.

I have used Fidelity as my financial "One Stop Shop" since January 2009. It has been extremely convenient to have my cash, credit card, 401k and now my in-retirement IRA at one financial Institution. The CMA core holding FDRXX is currently paying a 7-day yield of 2.13%.

As the previous respondent mentioned bill pay and checks (if needed) are free. ATM charges are reimbursed.

Give it a try. You won't be disappointed.
How did you change your CMA core from "FDIC insured sweep" to FDRXX? I manually buy SPRXX (currently paying 2.27%) when my pay check hits (1 day early) my Fidelity CMA via direct deposit. If one wants a more conservative Fidelity money market fund:

FZFXX (treasury money market fund) pays 2.17%
FDLXX (treasury only money market fund) pays 2.12%
FDRXX (government money market fund) pays 2.13%
Core sweep can't be changed to FDRXX in the CMA. Need to manually purchase, similar to SPRXX.


Will it automatically liquidate the “manual purchase” funds as needed? Does the CMA work by only offering funds that it would liquidate as needed, and not for example, AAPL or VTI?
Should only liquidate money market funds don’t matter which one can be prime treasury only or any of the core ones.
Yep, that's how it works for me.
Topic Author
justsomeguy2018
Posts: 1509
Joined: Wed Oct 03, 2018 8:11 pm

Re: Place to hold money and earn interest

Post by justsomeguy2018 »

anon_investor wrote: Sat Sep 24, 2022 7:22 pm
justsomeguy2018 wrote: Sat Sep 24, 2022 6:09 pm I have $170k in a Savings account earning 2% interest.

I also have $25k in a national bank chain paying .01% interest. This is a checking account where all direct deposits go and all bills get paid from. Basically it's my "functional account". It's value will fluctuate anywhere from $15k - $30k as money ebbs and flows from the account. I do keep a minimum of $15k there to avoid a monthly fee. This bank has a lot of ATMs in my area and I've used them for 8 years so there is a convenience factor there.

My question is, is there a better option that can be just as functional as my current checking account (free ATM access, check writing, etc.), but that pays more like the 2% interest I get at my savings account? And that doesn't have some ridiculous requirement like make 15 debit card transactions etc.

Side question - is there a better place to park the $170k (or at least a portion of it) right now? I haven't moved it yet because I keep thinking higher rates will keep coming so don't want to get it "locked in" just yet but think it is now time to.
I am using a Fidelity Cash Management Account (CMA) as my main checking account. You can store you funds in a variety of Fidelity money market funds (including super safe treasury only ones) that all pay over 2% and Fidelity will auto liquidate to satisfy any debits. You can pay bills from it via ACH, checks, ATM, wire, and bill pay. Checks are free and ATM fees are reimbursed. It's great, no fees or minimum balance or need to jump through any hoops.
Question - I noticed I am unable to change my core holding with the CMA. The core is FDIC core paying 1.57%. Can I buy something like FZRXX and will the funds in there be used for debit card transactions/check cashing, or does it need to stay in the Core account paying 1.57%?
chassis
Posts: 2184
Joined: Tue Mar 24, 2020 4:28 pm

Re: Place to hold money and earn interest

Post by chassis »

justsomeguy2018 wrote: Sun Oct 09, 2022 5:29 pm
anon_investor wrote: Sat Sep 24, 2022 7:22 pm
justsomeguy2018 wrote: Sat Sep 24, 2022 6:09 pm I have $170k in a Savings account earning 2% interest.

I also have $25k in a national bank chain paying .01% interest. This is a checking account where all direct deposits go and all bills get paid from. Basically it's my "functional account". It's value will fluctuate anywhere from $15k - $30k as money ebbs and flows from the account. I do keep a minimum of $15k there to avoid a monthly fee. This bank has a lot of ATMs in my area and I've used them for 8 years so there is a convenience factor there.

My question is, is there a better option that can be just as functional as my current checking account (free ATM access, check writing, etc.), but that pays more like the 2% interest I get at my savings account? And that doesn't have some ridiculous requirement like make 15 debit card transactions etc.

Side question - is there a better place to park the $170k (or at least a portion of it) right now? I haven't moved it yet because I keep thinking higher rates will keep coming so don't want to get it "locked in" just yet but think it is now time to.
I am using a Fidelity Cash Management Account (CMA) as my main checking account. You can store you funds in a variety of Fidelity money market funds (including super safe treasury only ones) that all pay over 2% and Fidelity will auto liquidate to satisfy any debits. You can pay bills from it via ACH, checks, ATM, wire, and bill pay. Checks are free and ATM fees are reimbursed. It's great, no fees or minimum balance or need to jump through any hoops.
Question - I noticed I am unable to change my core holding with the CMA. The core is FDIC core paying 1.57%. Can I buy something like FZRXX and will the funds in there be used for debit card transactions/check cashing, or does it need to stay in the Core account paying 1.57%?
Funds do not need to stay in the core position, they can be held in other investment. Please have a read through the active "Fidelity as a one-stop shop" thread. Your question has been directly addressed.
Topic Author
justsomeguy2018
Posts: 1509
Joined: Wed Oct 03, 2018 8:11 pm

Re: Place to hold money and earn interest

Post by justsomeguy2018 »

chassis wrote: Sun Oct 09, 2022 8:34 pm
justsomeguy2018 wrote: Sun Oct 09, 2022 5:29 pm
anon_investor wrote: Sat Sep 24, 2022 7:22 pm
justsomeguy2018 wrote: Sat Sep 24, 2022 6:09 pm I have $170k in a Savings account earning 2% interest.

I also have $25k in a national bank chain paying .01% interest. This is a checking account where all direct deposits go and all bills get paid from. Basically it's my "functional account". It's value will fluctuate anywhere from $15k - $30k as money ebbs and flows from the account. I do keep a minimum of $15k there to avoid a monthly fee. This bank has a lot of ATMs in my area and I've used them for 8 years so there is a convenience factor there.

My question is, is there a better option that can be just as functional as my current checking account (free ATM access, check writing, etc.), but that pays more like the 2% interest I get at my savings account? And that doesn't have some ridiculous requirement like make 15 debit card transactions etc.

Side question - is there a better place to park the $170k (or at least a portion of it) right now? I haven't moved it yet because I keep thinking higher rates will keep coming so don't want to get it "locked in" just yet but think it is now time to.
I am using a Fidelity Cash Management Account (CMA) as my main checking account. You can store you funds in a variety of Fidelity money market funds (including super safe treasury only ones) that all pay over 2% and Fidelity will auto liquidate to satisfy any debits. You can pay bills from it via ACH, checks, ATM, wire, and bill pay. Checks are free and ATM fees are reimbursed. It's great, no fees or minimum balance or need to jump through any hoops.
Question - I noticed I am unable to change my core holding with the CMA. The core is FDIC core paying 1.57%. Can I buy something like FZRXX and will the funds in there be used for debit card transactions/check cashing, or does it need to stay in the Core account paying 1.57%?
Funds do not need to stay in the core position, they can be held in other investment. Please have a read through the active "Fidelity as a one-stop shop" thread. Your question has been directly addressed.
Do you have a link to the thread, I couldn't find it? Searching the forum led to 165 results and I didn't see that title.
mongstradamus
Posts: 399
Joined: Mon Nov 04, 2013 10:46 pm

Re: Place to hold money and earn interest

Post by mongstradamus »

justsomeguy2018 wrote: Sun Oct 09, 2022 10:08 pm
chassis wrote: Sun Oct 09, 2022 8:34 pm
justsomeguy2018 wrote: Sun Oct 09, 2022 5:29 pm
anon_investor wrote: Sat Sep 24, 2022 7:22 pm
justsomeguy2018 wrote: Sat Sep 24, 2022 6:09 pm I have $170k in a Savings account earning 2% interest.

I also have $25k in a national bank chain paying .01% interest. This is a checking account where all direct deposits go and all bills get paid from. Basically it's my "functional account". It's value will fluctuate anywhere from $15k - $30k as money ebbs and flows from the account. I do keep a minimum of $15k there to avoid a monthly fee. This bank has a lot of ATMs in my area and I've used them for 8 years so there is a convenience factor there.

My question is, is there a better option that can be just as functional as my current checking account (free ATM access, check writing, etc.), but that pays more like the 2% interest I get at my savings account? And that doesn't have some ridiculous requirement like make 15 debit card transactions etc.

Side question - is there a better place to park the $170k (or at least a portion of it) right now? I haven't moved it yet because I keep thinking higher rates will keep coming so don't want to get it "locked in" just yet but think it is now time to.
I am using a Fidelity Cash Management Account (CMA) as my main checking account. You can store you funds in a variety of Fidelity money market funds (including super safe treasury only ones) that all pay over 2% and Fidelity will auto liquidate to satisfy any debits. You can pay bills from it via ACH, checks, ATM, wire, and bill pay. Checks are free and ATM fees are reimbursed. It's great, no fees or minimum balance or need to jump through any hoops.
Question - I noticed I am unable to change my core holding with the CMA. The core is FDIC core paying 1.57%. Can I buy something like FZRXX and will the funds in there be used for debit card transactions/check cashing, or does it need to stay in the Core account paying 1.57%?
Funds do not need to stay in the core position, they can be held in other investment. Please have a read through the active "Fidelity as a one-stop shop" thread. Your question has been directly addressed.
Do you have a link to the thread, I couldn't find it? Searching the forum led to 165 results and I didn't see that title.
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JoMoney
Posts: 16260
Joined: Tue Jul 23, 2013 5:31 am

Re: Place to hold money and earn interest

Post by JoMoney »

justsomeguy2018 wrote: Sun Oct 09, 2022 5:29 pm...
Question - I noticed I am unable to change my core holding with the CMA. The core is FDIC core paying 1.57%. Can I buy something like FZRXX and will the funds in there be used for debit card transactions/check cashing, or does it need to stay in the Core account paying 1.57%?
With the CMA you can't change the core position to anything else, but you can buy other Fidelity Money Market funds, and if/when the core position is at a zero balance it will automatically liquidate other money market funds for ATM, BillPay, other withdrawals or security purchases. It will not liquidate any non-money market securities/funds you hold in the account. Just make sure to review your "Available balance" on the Cash management page to ensure the amount that's "available" for immediate withdrawal, which should include the other money market funds you hold.

If you opened a regular Fidelity brokerage account (not CMA account), you have a couple other options for Government money market funds that can be set as the default core fund. You can also add atm/debit card, bill pay, check writing, and all the other CMA features to the regular brokerage account, but unless your account meets certain criteria, the broker account doesn't refund ATM fees (but there are a lot of fee-free ATMs out there, pretty much all the ATM's listed as free on PNC Bank's ATM network)
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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justsomeguy2018
Posts: 1509
Joined: Wed Oct 03, 2018 8:11 pm

Re: Place to hold money and earn interest

Post by justsomeguy2018 »

JoMoney wrote: Sun Oct 09, 2022 10:31 pm
justsomeguy2018 wrote: Sun Oct 09, 2022 5:29 pm...
Question - I noticed I am unable to change my core holding with the CMA. The core is FDIC core paying 1.57%. Can I buy something like FZRXX and will the funds in there be used for debit card transactions/check cashing, or does it need to stay in the Core account paying 1.57%?
With the CMA you can't change the core position to anything else, but you can buy other Fidelity Money Market funds, and if/when the core position is at a zero balance it will automatically liquidate other money market funds for ATM, BillPay, other withdrawals or security purchases. It will not liquidate any non-money market securities/funds you hold in the account. Just make sure to review your "Available balance" on the Cash management page to ensure the amount that's "available" for immediate withdrawal, which should include the other money market funds you hold.

If you opened a regular Fidelity brokerage account (not CMA account), you have a couple other options for Government money market funds that can be set as the default core fund. You can also add atm/debit card, bill pay, check writing, and all the other CMA features to the regular brokerage account, but unless your account meets certain criteria, the broker account doesn't refund ATM fees (but there are a lot of fee-free ATMs out there, pretty much all the ATM's listed as free on PNC Bank's ATM network)
JoMoney, just curious, I just spoke with a Fidelity rep to get some more details on the CMA account, and they told me that the automatic liquidation of other money market funds for paying credit card bills, direct debit, ATM, etc. doesn't happen (except in very certain circumstances). That the money needs to be in the Core FDIC insured sweep or the transaction won't happen and will show up as a bounced check.

Now you would think I should trust the words of the Fidelity rep over a random Internet stranger but it wouldn't be the first time I've gotten some incorrect information from them.

Do you have any more info/experience with this, obviously I cannot afford to "test it" on an automatic credit card monthly payoff since if the debit doesn't happen I would incur a late charge, interest expense, and credit score damage.

I use my CCs for cash back and pay them off in full each month, the primary transfers from this CMA account would be for those autopay debits.
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JoMoney
Posts: 16260
Joined: Tue Jul 23, 2013 5:31 am

Re: Place to hold money and earn interest

Post by JoMoney »

justsomeguy2018 wrote: Mon Oct 10, 2022 12:02 pm
JoMoney wrote: Sun Oct 09, 2022 10:31 pm
justsomeguy2018 wrote: Sun Oct 09, 2022 5:29 pm...
Question - I noticed I am unable to change my core holding with the CMA. The core is FDIC core paying 1.57%. Can I buy something like FZRXX and will the funds in there be used for debit card transactions/check cashing, or does it need to stay in the Core account paying 1.57%?
With the CMA you can't change the core position to anything else, but you can buy other Fidelity Money Market funds, and if/when the core position is at a zero balance it will automatically liquidate other money market funds for ATM, BillPay, other withdrawals or security purchases. It will not liquidate any non-money market securities/funds you hold in the account. Just make sure to review your "Available balance" on the Cash management page to ensure the amount that's "available" for immediate withdrawal, which should include the other money market funds you hold.

If you opened a regular Fidelity brokerage account (not CMA account), you have a couple other options for Government money market funds that can be set as the default core fund. You can also add atm/debit card, bill pay, check writing, and all the other CMA features to the regular brokerage account, but unless your account meets certain criteria, the broker account doesn't refund ATM fees (but there are a lot of fee-free ATMs out there, pretty much all the ATM's listed as free on PNC Bank's ATM network)
JoMoney, just curious, I just spoke with a Fidelity rep to get some more details on the CMA account, and they told me that the automatic liquidation of other money market funds for paying credit card bills, direct debit, ATM, etc. doesn't happen (except in very certain circumstances). That the money needs to be in the Core FDIC insured sweep or the transaction won't happen and will show up as a bounced check.

Now you would think I should trust the words of the Fidelity rep over a random Internet stranger but it wouldn't be the first time I've gotten some incorrect information from them.

Do you have any more info/experience with this, obviously I cannot afford to "test it" on an automatic credit card monthly payoff since if the debit doesn't happen I would incur a late charge, interest expense, and credit score damage.

I use my CCs for cash back and pay them off in full each month, the primary transfers from this CMA account would be for those autopay debits.
You can "test" it yourself by transferring your FDIC sweep balance to a money market fund, going to your accounts "Cash Management" section and seeing that the "available" amount includes the amounts in your money market funds, then going to an ATM machine and withdrawing cash.
FWIW, I've accidentally done an ACH "pull" to pay a credit card bill when money wasn't available. I got a notification that it failed, and that's all that happened. I resubmitted the ACH "pull" payment with the credit card after the money was available (it was before payment was due), and that was the end of it... No "credit score damage", late charge (it wasn't late), nor interest charge... But I manually pay my bills (usually early) rather than allowing the credit card to automatically draft whatever they believe the balance is.
I'll see if I can find an online reference on Fidelity's website that explains how the drafting of money market accounts works in the CMA.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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