Starting June 15, 2024, Fidelity Cash Management account will offer an elective option to have your default sweep account be the high-yield SPAXX money market fund (4.95% yield at time of this writing). Until now, their default deposit sweep is an FDIC account with an interest rate which is not highly competitive (2.72% at time of this writing). Â
There were always work-arounds, but now it’ll be simple to have your Fidelity Cash Management Account act like an ordinary checking account and also get top-yield interest rates. The Fidelity CMA has long offered traditional banking features like ACH routing and account numbers, Billpay, mobile check deposit, physical checks, and ATM cards. A lot of travelers like the CMA account due to its unlimited worldwide ATM fee reimbursements.
Hat tip to MyMoneyBlog
everyone show are going to use Fidelity CMA should read it: https://www.reddit.com/r/fidelityinvestments/comments/1d2pqj5/cash_management_account_warning_from_former_bank/
An important read for those who carry the Fidelity debit card (or any debit card for that matter) in their wallet. The Fidelity app has the ability to lock/unlock the debit card so this provides some protection. But debit card fraud protections are much less than that of credit cards. Most banks don’t offer ATM only cards, as they want to keep the debit purchase option open for more fees.
How do you change this to SPAXX in an existing cash management account?
Edit: I couldn’t follow the instructions linked here https://www.doctorofcredit.com/fidelity-cash-management-account-adds-high-yield-sweep-option/#comment-1861907 but I was able to pull up the chat/support on the desktop site, say “change my core position”, and self-service change it via some questions in the chat. Easy!
Once you choose SPAXX as a core position of Cash Management Account, what is the pros and cons of keeping funds in CMA vs keeping the same funds in Bloom Saving or Bloom Spend, other than ability to access the funds via debit card for CMA?
Bloom is shutting down so it’s a moot point.
Does anyone know how to get Empower to have this account categorized under “Cash” and not “Investment”?
I’m using this account essentially as a checking account so I’d like the dollars in it to be categorized as cash and not as invested funds.
On the Fidelity app, click the account, then click the 3 dots in the top right corner, and then click edit account name and group. Change account name from investment.
I don’t think there’s a way to do it.
Too bad Fidelity is a fly-by-night Fintech, like Yotta. Note that if your Fidelity CMA Debit card has fraudulent transactions, you will not be compensated for them.
Fidelity outsources their banking features to PNC BaaS, who subcontracts to BMY Melon. Just like how Yotta outsources to Synapse BaaS, who then subcontracts to Evolve.
Secure your debit card.
Thanks for the tip! I just went ahead and locked my card 🙂
Harry Sit, The Finance Buff, is my all-time favorite personal finance blogger. He is all about giving practical advice.
Fly-by-night fintech? Not sure we are on the same planet. Can’t speak specifically to the CMA account but Fidelity is a well-respected private financial services firm.
not anymore
There is no way to verify if the claims are real or fake.
Not my lived experience. Fidelity went above and beyond my expectations in two debit card incidents over the years. One time the service rep was going through some form with me, paused, and asked “if I just gave you a goodwill credit right now for whatever you estimate this cost you, would that work for you?” and proceeded to post several hundred dollars to the account without any paperwork.
I know I’m privelaged to get various premium service lines, but Fidelity is not a fly-by-night Fintech. They are one of the largest and most established financial services companies on the planet.
considering moving from sofi to fidelity for cma. already have my main brokerage as fidelity. thoughts?
Pretty much should simplify and have it all in one house.
Sofi just partnered with Zelle in case you do use their service, while with fidelity you are still stuck with the old-school transfers.
I use Zelle with Fidelity by adding my Fidelity debit card in the Zelle app. The only thing I’ve found I can’t do is send/receive from someone else using Fidelity (or presumably any other financial company without direct Zelle integration). In other words, you can use Zelle with Fidelity as long as the other party is using a bank with native Zelle integration.
In the Zelle app, using a Fidelity debit card, when attempting to send to or request from a recipient similarly using Fidelity, it shows an error when entering their recipient info, before you can even specify how much you want to send to them:
“Unable to transfer with <name>
Unfortunately you can only send to this person if you or they have an account with a financial institution that offers Zelle to its customers. If you have a bank app with Zelle, try using that instead, or ask your bank about offering Zelle.”
It works fine to send to/request from another recipient who uses Zelle with their Bank of America account.
Good to know, thank you
Ryan Goldstein ! It looks like I need to keep my current bank account that integrates with Zelle although I switched my hub to Fidelity. I use Zelle to send and receive regularly and need my Zelle to work no matter what bank the other side uses…
I feel like there are very few people who use Zelle without a bank that natively supports it. Personally, I’d try to default to using Fidelity, then only if/when you get that message when trying to send or request, you can use your bank with native Zelle support. You can register for Zelle with a phone number and email address, so you could use, for example, your phone number with Fidelity and your email with your bank.
Thanks
Ryan Goldstein ! Good to know that bank can use an email instead of a phone number for Zelle. Several days ago when I tried to enroll in Zelle app with my Fidelity debit card, it asked for my email and phone number. After entering the phone number it said the number was already registered with another bank, so I gave up. It looks like I can try un-linking the phone number with the bank and use the number for Zelle app. Then re-enroll the bank with my email.
So for real, why does this matter?
You could have already done everything that the CMA account does with the Investment account, right?
Aren’t the functionally identical?
I only use the CMA account for moving money that I might need on a debit card but it almost always stays empty so that if my debit card is compromised no money gets lost.
CMA reimburses ATM fees for anyone, whereas for brokerage account you have to have $250k to get that feature.
CMA does not allow margin borrowing or options trading so besides the ATM fees, that is the difference.
Where is this elective option at? Am logged on and all I see is the 2.69% FDIC interest rate and see no elective option to change it.
From the ‘Positions’ tab, click on Cash and it should expand to reveal a green ‘Change Core Position’ button.
Alternatively, using the virtual assistant and asking how to change the core position should eventually get you to a list of your accounts where you can make the change.
Thanks
I think the reason people don’t see it is similar to a brokerage account, you need to actually have available cash that is in the default position. If not, it will not show the core option at all.
So how come Fidelity never notified me of this change? I have to learn about it on DoC’s site? 🙂
They did, but they only put it in the monthly statement which nobody reads, lol.
Someone in the Fido reddit noticed it at the bottom of their March statement.
Anybody knows if I can keep the high-yield SPAXX money market fund after leaving the U.S?
The question is: will Fidelity shut down all your accounts when they find out that you no longer reside in the U.S.? See: https://www.americansabroad.org/investments
Interesting…
Earlier this year Charles Schwab and Company, Fidelity Investment and T.Rowe Price announced that they would no longer allow Americans living overseas, even their own employees, to buy US based mutual funds. There are limited exceptions for 401k plans, but for all other accounts including IRAs and Brokerage accounts, whether self managed, with the company as the advisor or with an independent investment advisor, mutual fund purchases (including dividend re-investments) have come to a halt. The company’s are not forcing clients to sell the mutual funds (forcing a capital gain or loss) and are not for the most part forcing accounts to be closed, but they are limiting new purchases.
After I posted that comment, I learned from Fidelity’s website that they do not automatically shut down accounts of clients who move abroad; they only restrict further mutual fund purchases, as you indicated. So I apologize to all for my error. Be aware, though that many institutions and banks have been known to shut down such accounts. Cheers.
Which institutions and banks are known to shut down accounts when the account holder moves abroad? How do they find out the account holder is abroad? Do they send a check to the account holder’s abroad address if they shut down the account?