5% Interest in Checking | Fidelity Cash Management Explained

[@wisdommelody9]

Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.

[@Mongarnsamuel]

People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.

[@Jamesdave-g6m]

Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.

[@Beckylouis-c4c]

I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!

[@Jamesdave-g6m]

My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.

[@Beckylouis-c4c]

Just ran an online search on her name and came across her websiite; pretty well educated. thank you for sharing.

[@Fred2-123]

This video came up randomly on youtube. GREAT INFORMATION. I already had a CMA & investment account at Fido, but this was new information to me. I opened up a new brokerage account dedicated to the core MMF (SPAXX paying 5.00%) and linked the CMA to pull from it. All done online, less than 30 minutes to set up. I've had $3500 sitting in the CMA earning 2.72%. Transferred $3000 to the new brokerage account, almost doubling my rate. BTW, the minimum auto-transfer is $250.

[@nickdoyle-achievefinancial2464]

Glad you found it useful and were able to quickly boost the yield on your cash :)! Thanks for the feedback, I appreciate it!

[@someparts]

Fixed income videos are vastly under represented on KZbin

[@bctsteve]

Thank you so much for making this video! No one is talking about using the CMA in this way. I have had Fidelity for years, but after watching this video I opened the CMA and ordered the ATM cards and checks. I love that I will get 4.84% on my checking account and I can use any ATM in the US for free. I love being able to call Fidelity late at night when I have time to work on my finances. The fidelity reps are so professional and well-educated. So much better than the poor customer service I receive in almost other transaction I experience.

[@nickdoyle-achievefinancial2464]

You're welcome Steve, I hope more people can benefit from this setup! I have also had very good experiences with Fidelity.

[@grahamstefaan]

Ditto. BOA was insufferable.

[@markLikesSports]

This is an excellent video! Very clear and concise and covers some issues other write-ups and videos don't cover. Great job!

[@nickdoyle-achievefinancial2464]

Glad it was helpful! I appreciate your feedback :)

[@msspirituallibra444]

I just opened up a CMA with Fidelity!!

[@nickdoyle-achievefinancial2464]

That's great! :)

[@majorgear1021]

um. yay?

[@inquisitvem6723]

How does it compare to Schwab? I am also looking at ATM fees when traveling

[@theresa78201]

I think this could be especially useful for couples. You can make the most of your money without tracking every purchase made by your spouse and yourself.

[@nickdoyle-achievefinancial2464]

Agree, my wife and I are very happy we made the switch!

[@d_2_0_2_4]

Great video! Opening a CMA account soon.

[@nickdoyle-achievefinancial2464]

Cheers!

[@realwarriorscholar]

2.72% as of March 2024. You could use your Fidelity brokerage account to earn 4.+% interest..

[@nickdoyle-achievefinancial2464]

Yes, combining with the brokerage is what I was primarily discussing. I think it's around 4.9% with some of the money market funds.

[@nickdoyle-achievefinancial2464]

Thanks for watching everyone. The rate currently available for MM funds is closer to 5%. As of June 15, 2024 Fidelity will allow SPAXX as the core in the CMA making it even simpler! Here are some follow-up videos: How to Choose the Best Money Market Fund? kzbin.info/www/bejne/fauXi5hsnbWJd9E T-Bills: This Will Shock You [Worst Investment?]: kzbin.info/www/bejne/roaxpIyeoJiMr7c Asset Allocation Explained [Modern Portfolio Theory]: kzbin.info/www/bejne/h4XKp4qGds6bf8U Three-Fund Portfolio [The BEST Portfolio!]: kzbin.info/www/bejne/iGmUi2Cll8p1adU Six Retirement Withdrawal Strategies Compared: kzbin.info/www/bejne/qKjIaXaXdrqBiJI

[@reginaldmarselus4742]

I have come to Fidelity from TD Ameritrade. When TD Ameritrade was bought by Schwab, we were informed that all accounts would become Schwab accounts and we would then be Schwab customers. I did not want to be a Schwab customer. So, I opened an account with Fidelity. I have transferred my trading account and now am looking to see what Fidelity offers its customers. So, this CMA looks interesting to me. Thank you.

[@nickdoyle-achievefinancial2464]

You're welcome, I'm glad you found it useful. I'm curious, why don't you like Schwab?

[@BukkaLevy]

2.6% today. It’s been going down all year.

[@danielpatrick368]

Just saw that. But univested funds are at 4.9. wanted to open a new Fidelity investing account I was thinking about doing my checking through them too. But might just keep my sofi

[@peterparker2068]

I think end of June the core position will be MMF around 5% currently

[@vcash1112]

I prefer Spaxxx !

[@tikimac]

Hi Nick. Great video sir. You mentioned that Fidelity does not do fractional reserve lending (a super shady practice that big banks do) with money kept in a CMA. Is that money invested in products like treasuries, CDs, notes and such? Similar to how a money market mutual fund operates?

[@SaiKiranT-s6b]

Could you please make another video explaining the steps in detail in the Fidelity UI? It would help better.

[@garymoore3446]

I've had my CMA with fidelity for several years now. Best move I ever made...love it

[@nickdoyle-achievefinancial2464]

It's a great setup! I was with LMCU for a while for 3% interest on checking, but I think this CMA account is much better. I wish I switched earlier!

[@Native722]

If I have money in my brokerage account, do I automatically have a CMA?

[@theresa78201]

@@Native722 I would check my account, see where the brokerage stores any cash not yet invested, and then research that vehicle to see exactly what it is.

[@racerx2580]

​@@Native722 No this is separate.

[@aracelireyes999]

​@Native722 No, you actually have to open this type of account, but it is easy to do on your phone app.

[@vladimirkovalevskyi9255]

Vangard also paying approximately 5% on uninvested cash.

[@Vladyyy]

This video looks like it was shot in 2007. Nice of you to mention that offer and solid breakdown of the T-Bill Ladder vs a checking account 👌🏾

[@nickdoyle-achievefinancial2464]

Heh, I made a mistake with the lighting. Glad you liked the breakdown!

[@Vladyyy]

@@nickdoyle-achievefinancial2464 It wasn't really even the lighting that made me think that (although of course it plays a role). But the incredibly plan textured background and nothing else + the shirt, along with how you delivered the info is what did it. If not for the quality camera (and me doubling checking the upload date) I definitely would have thought this was from years ago. Absolutely nothing against you, but that just REALLY stuck out to me. Nevertheless, many thanks to you for providing us all with such important information. What you’re doing is super helpful 🙏🏾

[@nickdoyle-achievefinancial2464]

@@Vladyyy thanks for the detailed feedback Vlad! I’ve been wanting to create a set but haven’t done it yet. I should stop being lazy and do it 😀I’ll consider the other feedback as well!

[@Vladyyy]

@@nickdoyle-achievefinancial2464 No problem man! And go for it (the set)!! Cheers! 🙌🏾

[@salvatoretavormina5656]

Great video. Thanks for the info about the bonus offer! BTW, if you are going to leave the CMA account empty and rely on the regular brokerage account for overdraft protection, you don't need to open the CMA account because you can get a debit card and write checks directly against your regular brokerage account. I'm planning to set up a CMA account without overdraft protection because I've been the victim of both check and debit card fraud and I want to limit any possible losses (even temporary ones) from fraud to whatever is in my CMA account (max of enough money to cover 1 month's expenses.)

[@nickdoyle-achievefinancial2464]

You're welcome, glad you liked it! Good points about the CMA not being entirely necessary, but it does offer some extra features (atm fees reimbursed, cash manager, option for FDIC protection on some of the cash, etc). However, some people may not use these features. That makes sense to limit your exposure to fraud. This is why I have a completely separate brokerage & CMA for this setup :)

[@sidehustletoceo]

I've had my Fidelity CMA for many years and never really knew what it was for. Lol.

[@nickdoyle-achievefinancial2464]

lol, glad you found the video useful. Thanks for watching!

[@CNFat]

Thank you for this video, Nick. Question: Now that you can make SPAXX (4.95% yield) as your CMA core, can you simplify and not need the brokerage anymore?

[@nickdoyle-achievefinancial2464]

You're welcome! Yes, the main reason I had the brokerage was so deposits would go directly into a MM fund. It's great they added the feature to use SPAXX as the core, much simpler!

[@CNFat]

@@nickdoyle-achievefinancial2464 Thank you for confirming. Fidelity CMA has most of the feautures of a conventional checking account but with HYSA-level returns

[@Draega007]

Would this strategy be better than a high yield savings account? I recently opened an Ally high yield savings account and was wondering if this would be a better option instead of Ally. Also the 7 day yield right now on FDLXX is 4.93%, is that before or after the expense ratio?

[@nickdoyle-achievefinancial2464]

I personally prefer this setup to high yield savings. The 7-day yield is after the expense ratio. Rates have gone up since I made the video and are now close to 5% :)

[@danielsweeney8164]

Explained clearly

[@MonicaMovieStar]

Dear Nick, would you please make the comparison video (that you mentioned in this video) please? Thank you.

[@nickdoyle-achievefinancial2464]

Thanks for letting me know Monica. I intend to make the video :)

[@nickdoyle-achievefinancial2464]

Hi Monica, my video comparing the funds is here: kzbin.info/www/bejne/fauXi5hsnbWJd9E. Hope it helps!

[@MonicaMovieStar]

@@nickdoyle-achievefinancial2464 Thank you!!

[@mattfriend7868]

FDLXX is not currently designated as a core position unfortunately. Did this change? If so, what happened? What is the next best alternative to try to achieve this type of setup?

[@nickdoyle-achievefinancial2464]

I'm using FZFXX as the core in my brokerage account. I manually buy FDLXX with it once every couple weeks as newer money comes in, but that's not required if you are comfortable with FZFXX. I have another video with tips on comparing money market funds if it helps: kzbin.info/www/bejne/fauXi5hsnbWJd9E

[@mattfriend7868]

@@nickdoyle-achievefinancial2464 Thanks! I did have one other question: Like you, I too would like to have a dedicated CMA & FZFXX brokerage account for this banking solution setup that is separate from my investment portfolio. So for your investment portfolio you're saying you have a totally separate account with an entirely different login? I was just wondering if you'd be able to clarify and/or elaborate on that a little more for me? I wasn't sure if I was understanding you correctly.

[@justinhennessy6316]

I got the CMA and a brokerage. I'm still a little confused on how they work together. Also I'm curious how much I wanna do in FDLXX vs the sweep position. Right now I'm doing about 75% in sweep and 25% in fdlxx

[@johnestan]

Thanks for the great video. I'm testing a zero balance cma overdraft protected by a separate brokerage account. When paying bills is there any reason to use one or the other: the brokerage directly rather than the cma with overdraft?

[@nickdoyle-achievefinancial2464]

You're welcome! I think the main reasons are: CMA reimburses ATM fees whereas regular brokerage requires a high balance to get this, and CMA has the option of FDIC sweep. You may not need/want either.

[@BGL333]

Did you have to call Fidelity to have a "dedicated CMA and brokerage account for this setup" or were you able to create it yourself online? I'm trying to figure out how to do it.

[@nickdoyle-achievefinancial2464]

No, I was able to open all the accounts via the website. I'm sure fidelity can help if the website is confusing.

[@DustinKingen]

I prefer the 1 month's expenses in CMA with overdraft protection to a separate brokerage invested in MM. Another downside to T-Bill ladder is the automatic rollover. Fidelity will put in the next T-Bill order before cashing out of the existing position. This may lead to a situation where there is money locked up in the new transaction and that cash won't be available. That is why some Bogleheads recommends keeping T-Bills in a separate account.

[@nickdoyle-achievefinancial2464]

Yea, I like using the brokerage for MM & keeping a little in the FDIC sweep. Good points about the money getting locked up! That could be an issue with rolling t-bills, plus you cant auto-roll some t-bill maturities. I personally don't see the allure to dealing with the headache. Maybe if I had 200k in cash it might start to get worth it, but not with a 6 month emergency fund.

[@SweetPotata10]

Would you move your HYSA to this? HYSA is currently still close to 5%, so why would you chose this instead of HYSA?

[@kipcasper4278]

Great video as always Nick! Keep up the great work!

[@nickdoyle-achievefinancial2464]

Thanks Kip!

[@linkzinvest]

I have a similar setup. I use the fidelity CMA as a petty cash fund. It's also the account I use for international travel.

[@nickdoyle-achievefinancial2464]

Nice, it's very convenient for travel! 😀

[@begsbegsbegs]

Raisin has a list of banks offering 5.15 - 5.17

[@nickdoyle-achievefinancial2464]

Nice, that's a good rate. This Fidelity setup from the video is now yielding around 4.85 but I expect it to go above 5 given the recent rate hike.

[@begsbegsbegs]

@@nickdoyle-achievefinancial2464 Raisin at 5.25 now

[@peanutman243]

Thank you for the info

[@nickdoyle-achievefinancial2464]

You're welcome!

[@Phantom.1]

Good video!

[@nickdoyle-achievefinancial2464]

Thanks!

[@rrcmha]

Nick - At the onset, thank you very much for this informative video, I just have one question - In the CMA account you mentioned that the if you don't have enough funds in the Core position, money will be automatically withdrawn for a Money Market Fund in the CMA account, is there any documentation in Fidelity's website to support this. Thank you much!!

[@nickdoyle-achievefinancial2464]

I am unable to find it quickly on Fidelity's site, but their reddit has a post about it: www.reddit.com/r/fidelityinvestments/comments/112pvrb/autoliquidation_in_cma_accounts/

[@Fred2-123]

Yes, they document it. I recently verified that it works. On an automatic overdraft transfer they pulled all the money from the SPAXX core and then the rest from FDLXX.

[@Native722]

How about wealth front and betterment? So you change which fund your CMA account is in?

[@nickdoyle-achievefinancial2464]

I like that with CMA setup you don't have to move money in/out of the savings account with higher rate. Fidelity will auto-liquidate certain money market funds when you pay bills from the account. As far as I know this is unique to Fidelity and others like Schwab, Vanguard, etc don't have this option. I use the CMA + Brokerage option, and change the default position in the brokerage. I don't hold much in the CMA, but rely on overdraft protection with brokerage. I hope this helps!

[@michaelgibek]

@@nickdoyle-achievefinancial2464 "Fidelity will auto-liquidate certain money market funds when you pay bills from the account." this is probably the lynchpin of this whole setup. Question: when you get a direct deposit or any deposits into CMA, can you set it up to automatically go into MM or does it default to the cash sweep? Would be great to automate the front as well as the back end. Basically turns a money market into a checking account.

[@nickdoyle-achievefinancial2464]

@@michaelgibek Using the brokerage + cma setup I described, your deposits to the brokerage can automatically go into certain fidelity MM funds. Withdraws from CMA can use brokerage overdraft + MM liquidation. This is the setup I use, and does ~turn MM into checking. The only part that I wish was a little better is the fund I like the most cant be the core position in the brokerage account. I have to use FZFXX as core, which IMO is good enough. Every couple weeks, I just transfer FZFXX to FDLXX (my preferred fund), but it isn't really necessary.

[@michaelgibek]

@@nickdoyle-achievefinancial2464 I explored the settings a little more today. I saw the self-funded overdraft feature in the CMA cash manager and turned that feature on. I also saw other options, something about a min and max level of cash but I left that blank. Question: does the MM-as-a-checking setup really require both the CMA and brokerage. Consider this: If you point deposits (i.e. wages, checks, transfers) into the CMA, those funds default to bank sweep (not the core CMA position). You need to manually buy MMs in the CMA or manually move the funds from the CMA to the brokerage (where they will then fall into the brokerage core position). Instead of doing this, why not just point all deposits at the brokerage, that way the core MM position in the brokerage will be purchased for you automatically. Seems like pointing deposits at the brokerage removes the manual task of buying MM. Now, if you do that - send all deposits to the brokerage -- the CMA will stay at zero because it is not getting any funding automatically. The question is, does it matter if you point debits (i.e. mortgage payments, bill payments, CC payments) are pointed at the CMA or the brokerage? If a debit is pointed at the brokerage, it will hit the account and liquidate the broker core MM position to cover. If the debit is pointed at the CMA, it will look for funds in the bank sweep (zero), find none, then look in the CMA core position (zero), find none, and then travel over to the brokerage, via overdraft, to check the core position in the brokerage, where it will find the money from the deposits discussed above. Either way -- directly or indirectly (via over-draft) - the debit will find the funds in the brokerage core MM position. Is there any difference between these setups? I assume not. As for the CMA, I’m not sure what is the significance of having the feature of a “core position” in that account to begin with. If bank sweep is the default cash bucket in the CMA, what does it mean for the CMA to have a “core position” set to SPAXX or FZFXX. The money doesn't go there automatically anyway. Maybe I’m misunderstanding the concept of core position. I thought it was supposed to describe a default setting for where otherwise unallocated cash is held. If the CMA defaults cash to bank sweep, shouldn’t the core position be “bank sweep” instead of “FZFXX or SPAXX”? I assume it has something to do with the min/max feature (i.e. if you set a $10k max, any deposited cash into the CMA above $10k will result in a FZFXX or SPAXX purchase in the CMA).

[@newdaysamepains]

I am planning on running a CMA as my checking and a regular brokerage as my savings. I plan to keep my core in my CMA as the FDIC and SPAXX in my savings. However, I plan to use my local credit union as my primary checking. Is this a good idea? I dont plan to keep much cash on me as I am fine with selling assets for cash.

[@nickdoyle-achievefinancial2464]

I think it's a reasonable plan. Especially if you're keeping enough cash in FDIC/NCUA vehicles to meet near-term cash flow needs. It all boils down to what you're comfortable with :)

[@asphaltandtacos]

That is a great plan! I think have a checking account with a credit union is a solid strategy.

[@thelastsurvivor11]

I have a CMA account and a brokerage account with Fidelity. I have some money invested in both the brokerage and CMA, but I also use it as a savings account with the uninvested money. Do I get the 4.2% yield just parking my uninvested money there or do I have to do something else?

[@nickdoyle-achievefinancial2464]

Hi Jose, If it's in the CMA sweep, it's just getting 2.6% right now. If you want the higher return, you would have to put it in one of the money market funds.

[@impetuosity3381]

Nice Video. Does Schwab offer anything competetive? I hate to move over all my banking just for my checking account.

[@nickdoyle-achievefinancial2464]

Thanks! My understanding when I researched Schwab is they are good as a one-stop-shop, with a pro that they have an actual bank for their checking accounts instead of partners like Fidelity. However, their rates on their checking are lower and I don't believe they have the feature to auto-liquidate money market funds like fidelity, so it requires some manual effort to get similar return on cash.

[@Native722]

​@@nickdoyle-achievefinancial2464 Not all brokerage offer CMA like Schwab

[@Kelpe1925]

Sorry, Im new to all this. Can someone explain the CMA core position? First your saying the sweep of the core CMA is FDIC insured, but the money in the core position of the account is a MM account that is not FDIC insured and thats how you make the 4+%. So, if none of the money is in the sweep that is insured, why even mention that and a posibility of $1M in protection? Is the sweep and the core position two different accounts?

[@conrad_t]

It seems the money market fund fidelity directs people to its SPAXX. This a government money market fund but 60% of it is in repurchase agreements. Do you consider these instruments too risky for your savings account/emergency fund? I’m considering switching to the treasury only fund you mentioned here.

[@nickdoyle-achievefinancial2464]

While I don't think the repo agreements are that risky, FDLXX delivers a comparable return without them. FDLXX is generally more efficient as it relates to state taxes. Unfortunately, I wasn't able to find a way to change my default core position to FDLXX. I had read about some people contacting fidelity & getting it change, but it didn't work for me. My core is FZFXX & I occasionally use surplus to buy FDLXX. I find it to be good enough 😀

[@Biosynthnut]

So is this like savings account? I'm alitte fuzzy on the terminology here.

[@nickdoyle-achievefinancial2464]

It's a fairly unique account, but I view it more like a checking account. I pay all my bills from it.

[@CRVgarage]

So, if you just have a regular brokerage Fidelity account, you will not receive any interest on uninvested funds??

[@nickdoyle-achievefinancial2464]

You will. Typically regular brokerage have money market funds for the core position. You just wouldn't have the extra features of CMA which make it like a checking account. Some of them are on regular brokerage accounts, but not all.

[@Unknown-hu4gf]

Also, what do you think about Fidelity's Bloom account?

[@nickdoyle-achievefinancial2464]

I hadn't heard about it until you mentioned it. It looks like it uses two brokerage accounts, instead of the CMA+brokerage setup I mentioned in the video. This probably means it has fewer features since CMA has extra features. However, it looks like it automates/promotes some aspects of saving/spending and provides bonuses. It's an interesting idea, maybe I'll make a video about it.

[@Unknown-hu4gf]

@@nickdoyle-achievefinancial2464 It looks like it pays about .5% points in interest more. I think it's geared more for younger investors who are new to this stuff. Thanks for your consideration and replies!

[@larsvargas]

1:49 I never heard you explain how you're getting 4.2% when it's 2.34%, the 7 day yield is very confusing to me.

[@nickdoyle-achievefinancial2464]

It's by putting the money into one of Fidelity's money market funds (SPAXX, FDLXX). At 3:32 I discussed how it gets auto-liquidated to pay bills and at 7:59 how it can be paired with a brokerage account to automatically put deposits into the money market fund. I hope this helps!

[@lagarde2011]

Good information. I guess the treasury-only MM fund would be subject to state and local taxes, unlike T-bills? I doubt that the difference would matter much even in high-tax states like NY or CA.

[@nickdoyle-achievefinancial2464]

Thanks! I think the treasury-only fund FDLXX is mostly exempt from state taxes, since it's nearly all government bonds & not a very high percentage of repurchase agreements. I discussed repos in my video comparing the money market funds if you want to learn more about them kzbin.info/www/bejne/fauXi5hsnbWJd9E. The following is my understanding, you can confirm with more research or consulting a tax professional. To get the state tax or these mutual funds, you would need to use your broker's breakdown of % of income attributable to US Gov securities. You can find it through this link: www.fidelity.com/tax-information/fidelity-mutual-fund-tax-information. Specifically, for 2022: www.fidelity.com/bin-public/060_www_fidelity_com/documents/taxes/Revised-GSE-(SA-AA)-Letter.pdf. For FDLXX it was 93.63% and you can use this to calculate amount of dividends from treasuries to enter in your tax software. If you have multiple funds, you would need to do this exercise for each (building a table to calculate the total). I hope this helps!

[@TonyDL]

If I use FDLXX in my CMA for higher interst and I deplete some FDLXX via expenses, how to I replenish this without having to do it manually? It seems that if I deposit money to the CMA, it will automatically go to FDIC sweep rather than my FDLXX. Any way to automate this so I can maximize returns? Thanks so much for the very informative and practical video!!

[@nickdoyle-achievefinancial2464]

I use a separate brokerage account (non-CMA). It can be setup so CMA uses this brokerage as overdraft protection (using the money manager tool). Deposits into the brokerage can go directly into an MM fund as core position. Unfortunately, you cannot use FDLXX as the core position. However, you can use FZFXX as the default and periodically transfer it to FDLXX as you wish. Hope this helps!

[@TonyDL]

@@nickdoyle-achievefinancial2464 I don't want to use my brokerage account for overdraft protection because I want to keep investments separate. So focusing solely on the CMA, is there any way to designate FDLXX as the core position there so that when I deposit cash I don't have to manually buy into it? thanks!

[@Fred2-123]

@@TonyDL Just open a new brokerage account and don't use it for anything other than the core SPAXX/FZFXX. If they get stinky about not having any investments in the account, buy 1 share of SPY. It only takes a few minutes to open a new account.

[@jeffwarner8221]

Does vanguard have anything equivalent to this setup? / Can you set your sweep to be funds that aren't fidelity?

[@lamontmillington3063]

Vanguard does, and the fee is cheaper as well. But it requires more hands-on movement, whereas Fidelity handles all that for you for the slightly higher fee.

[@nickdoyle-achievefinancial2464]

+1 to Lamont's comment. Vanguard's offering is new (in pilot) and looks attractive: investor.vanguard.com/accounts-plans/vanguard-cash-plus-account. I like the extra features of Fidelity, like auto-liquidation of money markets, debit card atm fee reimbursement worldwide, free checks, etc. I'm willing to pay the higher fee for it. Maybe Vanguard will add more features, but they seem to take the opinion you don't need checks or debit card. I've found fidelity's debit card one of the best ways to get cash when I travel internationally. At most I pay a 1% currency conversion fee, but can go to nearly any atm in the world and get the local currency in seconds.

[@tolyvelichko8375]

What if I opened a CMA and deposited between 1-3k USD and left it to sit there while building interested and allowing it to be reinvested on weekly basis? These funds I wouldn’t plan to take out for purchases and paying bills. Just allowing the money to grow and grow….

[@faceman55]

I’m looking for the same answer . Anymore ?

[@leevonallenjr9762]

I heard by the representative that they hold checks long it deposited that's not good

[@nickdoyle-achievefinancial2464]

That's interesting. I've deposited some checks (even one for 30k when I sold a car) through the mobile app, and didn't see a delay longer than what I saw at other banks.

[@leevonallenjr9762]

@@nickdoyle-achievefinancial2464 is it more than 3 days

[@nickdoyle-achievefinancial2464]

I don't remember it being more than that.

[@rsb3006]

Thanks for the video! I signed up for the CMA account (unfortunately) shortly after signing up for a credit union account. Wish I had found the video earlier as I already have a Fidelity brokerage account. Is the idea to use the brokerage (FZFXX or FDLXX) as an emergency overdraft protection, or to keep a max amount of money in the MM fund and overdraft regularly? My question is: does over drafting from a brokerage MM fund create a tax nightmare in the spring (a bunch of line items), or is it simple? If it makes for a complicated situation I will keep a good chunk of sweep dollars in CMA and the rest that I don't think I'll use in the brokerage MM. If the tax situation is easy I will keep 100% in the brokerage MM and overdraft whenever needed. Thanks!

[@nickdoyle-achievefinancial2464]

You're welcome, glad you found it at least (even if a little late). The reason I use the regular brokerage as the CMA overdraft protection, is so my deposits go straight into an MM fund instead of the CMA cash account. An alternative would just be buying MM funds in the CMA when receiving deposits or periodically. It will be another month before I can answer how the tax implications worked for me. I expect the MM funds will be taxed like an interest bearing savings account, where you just get a form with the interest paid for the year. The reason I think this is because the share price is targeted to be fixed at $1. I could be wrong, but this is my expectation. I can confirm when I get my tax forms for last year.

[@alexanderbelluccia599]

@@nickdoyle-achievefinancial2464 Hi Nick! This video was extremely informative Thanks! I am in the process of getting my CMA and Brokerage set up and have been trying to understand the tax implications as well, did they end up sending you a form with the interest paid to report when filing your taxes? Either way, I established a CMA (FDIC Sweep Core) with overdraft protection from my Individual Brokerage ( FZFXX Core). Out of curiosity what MMFs so you hold in your CMA if any? or do you keep those additional securities beyond your brokerage core in your brokerage account? Right now my CMA 75% of account balance is in Cash(FDIC) and 25% is in SPAXX. In the Brokerage 75% of account balance is in Cash (FZFXX Core) and 25% is in FDLXX. Generally, what percentage of your brokerage account is in the core position vs. the total percentage of other MMFs you've picked up like FDLXX. Not looking for investment advice just curious about this ratio and whether or not you think its necessary to hold any MMFs in the CMA account if i intend to use it solely as a checking/spending account, with overdraft protection?

[@garymoore3446]

I like spaxx

[@nickdoyle-achievefinancial2464]

Also a good option! :)

[@Objectional_Opinion]

Please. I want to open a Fidelity account to transfer money into from my bank so I can buy stocks. I want to open a Fidelity Checking/Savings account if you would, and use that dollar value sitting in that account to buy a stock of my choice. What account do I get? Please.

[@awakeninvestment]

Would I be able to withdraw cash from atm? Will I be able to transfer to an external account to withdraw cash?

[@nickdoyle-achievefinancial2464]

Yes, first it would come from your FDIC sweep balance, then from auto-liquidation of money market, then brokerage overdraft (if enabled). I keep my CMA balance at 0 and use the brokerage overdraft (auto-liquidation of money market funds in my brokerage). I am able to withdraw cash, pay bills, transfer, etc. It has worked seamlessly so far. Hope this helps!

[@awakeninvestment]

@@nickdoyle-achievefinancial2464 is it possible to keep money in the spending account to withdraw immediately and the deposit overflow or available cash into the money market?

[@nickdoyle-achievefinancial2464]

@@awakeninvestment Yes, it's a fairly flexible setup. You can keep some in the FDIC sweep account & put the rest in money market.

[@awakeninvestment]

@@nickdoyle-achievefinancial2464 thanks

[@michaelgibek]

@@nickdoyle-achievefinancial2464 this is amazing if true. great setup for high rolling balance checkings i.e. if you have 10k-50k balance in checking earning nothing for days between inflows and outflows. Great way to optimize cash

[@jeremaester1299]

Is this available for businesses or just personal?

[@nickdoyle-achievefinancial2464]

Sorry, I don't know if it's available for businesses.

[@d6487]

Since SPAXX and FZFXX charges a .42% expense ratio. If i have no money left in the core account. Will they still charge this .42% expense ratio each month regardless of whether i have money sitting there or not?

[@nickdoyle-achievefinancial2464]

No, the expense just reduces the return yielded by the funds in which you're invested.

[@ewindeed1210]

Yield is calculated after expense

[@JasonBuckman]

0.42% of $0 is $0.

[@joemiller2035]

Why keep any balance at all in the core sweep account? If the system will automatically pull cash to pay bills, checks, and ATM withdrawals from the money market that is inside the CMA account and the MM has a higher yield than the core sweep? Is there some delay when paying bills from the MM? Also, if setting up a direct deposit into the CMA, will it automatically go into the core sweep, or can it be set up to go into the MM inside the CMA? Many thanks. You know a lot more than the Fidelity reps I've spoken to

[@nickdoyle-achievefinancial2464]

One risk is the possibility that money markets can freeze withdrawals or temporarily impose a fee on withdrawal. If keeping some in CMA sweep, you can mitigate this risk and get FDIC insurance. I have not experienced any delays in this system of auto-liquidating MM funds. The way to get direct deposit to automatically go into an MM fund is to use the CMA + Brokerage option I mentioned, and setup overdraft protection on the CMA to use the brokerage. You can direct deposit to the brokerage & your default core position in brokerage can be one of the MM funds. Bills paid from CMA will auto-liquidate the MM in brokerage (if you setup this overdraft protection). Hope this helps/makes sense!

[@joemiller2035]

@@nickdoyle-achievefinancial2464 Thank you for your reply. Very good point regarding the possible freezing of MM withdrawals, particularly in times of economic stress. However, why direct deposit into the brokerage MM at all? Can't you just direct deposit into the CMA's MM and use this as a self-contained banking setup with the CMA core at $0 and the rest of the balance in CMA's MM where you would direct deposit your paychecks? You said that you didn't experience any delays in the MM auto-liquidating feature, does that include ATM withdrawals?

[@nickdoyle-achievefinancial2464]

@@joemiller2035 Hi Joe, the reason I like to use a separate brokerage for the MM fund is so my deposits to that brokerage automatically go into the MM fund. My money goes into the brokerage and out of the CMA. You could just use the CMA, but deposits would go into the FDIC fund and need to be transferred into the MM fund. Hope this helps!

[@majorgear1021]

@@nickdoyle-achievefinancial2464 So do you keep any funds in the CMA account? or do new funds go into your brokerage , and money is only temporarily in the CMA when overdraft protection is activated to pay a bill (ach or check) ?

[@harry7587]

Curious to know your experiences about the CMA - do you get a clear view of all the trasactions (atm withdrawl/ACH/bill pay) like a regular bank would do? I don't have a CMA yet but my current experiences with Fidelity brokerage account is that their notification systems aren't really good, I don't think I get any activity notifications (e.g. currently I use the fidelity brokerage account which does have the bank account/rout number to pay for my credit card bill, and i don't receive any notifications), thus curious if CMA would make a difference, and can notify me whenever there is an activity.

[@nickdoyle-achievefinancial2464]

Hi Harry, It's definitely not equivalent to a regular bank, but I've had a good experience & notifications have been reasonable for me. It seems Fidelity is sending many notifications overnight for withdrawals or deposits. I think it's possible to change alert settings, so maybe you could enable it on your brokerage account? I don't think I did anything specifically to turn them on for my CMA, but I am getting notifications for it.

[@Unknown-hu4gf]

How do you change your core position to the MM instead of the sweep on your CMA?

[@nickdoyle-achievefinancial2464]

You cannot change that in the CMA account. You can pair it with a brokerage account, used as overdraft protection, if you want deposits to automatically go into an MM fund that can be the core position.

[@aaronmiwiify]

I just opened a fidelity account.. Its complete trash compared to charles schwab. Im still trying to figure out how to change the core position.

[@nickdoyle-achievefinancial2464]

The interface does leave a little bit to be desired. Hope you figured it out!

[@aaronmiwiify]

I revisited the account and was able to change the core position. I'm probably changing from charles schwab now. Thanks for the info!

[@johnjoe_247]

YOU NEED light homey !

[@nickdoyle-achievefinancial2464]

Thanks for the feedback, I will fix it!

[@Jean-ni6of]

Became too complicated. Not helpful to me.

[@nickdoyle-achievefinancial2464]

Sorry it wasn't helpful. This setup, combining CMA & brokerage, is not simple.

[@Zanzabar5]

If you buy physical gold you get an average annual appreciation of 8%.

[@nickdoyle-achievefinancial2464]

That is possible, but not guaranteed.

[@Maloha486]

Looks like they're now doing 2.60% as of May 8th, 2023

[@nickdoyle-achievefinancial2464]

Nice, that's a good improvement for the CMA rate.