Why I'm Leaving My Bank for the Fidelity Cash Management Account

[@shawnjackson8026]

This video has caused me to move my checking account to Fidelity and I'm very happy with the results (way more interest!) so far. Much appreciated!

[@vijaysaiveerapaneni]

Update 12/16/2024. No foreign transaction fee on the debit card. Worldwide ATM fee reimbursement.

[@DB-xp9px]

in case anyone's wondering, in this cash management account, on the first market day of every month is when the interest posts and it accrues daily

[@chiquita683]

So no FDIC insurance? Better off buying 1-3 month treasuries. Better tax benefits

[@josh9231]

Rob Berger the great financial educator of our time. Picking up the slack that public education misses. 👍

[@bobbartholomew85364]

Yes... I have had a Fidelity Cash Management Account for years - Love it.

[@belladamma2345]

Can you explain if you have to pay taxes each year from the dividends and interest and how that works?

[@STF68]

Opened my Fidelity CMA about 3 years ago, before I retired. Nice to be able to move $ from HSA, 401k, Roth’s. Bill Pay works great too. Kept my Credit Union account for local access and backup. Thanks for spreading the news on this.

[@factionjaxon4119]

Thanks for the input. I have a Fidelity brokerage account only and the bulk of my money is also in a credit union. I was going to look into Fidelity's HSA but now I might do the CMA as well.

[@williammorgan5293]

Beware of the CMA. Fidelity instituted a 16 business day hold on funds deposited by check or EFT. These accounts aren't regulated by the bank regulations. They can pretty much do things like this with no warning.

[@brandonluckman1816]

@@williammorgan5293 I noticed that recently and moved to a Merrill CMA paired with a BOA checking account.

[@mcbrian]

I was looking at utilizing this account and decided to look it up on KZbin on a whim. Glad I did, thank you for making this video, it's nice to hear someone walk through it in detail and clarity.

[@TMiller-u9c]

I did this when I retired 3 years ago. It is great and customer service is always top-notch.

[@peterc302]

I have had the CMA for several years now but never knew about the SPAXX. Thanks so much for the information. Also I use the fidelity Visa card and have it linked to my CMA. It deposits 2% back on all purchases automatically into the account. Of course, it goes without saying, you pay the card off 100% every month ,but I find that cash back can add up nicely every month .

[@louiswelrod]

We started the move to a Fidelity CMA about a week ago for many of the reasons you listed. I did get some good information from this video about the pros and cons. Thanks for the video.

[@dr.leonardo6382]

Thanks for a most comprehensive explanation of the fidelity cash management account. I have been using this for years and find it as you said a very convenient and at the same time enjoying today's high interest rate environment without any restrictions of amounts or liquidity. I do use it as a checking account for certain more high-end purchases. The one feature customers need to know is that unlike a checking account at your local bank you will be able to see the amounts that were honored from the checking feature however you cannot see to whom they were made out. So, when using the S PAXX account as a checking account you need to keep a separate record of who the checks were made out to. What I do is make a copy of the check for reference later on.

[@davehallock3102]

I am able to see an image of the cancelled checks online in my CMA account. Is that what you are referring to? If you are referring to having the payee show up in the ledger than I don't know of any bank that does that but I don't keep up with the latest features.

[@SpookyEng1]

My bank has an image of the check in the ledger.

[@phoenixdeank]

I started using the Fidelity CMA at the beginning of the year. It is great. They just added the option to have your core position invested in SPAXX. It was originally only FDIC. Very easy to log into your account and switch between SPAXX or FDIC. My understanding is you can do this at any time. Thanks for the video Rob.👍

[@tamwilfred]

Not sure when they introduced Fidelity Bloom but their core position with any money sweep in was in SPAXX

[@johnsmith1953x]

DO they have inactivity fees? If so, how much for how long?

[@tamwilfred]

@@johnsmith1953x From my understanding, and based on their site, Fidelity’s cash management account has no account fees or minimum balance requirements. To the best of my knowledge, banks generally do not charge inactivity fees but may charge fees if your account balance falls below a certain minimum. Assuming you have a Fidelity account or plan to get one, you will likely be investing as well. Therefore, your brokerage account will generate some revenue for them.

[@vmurphs]

@@johnsmith1953x no inactivity fees

[@circusfreakRob]

I just moved out of our US Bank checking account earlier this year into the Fidelity CMA. Everything has been great so far, direct deposits, debit card, check writing. I also have it set up to auto-transfer from our CMA to our Roths once a month, and then auto-invest that money into our core Roth holdings. Super easy, barely an inconvenience!

[@mwrightinsurance]

Oh really!😂

[@MrJacksspleen]

Moving out of your US Bank checking account earlier this year into the Fidelity CMA is TIGHT!

[@gosman949]

will not take Zelle if you need it. I pay most of my contractors with Zelle now. Come on Fidelity!

[@JacobWestermeyer]

does fildeity do direct deposits 2 days early or a day early I don't see it on there website

[@JacobWestermeyer]

for paychecks

[@snakesnarroz]

I use CMA and keep a local bank for a few reasons. 1) when I need to deposit some cash and i want to go inside the bank to do so (for safety reasons). 2) I use Zelle pay a lot. Fidelity doesn't have it. 3) I use cashier's checks on occasion, 4) Great if you want 1's, 5's, 10's, 20's, 50's, 100s or any combo of cash for any reason. Also getting rid of that jar of change. You can't put coins in an ATM. There is always a low balance in my brick and mortar checking account because most of it is transferred to my CMA where it is parked until invested etc.

[@msj56]

You can link your Fidelity CMA to Venmo

[@sboy1955]

You can link your Fidelity acct info in the Zelle App.

[@williammorgan5293]

Fidelity is placing a 16 business day hold on check deposits and EFTs. Keep your bank open. Don't trust this account or Fidelity.

[@AcmeSpeedShop]

Correct, Fidelity implemented the hold recently because of scams..but beware, banks are starting to do that also..and will likely continue. 😢​@@williammorgan5293

[@Recovering_Californian]

@@msj56 And then you may be subject to 1099's. With Zelle there isn't any reporting (no 1099).

[@locgem]

Thank you for this. You resolved my analysis paralysis in looking for a high yield savings account and actually improved the current way I do things and solved problems I didn't know I had. Created the CMA. Rolled my HSA into Fidelity where I can actually invest it and maxed out the family contribution for 2025. Opening a Roth IRA there will be next. And lots of options left to save, invest, and pay, all in one easy place. Thanks again for the content.

[@mhoss3520]

I love my Fidelity CMA and have had it for 7+ years. They are free to open and no fees. Between my wife and I, we have 5 CMA’s, each with a different purpose. Individual checking (x2), joint savings (spaxx & VOO), Mortgage for house direct deposit and bills), and Joint checking for our monthly household expenses. Great if you like automating your budget using multiple accounts!

[@Joe-lk6oc]

I agree with you Rob. So far, we've been VERY pleased with our accounts at Fidelity!

[@Christinagross72]

Rob noted the one issue of not being able to deposit cash in any ATM. We solved this by keeping our local credit union checking account open, and deposit cash into that account and then transfer over to Fidelity. Relatively simple to set up and do.

[@momhouser]

These days, I would never go with just one place, especially a pseudo-bank. CMA is fine, but keep a credit union or bank account open as well. Our credit union has been great, and provided the signature guatantees I needed when inheriting brokerage accounts.

[@karlgross8206]

I agree with keeping both accounts as a backup

[@ScottElias]

This is the way. Also a nice way to get a cashier’s check when you need one.

[@jgrant40]

I do the same as Christin stated. Plus... I just opened an HSA account.

[@ShabazzStone]

*_Same here! I also have my Charles Schwab account linked for that, and the "Full View" feature is awesome to be able to aggregate (link) your other financial accounts, to get a full financial snapshot._*

[@Bill-vk7fh]

A SPAXX plus not mentioned is a percentage (41% in 2023) of the dividends are exempt from state and local taxes for those in states with income taxes and allows such exemptions (some states the percentage needs to be at least 50% to qualify, or something like that).

[@rachelp140]

A head's up if planning to use the Fidelity Cash Management debit card when traveling outside the US. We had major issues on certain foreign websites and apps even though the sites claimed debit cards were eligible. These were major sites like Swiss and French trains that would only allow the card to be used in person at a terminal or station. Fidelity claimed no record of any charges being submitted by the merchants but the merchants claimed the card was denied. We tried to use it over 20 times and it was never accepted on these sites. Other than this issue, its been a good product.

[@BobRickert]

Only downside is if you receive cash and need to deposit it. May want to keep a regular bank acct open as a means of depositing the cash. Can be setup to have overdraft protection from your brokerage acct. The level of service from Fidelity staff is super!

[@christinajones3022]

I just opened a Fidelity Cash Management Account specifically to grow my emergency fund. Thank you for bringing this to my attention!!!

[@rogerfisher2303]

Rob. I made the same change a few months ago and haven't looked back. Works very well. Thanks for the video!

[@jm4957]

@Rob Berger I opened a CMA a month ago and got surprised by 16 business day hold times for EFT transfers from three banks. They say there has been a wave of fraud which is why they have these extended holds. I hope this situation resolves soon because waiting that many days to get funds that should be available in several days is not acceptable.

[@Christinagross72]

Agree with Rob entirely, last year we consolidated all of our various IRA and 401K accounts to Fidelity and switched our primary checking and cash management over also so I can manage it all in Fidelity. It is working out well.

[@chrisniner8772]

Ok... I'll agree with Rob entirely.

[@joet56]

Hey Rob I have been using the Fidelity cash management account for a while now. Love it !! Also the debit card is great to. Any fees usually get reimbursed within 48 hours. Also using the debit card at the atm at the CVS Walgreens or 7 eleven there is not a fee taken out. Good luck

[@LEhlert08]

The fee is only for foreign countries. Obviously there isn't a fee in a CVS in America

[@CaptainBenjamins]

I started doing this as soon as Fidelity Cash Management started offering SPAXX. I basically have $1500 in my big bank checking account and the rest of the cash is in here. Makes paying my mortgage so much easier, because of the interest i earned. So now if your mortgage is less that 5% you might as well let the cash sit in here until the interest rates go down, then you can do a lump sum payoff on the mortgage. EDIT: Of course you still have to make your minimum monthly payments.

[@lalaC959]

Would your lender charge you the late fee and hurt your credit score?

[@CaptainBenjamins]

@@lalaC959 I have never had a late fee in my life, so why does that matter?

[@gaelreyes3346]

Hey how much can you withdrawal ?

[@CaptainBenjamins]

@@gaelreyes3346 I have never withdrawed. I just transfer the cash to my big bank checking account. and then withdraw from that ATM instead.

[@borgers7909]

Instead of paying your Mortage down early you should arbitrage it by investing in the S&P 500 index or a total stock market index. The return is 10.703% a year. Even though there are down years, over a 30 year period it's gaurenteed a huge return.

[@richards144]

Good video. One thing you didn’t mention is that you can buy brokered CDs in the CMA while using SPAXX as the core holding. The CDs pay a bit more, you can ladder them out, plus you can get FDIC insurance that way. I’ve been doing that for the past year and it’s worked great.

[@investmentanalyst779]

Should have bought a T-bill and bond ladder instead.

[@kerrydaniels8460]

​@@investmentanalyst779Just use an ETF instead altogether like USFR.

[@SteveHogue]

Very interesting! Thank you for sharing

[@eile4219]

I can do the same on my fedality brokerage account as well. All my cash is also kn spaxx, i don't see much different other than you don't have a debit card. If it can setup auto pay and disposit pay check then i will use it.

[@investmentanalyst779]

@@eile4219 fidelity is pure ass. Especially if you trade anything other than stocks and options. Don’t like it at all. The last straw is the bond platform. Basically stealing money from customers.

[@Rolando-SE]

Did this years ago. Love what it does for me. My view is that all money should be actively invested or actively paying off bills. Fidelity makes it easy to do this. I do have a relationship with a smaller local bank for some of the limitations you mentioned, otherwise I dont really use a bank.

[@sync_440]

I did this about 6 months ago. Everything works great but there are 2 minor downsides for me: 1. Zelle is not supported, I use Zelle monthly so I have an automatic transfer to an external checking acct to handle that 2. To set up automatic transfers to other people you have to fill out a physical form and mail it in (which I didn’t feel like doing)

[@fancher1959]

Rob, having all of our accounts through one platform has been my go-to for years. Fidelity happens to be that platform for me too. My quarterly distributions to bridge SS are deposited into my CMA and the free BillPay handles the monthly mortgage payment. I haven’t given up accounts and local brick and mortar banks, but you did give me something to think about. Cheers!

[@MichaelTRose]

Good tip on making sure your bank deposits outside the FCMA don’t put you over FDIC limits. Also, I love the ROM cover over your shoulder. Comic book fans of the ‘80s unite!

[@nealinnc]

I did this a few months ago. Works great. I still use bank credit cards for as many bills as possible. At the first of the month I transfer all extra cash into the brokerage account write my checks for the due date. I transfer the money back to the checking account the day before.

[@bitscoe3354]

I don’t get what you’re doing. Please explain, giving each bank and account a clear name. Thank you!

[@n8ture4play]

Assume you're doing that because of cash back bonuses? If so, you should apply the Fidelity Rewards Visa 2% cash back if you deposit the money into your Fidelity Cash Managment account.

[@judywagner1842]

We did the exact same thing last year for the same reasons. We keep a no-fee small balance at our local bank to have a local bank if we ever need their services. Only issue we've had is kicking ourselves for not moving the money sooner. Someone mentioned SPAXX fees are higher than comparable fund at Vanguard. Also, the FTSE 3-Mo Treasury Bill has consistently beat SPAXX. But to me, it was a great alternative to having more money at checking account at the local bank, paying near zero.

[@nelsonricciardi7087]

Fidelity hit a home run with their CMA. Nothing like that in the market. Amazing product.

[@miket2067]

This is great - I was looking at replacing my 0 interest checking account with something better, I already have a Fidelity IRA, and I need somewhere to put the RMD I'm about to get. Three out of three! Subscribed!

[@joemyers]

Uncanny! I was just sitting down at my computer to do this and my subscription alarm goes off on my phone and it's Rob doing the same dang thing!

[@davidchen8987]

Haha me too. I did a double take since I just did the same yesterday. Glad to see it’s Berger approved

[@emphyrio]

Incredible, same here 😂

[@kt1809]

Same here

[@jgleigh]

I emailed him about this and got the response about the new video! :)

[@-wood-4067]

Same, today.

[@marechuber]

Seems like a good recommendation. Did it 20 years ago ! 1% past interest income for those that didn’t know better ? Best move I ever made. Be sure if one transfers that they are reputable and provide the service one needs.

[@marksin515]

Rob, thanks for bringing this into focus for me. I'm in the middle now of establishing an account and getting things set up. I compared Vanguard's offering, their Cash Plus account, but it pales in comparison to the Fidelity product. I'm test-driving the Vanguard account as well, but signs don't point to 'yes' so far for that.

[@markdowney4882]

Thanks for this tip. I am very pleased with my results so far! I had been thinking about investing in CD’s but this is so much better having peace of mind that my cash is available whenever I should need it. ❤

[@grudajeffrey6228]

Rob. I did this years ago. Well worth it. Keep in mind that you can do everything in a brokerage account that you can in a cash management account. In addition you can but whatever investments you want. I converted all my cash management accounts to brokerage account and closed them.

[@briandadude]

ATM use?

[@DennisBryant-dp4cy]

Yes, ATM with debit cards, checks, and you can auto pay your 2% cash back credit card to this brokerage account as well. One-stop-shop and we really like it.

[@mikelandi9141]

I have never justified the need for a separate CMA. I can do the same things with my Fidelity brokerage account.

[@janethunt4037]

Thanks for covering this. We minimize what we have in our local bank and charge all we can on charge cards to get benefits there. Vanguard money market is holding our funds for retirement needs.

[@kalivathorne8189]

I did this several months ago. I'm very happy with my decision.

[@kenfrank2730]

I recently retired and receive a monthly pension payment. I need a place to store some of that money, besides my regular checking account at BoA. This CMA looks a like a good option. Thanks Rob.

[@ameliabaran932]

Thank you for this video! I've had a Fidelity CMA for years and I didn't know SPAXX was an option! I just switched my core position via the robot that came up to help when I clicked "Customer Service" at the top left of the screen. It took less than a minute. I plan to check back on the SPAXX vs FDIC rates annually, but for now SPAXX is a no-brainer for me.

[@joelweeks3440]

Thanks for the content. Tried this account recently. Things were going well until after a month the account was locked. They needed a picture of wife’s social security card to proceed. We don’t have that, and the effort seems not worthwhile as there are many financial institutions that have no such requirement.

[@OffGridandOutdoors]

HUGE DEAL BREAKER NOTE: Currently, the CMA has a 16 day or more hold on ALL electronic deposits (including using the app to take a picture of a check). The funds can be traded, but not withdrawn. So if you are using this for a daily checking this might be a deal breaker. The only way to get funds into the CMA for immediate use is to wire the funds (which could incur a fee for the wire from your institution). This hold has to do with Fraud that has take place at Fidelity and it might be lifted in the future, but Fidelity just told me there is not date for the removal of the hold as of yet.

[@n8ture4play]

Not been my experience and I have had the account for years. Maybe history of your account (and your linked accounts) matter?

[@OffGridandOutdoors]

@n8ture4play the current 21-day hold according to Fidelity has been having to do with bank fraud and institution fraud

[@shanedickman6180]

This is 100 percent accurate! I found this out today.

[@furyofbongos]

Thanks, you saved me some time!

[@mikemillson2986]

I have had my account for 20-25 years, and they recently implemented this 16-business-day holding without any warning. Even worse, I had to call multiple times and even listen to finger pointing that it was due to the financial institution on the other end. Despite having multiple accounts and huge amounts of money with them, admitted this was an unannounced change, they didn't care. They let transactions fail, checks bounce. The decent thing to do would be to notify customers ahead of time! I will put here what Fidelity will not tell you: don't deposit your checks into Fidelity (or do an ACH push, which is the equivalent of a check), unless you want to wait a month to be able to actually use the money. Deposit checks in real banks/credit unions. When I opened this account they marketed as a checking account replacement. Now, they simply say, "We're not a bank." This has entirely complicated computing account balance. It's no longer good enough to see the money credited to your account balance. You have to click through and find where they list the cash vesting date. The one exception seems to be direct deposit, those "checks" are registered same day. My head is spinning trying to figure all this out and what I will do going forward. One thing is for sure, I no longer trust Fidelity.

[@jnorm0075]

The cash management at fidelity is fantastic. I've had it for years with SPAXX at 4 and 5%. However, if you are gonna compare it to a FDIC insured savings make sure you mention the cash management account also has up to 250k of insurance just not fdic. I had many conversations with fidelity and there is protection. I just don't have it handy here, but it's not a risky choice as perhaps hinted at here. Thanks. Good video

[@davidmaib677]

Very cool! This is what I do! I run my whole life through this set up. One of the other great things is that you can set up other accounts under fidelity. What I really like is that I can pull money out overseas with no charges and as with all Fidelity accounts you can set up different levels of security. Lastly, Fidelity lets me deposit Euros from a company overseas that has me looking at their interest here in the US. I then relocate this to specific accounts so that I get a 1099 at the end of the year for tax purposes.

[@billywatson9821]

That is awesome!

[@billwinter8386]

Agreed. We consolidated all of our accounts - investment and cash management - to Fidelity this summer. So far I would say that was a very good decision.

[@Decker-hx2ir]

You can automate investments in Other money market Funds. Just set up a recurring investment in the CMA into That money market fund and it will just liquidate whatever money market fund you are using to buy more of that money market fund. So if you have a direct deposit set up with your CMA you can auto invest in whatever “core position“ you want.

[@briandadude]

Yes this should work for Fidelity money market funds.

[@nelsonricciardi7087]

It does ​not work for money market funds. Not all products are eligible for automation. It does not work. @@briandadude

[@nelsonricciardi7087]

It does not work. Try it. Fidelity will tell you that mm is not eligible. ​@@briandadude

[@armada730]

Welcome to the club. Been doing that for years. Wish I had done that even earlier...

[@ksolobk]

Rob, thank you for the information, but don’t forget to mention the 0.42% fee for keeping your money in this fund.

[@CodaBroda]

Expense ratio is already factored into the yield EDIT: That is worth noting though, pretty expensive fund

[@jm9565]

Expensive relative to an index fund, but you're getting a lot of utility for that expense, considering you're doing well to find a free checking account paying more than 0.1%. If someone has a similar account for less expense, then obviously that would be great.

[@wilma6235]

@@CodaBroda factored in meaning we earn 4.96% less the fee of 0.42%?

[@CodaBroda]

@@wilma6235 Yield is 4.96%, would be 5.38% without the fee. Makes sense since Vanguard’s (VMFXX) yield is 5.25%, it only has a 0.11% expense ratio

[@AMAZINGBEAST6]

@@wilma6235 Yes. The 7 day yield is taking into account the expense ratio. I think of this as essentially the price we pay for liquidity in the CMA.

[@forrestegan]

I’ve been keeping the cash portion of my Traditional & Roth IRAs in SPAXX, so I’m familiar with that…but I still like having my credit union accounts (I don’t deal with any traditional banks anymore) for my cash as there are other benefits to having those accounts, as you mentioned (you specifically mentioned depositing cash, I would add that the last couple of car loans I’ve had were handled through my credit unions as they offered much better rates). Thanks for the info!!

[@robertnunn3015]

This is the best account I’ve ever opened ! When I moved to Asia I get all my ATM fees rebated and their customer service is Amazing !!

[@weslh4305]

Can you deposit cash into the ATM and have it upload into the Fidelity account?

[@robertnunn3015]

@@weslh4305 , I am not really sure since I live abroad but maybe in the states thats a possibility.

[@lusmas99]

I did the same thing now that saving rates at banks are dropping. Thanks for the Member Banks tip. That was very helpful.

[@FlyingBlind6969]

Great video, I've done this a few years back and enjoyed the 4.97 but also been doing it long enough to see zero percent. Love it though and have set up several friends and family with this setup.

[@mrprfct7069]

Nice to see this video. I have all our businesses accounts with FID. But only drawback is well no real bank to get cash if you need it today. Must think ahead of what you might need.

[@alexanderlee6509]

Thanks for this. I have a balance in the CMA but as dry powder for investing. Did not realize there were checking and debit card features. Will definitely look into it.

[@liotay98]

@1:31 they don't have foreign transaction fees to begin with right as of today?

[@aaronlojewski6819]

Your main fee is the expense ratio on the money market fund. Try comparing the expense ratio there to Vanguard for a comparable fund. For example, the expense ratio of VMFXX is just .11% so Fidelity is overcharging (.42%) on its default core position expenses fee to deliver "free" checks, debit cards, no FX fees spending overseas, ATM fee refunds, etc. I have been a Fidelity customer for years but for every 100k in money market you are probably paying 200 to 300 USD per year extra in expense ratio fees for these perks. You can buy actual T-bills for larger sums to minimize these expense fees.

[@briandadude]

Keep 2 months of expenses in the Fidelity CMA and other cash at Vanguard

[@Robert-z8z1z]

So there is a catch. I thought this all sounded too good to be true.

[@aaronlojewski6819]

@@jeffb.2469 He was comparing Fidelity cash management to a traditional checking so it was a 100% fair analysis.

[@javiert9766]

For a money market fund, the expense ratio doesn't matter it's the yield. That's why Fidelity mmf funds have lower yield compared to Vanguard is the higher expenses. If you're fine with the yield then that is what matters. I don't know why anyone would hold 100k in cash anyway. I keep enough cash to cover 2 month of expenses in FDLXX and the rest of my liquid cash/emergency funds are in t-bills.

[@aaronlojewski6819]

@@javiert9766 In this case these two money markets are substantially similar so the expense ratio is what mainly drives the difference in yield. Different stat to find the same conclusion. Fidelity SPAXX at 4.96% (ex. .42%) 7 day and Vanguard VMFXX at 5.39% (ex. .11%). Just like if you had 2 total stock market index funds, if they both are equivalent in management, ease to trade, etc the expense ratio will be the driving force between them.

[@jagsterr1]

Rob at the 5:35 marker of your video - you also have to make sure the listed banks are not related to any other of your savings banks for added safety.

[@celts03]

been using this for years. Awesome account.

[@o0usf0o]

I have the FCM account… mine is the fdic insured core position. I do buy some SPAXX as well since it lets you have both in that account.

[@SpookyEng1]

I’ve been using the fidelity CMA for years. Works great though the bill pay could be better.

[@lewisaveryfiler7087]

What sort of problems have you had with their bill pay?

[@Jim-ne2vl]

You did a really nice job here. I have been a Fidelity customer for years and your presentation gives me much food for thought.

[@LarryWilliams-xu8qs]

We have used FDRXX for our CMA for years instead of SPAXX. It has a little lower Exp. Ratio, and the same or slightly higher yield. About the same composition.

[@imo88-lh3kp]

How did you do that ?

[@anthonyhobson367]

Like others have mentioned, I was also considering moving my emergency funds into a CMA, and the shared info was definitely helpful in calming the concerns 👍🏾👍🏾

[@CuriousDuckk]

I have been using it for years, never looked back.

[@taurusthebull76]

Me too

[@guorongchen5689]

Just opened mine! Thanks for your insight and all the good comments below, Rob!

[@daj4740]

I've been keeping all of the cushion in my regular checking acct invested in a 4 week treasury bill so that I have the option of taking some of it back out of the treasury bill if I need to. Thats been working great this year.

[@kimappreciateslife]

Doing the same

[@meangene1672]

Had one for a year. Excellent experience so far!

[@ravirr513]

I did this last year and don't regret it for a second. I do keep a checking account with my local credit union for the rare times I need to handle cash

[@frankb1]

I did that 10 years ago and have had a good experience. The only problem I've had is getting cashier's checks. Also, the bill pay service doesn't work as well as Chase's service.

[@theblackphantomhd]

No need for a cash management, account, you can run mostly everything through their brokerage account. 4.96% on uninvested cash, check writing, direct deposit, etc...only not a debit card and bill pay options. I like to keep banking and investing accounts separate.

[@briandadude]

Why not use a CMA with the debit card locked unless you need it?

[@daw7773]

Good point.

[@QUESOesFANTASTICO]

You actually can get a debit card for a regular brokerage account. I opened a Fidelity Brokerage account to use as my regular checking account and ordered a debit card to go with it, works perfectly fine. Can order checks too

[@DonaldConceicao]

I think it’s a great idea to keep these accounts separate. If a bad actor gets access to any of your accounts they have access to all your accounts. I’m in the bank fraud business and have been seeing very sophisticated account takeovers. Don’t do routine banking where the bulk of your assets are..

[@Fred2-123]

@@DonaldConceicao Agree 100%!!!!!! Too many people don't stop and think of the risk they might be subject to. Keep your banking in a separate account with no automatic tie to your investment account.

[@paulciccarello661]

Great video, I opened an account when the video first aired, it makes things easier to manage when using Fidelity

[@Aerieudite]

We invest with Fidelity, bank with a Credit Union, and have considered moving our banking to a Fidelity CMA. One concern is that if a Fidelity CMA is hacked, could investments be swept away with the unauthorized withdrawals? Also, who would be the point of contact for unauthorized activity, Fidelity or UMB?

[@k5sss]

That’s the sticking point; if you have any “bank” problems, like your debit card, you have to work with UMB and get them to put the money back in your Fidelity account. If this is a sticking point for you, look at Schwab’s equivalent. They’re a real bank and have a bit more of a wall between accounts.

[@SnowyCountryChicken]

I have had a Fidelity Cash Management account for years. It used to be called Smart Cash Account, a name I preferred over the current one.

[@DonaldConceicao]

I think these accounts should be separate . If a bad actor gets access to any of your accounts they have access to all your accounts. I’m in the bank fraud business and have been seeing very sophisticated account takeovers. Don’t do routine banking where the bulk of your assets are.. Just my opinion.

[@richj011]

My Fidelity debit card had 3 fraudulent purchases last week, 2/3 purchases were denied but an $87 purchase went through. Now it's being investigated. I just received a new card.

[@trailup]

@@richj011 Did they side in your favor and gave you your $ back indeterminately?

[@georgejetson4378]

@@richj011Reason #1 on why I will never use a debit card. There is no or in best cases very limited consumer protection against fraudulent use and most worrisome is that money is transferred out of your account the instant a purchase is transacted. Unlike a credit card where money transfer is regulated/controlled by you, the credit card user. Under current consumer protection laws, the lion share of risk of fraudulent usage is the burden of the credit card issuer and not the consumer.

[@MrKjm444]

Nice presentation thank you very much! I think I will set this up for us because we are always disappointed in the interest-bearing account on Bank savings

[@priyankrana1712]

Hi Rob, Thanks for the video. How about other institution with similar product. For example I have accounts with Vanguard , any review on Cash Managment account with Vanguard.

[@briandadude]

Vanguard cash plus is not as robust: 1. No debit card option 2. No option for paper checks 3. Funds must be transferred to the FDIC option to pay bills 4. Newer and some payees may not be supported yet 5. No ability to withdraw cash 6. FDIC is the only settlement/core position option

[@k5sss]

Vanguard is not competitive. Schwab is worth considering; you can find lots of videos and articles comparing it vs Fidelity.

[@jvini68]

Just retired. I keep my cash in SGOV in my Fidelity brokerage account and send my monthly funds to TD from SGOV. A small extra step but I like keeping my monthly 'paycheck' separate. The idea of resetting all my autopayments is also daunting.

[@willsamuel6750]

The problem with SPAXX is that the expense ration is 0.47%. Something like a short term t-bill fund (e.g., SGOV 1-3 month treasuries) is much cheaper (.09%) and it has a higher yield (5.19% right now). You can’t use that as your core holding, but outside of your “checking account” cash, there are better options.

[@sixstringsdaddy2477]

The yield is shown after expenses, so that's why you should focus on when comparing funds

[@believeroftheword4627]

Yes! I recently did the very same thing because the monthly return on my small pile in the brokerage account was shockingly good. 20% of current pay goes into the brokerage for the "crash" days, which are pretty frequent these days but the best buying opportunity. I noticed the monthly dividend on my holding and realized my everyday account at the branch place is not working for me anymore.

[@MrP1ST0L]

Wealthfront's cash account is 5% APY and covers up to $8m in FDIC insurance by spreading it through multiple partner banks

[@scottspiro4876]

This is indeed what I've used.. the Wealthfront cash account. Seems to have many of the benefits that the Fidelity CMA has.

[@SteveGoTex]

I also moved to the CMA at the beginning of the year. I keep a low balance in the account, and have the bulk of our cash in a taxable brokerage account at Fidelity in T-Bills and MMF. I am retired, and prefer to transfer cash in manually when the CMA balance gets too low.The transfer is instant. I do not use the Cash Manager Tool as I think it is asking for trouble. Probably that old '60s paranoia, but the thought of a fraudulent debit or ATM transaction would keep me awake I night, so no auto-transfers. Otherwise, I am very satisfied with the CMA and how it works with my taxable brokerage account.

[@NextGenEvs]

Can you covers Vanguard’s cash management account? Compare the two

[@nelsonricciardi7087]

Not even in the same league. NFL versus high school football.

[@Rbecker26]

I like FDLXX better for living in NY. You have to pay state tax on the interest on SPAXX. FDLXX is state tax exempt so it turns out to be a higher return. You do have to manually buy FDLXX however, fidelity will auto liquidate it if you're transferring money out or you're using a check or card so you don't have to worry about selling it or waiting for the market to open.

[@Rick-Upton-San-Jose]

I'm doing the same due to California considering SPAXX to be taxable and FDLXX to not be taxable

[@timtaylor9339]

All nice until you need to get some cash in non-standard amounts ($5, $10, etc.), need a notary while traveling, use Zelle, etc. I keep enough in Wells Fargo to get no fees. Transfer any extra to Vanguard for better MM rates. WF has banks in almost every city in the west and I have used services many times while traveling to get cash, manage rental properties, and hard money loans.

[@robertjohnson4401]

All good points.

[@kkesq11]

Concur. Also no cashier's checks, and while Fidelity debit cards have no fees, practically every ATM will charge you a 3% fee, regardless. I keep $500 in bank account just in case I need cash. And I make a ACH direct deposit once each month to avoid bank service fees. Link Fidelity to your bank and you can transfer funds back and forth with only on business day delay.

[@don951]

@@kkesq11You've misunderstood. Fidelity reimburses ATM fees charged by other banks. I made the switch years ago and have loved it.

[@hanwagu9967]

@@don951 unless the ATM owner codes the transaction fee differently. I've come up with problem with my regular bank that reimburses all atm fees, but there are operators that code the atm fee that does not register as such.

[@snagboi]

Everyone needs a brick and mortar (wells, boa, chase) just in case, but majority of your cash should be held in an online money market account.

[@tbadj649]

at 8:31 I see on the Finance Buff article that it says "1% transaction fee on debit card purchases in foreign countries." and then says "This fee doesn't apply to international ATM withdrawals." As of today 01/23/25 that language is not in that article anymore. I just want to know: Is there a fee for cash withdrawals made from ATMs (1% of the amount of withdraw) in foreign countries (in local currencies)?

[@Go_Horns2024]

Rob, great information. Will definitely consider this.

[@captnhuffy]

Yup. 👍. Have already done so. 99% of my financials go through them, and the cash management account. Granted I have a bank check account where one, just one, service provider automatically takes payments. I travel butt tons, and seriously want that service to never be interrupted. Note that I also receive a small discount in allowing them access.

[@Baylor117]

Rob/community... I watched the whole video but still struggle to understand this: Why is this more advantageous than a HYSA with 5+% APY I can get at many banks? Is it the frequency of compounding? Sorry if ignorant/dumb question...

[@mgallegos4708]

Ease of access. I have an HYSA with Cap One and it can take 5 days or so for money to be moved in or out. With the CMA, there’s no delay to get access. Time=Money.

[@mgallegos4708]

I personally don’t like the .42 expense ratio. I like .1-.25 for MM. How do you justify it?

[@Baylor117]

@@mgallegos4708 makes sense thank you

[@briandadude]

The difference is this serves as a checking account for paying bills, credit cards, writing checks, etc. Savings accounts are limited in how many withdrawals per month and check/debit card access.

[@Baylor117]

@@briandadude very helpful

[@vemurionetwothree]

1. Does the CMA come with a SWIFT code so I can deposit incoming dollars from a foreign country? 2. Does the CMA allow for unlimited ATM use in a foreign country?

[@SurfCityBill]

This is more seamless than Schwab but I keep all my idle cash in SWVXX 5.14% yield, 0.34% exp ratio. I do have to "sell" to cash then transfer to checking if necessary, but rarely is this an issue.

[@srconrad]

I do the same. Seems to me the only difference is that we have to manage the funds into and out of SWVXX. Only takes one business day though.

[@paulad6728]

I have done this for a few years now. Love it!

[@El-Aton]

Good review and i like my CMA account, too. Another con is that you cant transfer to and from the CMA from other banks. I have to send cash go my Roth, then transfer it to the CMA.

[@terenceada9140]

Fidelity Cash Management is head and shoulders better and any current bank checking account.

[@brandonluckman1816]

Just do the brokerage account, I did this for a few yrs. Only downside was the restrictive policy (20+ days) before funds are available if they draft from another account. It is UMB Bank that is Fidelity branded. I found a Merrill CMA paired with a BOA checking account a better option.

[@golfaddict75]

Am I missing something? Don’t you have to report all these buy/sell transactions as tax events? What about capital gains taxes? Seems like too much overhead to just pay monthly bills using mutual funds right?

[@Stroz92]

I have had the cash management account for a few years. You only report interest earned unless you trade stocks/bonds in it.

[@cheesewagon85]

NAV is always one. No gains, no loses in theory.

[@tim71pos]

You would report the interest same as a bank account. Except that you would not be subject to state taxes on a US Treasury money market fund. The tax events are for capital gains on stocks and bonds. It might be possible to have a capital gain on a money market account but I've never heard of it. It is possible to have a loss on a money market account but it would require extraordinary circumstances like Russian troops invading Washington, DC.

[@hanwagu9967]

No, because they are fixed $1. Theoretically, if it broke the buck ($1), it could be a loss, but it's not a capital loss for deduction purposes. The only thing you would report is what is on your 1099-DIV for the unqualified dividends earned, so they are taxable as ordinary income.

[@hanwagu9967]

@@tim71pos Some of the SPAXX dividends earned may or may not be subject to state and local taxes, depending on your state. SPAXX does not meet the threshhold for US securities to exempt in states like CA, CT, and NY. Since only a portion of SPAXX is US securities, not everything for other states may be exempt either.