SPAXX vs. FDRXX, FZFXX, FDIC, FCASH - Fidelity Core Position (2024)

If you’ve got a Fidelity investment account, you’ve probably encountered several options for your “core position” for cash: SPAXX, FDIC, FDRXX, and/or FZFXX. Is there a best option? I compare them here for 2024.

// TIMESTAMPS:

00:00 - Intro
00:31 - What Is the Fidelity Core Position?
02:10 - SPAXX - Fidelity Government Money Market Fund
03:02 - SPRXX - Fidelity Money Market Fund
03:17 - SIPC Insurance
03:38 - FDIC Program
05:00 - FCASH
05:14 - FDRXX - Fidelity Government Cash Reserves
05:37 - FZFXX - Fidelity Treasury Money Market Fund
06:07 - Conclusion & Outro

// SUMMARY:

Your "core position" at Fidelity refers to where your uninvested cash goes.

SPAXX is a money market fund. This is a fund that holds ultra-short-term instruments that are considered cash equivalents. SPAXX is specifically collateralized by government securities, and would thus be considered safer than a broader money market fund that includes corporate debt. SPAXX has an SEC yield of 5.00%.

You may see SPRXX instead of SPAXX. They're very similar and should have the same fee, but SPRXX is slightly broader in its scope of debt instruments, so SPRXX may pay a higher yield than SPAXX.

SPAXX and all the money market funds are insured by the SIPC.

FDIC is simply an FDIC-insured vehicle into which cash is "swept" inside the account. FDIC stands for Federal Deposit Insurance Corporation, which is quite literally the organization that insures your cash deposits up to $250,000. This is basically a true savings account like you'd have at your regular bank.

As of January 2024, this FDIC cash sweep program has an interest rate of 2.69% and a fee of 0.01%. In the event of a lack of capacity or availability from program banks, any excess cash will be swept into the Fidelity Government Money Market Class S mutual fund, for which the ticker is FZSXX. Fidelity refers to this as the "Money Market Overflow."

FCASH is a free credit balance from Fidelity that earns interest. At the time of this video, its interest rate is 2.69%.

Like SPAXX, FDRXX is a U.S. government money market fund. For all intents and purposes, it is basically an older version of SPAXX. FDRXX has an SEC yield of 5.02%.

You may encounter FZFXX in your taxable account. It's the Fidelity Treasury Money Market Fund. It's basically the same as SPAXX and FDRXX except it does not have the 10% or so in agency securities. This one is entirely U.S. Treasury securities. Right now FDRXX is exactly the same as SPAXX at 5.00%.

Don't overthink your Fidelity Core Position.

You can change your core position at any time online yourself, or you can also call a Fidelity representative to do it for you at 800-544-6666.

Read the blog post here: https://www.optimizedportfolio.com/fi...

#fidelity #fidelityinvestments #moneymarketfund

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