SPAXX vs. FDRXX, FZFXX, FDIC, FCASH - Fidelity Core Position (Updated 2023)
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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.
// TIMESTAMPS:
00:00 - Intro
00:58 - What Is the Fidelity Core Position?
01:12 - SPAXX and FDRXX
01:59 - FZFXX
02:16 - FCASH
02:36 - FDIC
03:18 - Conclusion & Outro
// SUMMARY:
We’re concerned with yield and fees, so the choice basically comes down to a higher yield with something like SPAXX, FDRXX, or FZFXX or FDIC insurance but a lower yield with the FDIC-Insured Deposit Sweep Program.
Your “core position” at Fidelity just refers to where your uninvested cash goes inside your account, and you have several options for how exactly that cash is held.
So first, SPAXX and FDRXX. These are money market funds and for all intents and purposes, they're the same thing. FDRXX is basically just an older version of SPAXX. At the time of this video, SPAXX has a yield of 3.85% and a net expense ratio of 0.42%, while FDRXX has the same yield of 3.86% and a net fee of 0.27%.
You may see SPRXX instead of SPAXX. They’re both very similar and should have the same fee, but SPRXX is slightly broader in its scope of debt instruments. SPRXX may pay a higher yield than SPAXX.
FZFXX is extremely similar to SPAXX and FDRXX. Its fee and yield are 0.28% and 3.86%, respectively.
FCASH is another option you'll see in your taxable brokerage account, which is called the Taxable Interest Bearing Cash Option. This is the default option inside your account. FCASH is a free credit balance from Fidelity that earns interest. At the time of this video, its interest rate is 2.19%.
Now let's talk about the FDIC-Insured Deposit Sweep Program, which you might see as an option if it's a retirement account like an IRA. This is an FDIC-insured vehicle into which cash is “swept” inside the account. This is basically a true savings account like you’d have at your regular bank.
At the time of this video, this FDIC cash sweep program has an interest rate of 2.19%.
At the time of this video, FDRXX looks the most attractive of the money market funds with a yield after fees of 3.59%. If you want that FDIC insurance, though, you'd have to go with the Deposit Sweep Program. I can't tell you which is the best option for YOU.
You can switch between these anytime you want, and at the end of the day, this is definitely not a decision to lose sleep over.
Read the blog post here: https://www.optimizedportfolio.com/fi...
#fidelity #fidelityinvestments #moneymarketfund
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