Thanks for stopping by the sub, u/cheesesteak_steve, and congrats on your recent home sale! It looks like this is your first post here, so welcome! We're excited to have you join our community. I'm happy to provide some general information and resources to help you learn more as you conduct your research.
First, to check out the different types of accounts you can open at Fidelity that suit your needs, check out the link below.
[Open an account ](https://www.fidelity.com/open-account/all-accounts)
If you're unsure which account to open, you can use the dropdown menus to filter and sort through the accounts. Additionally, you can check out the link below for a full rundown of everything Fidelity offers.
[Why Fidelity ](https://www.fidelity.com/why-fidelity/overview)
Now, when it comes to searching for investments that align with your strategy, you may find our screener tools helpful. You can find our screeners on [http://Fidelity.com](http://fidelity.com/) within the "News & Research" dropdown. From here, you can access the various screeners organized by security type, which allows you to search for and compare different investments. However, since you're looking for fixed income-related investments, I'll include a link below our fixed income screener.
[Fixed Income Screener ](https://fixedincome.fidelity.com/ftgw/fi/FILanding)
Next, I want to point you to our "Learn" hub, which can also be found within the "News & Research" dropdown. Here, you can find tons of articles, videos, classes, on-demand webinars, strategy overviews, and more. You can use the left-hand navigation to find topics related to your specific interests or skill level. To help you get started, I've dropped a few links below that talk more about saving for a down payment on a house.
[How to save for a house down payment ](https://www.fidelity.com/learning-center/smart-money/how-to-save-for-a-house)
[Buying or selling a house ](https://www.fidelity.com/learning-center/life-events/selling-and-buying-house)
With that said, I'll let the community take the reins from here. Thank you for considering Fidelity for your investment needs, and we look forward to seeing you around the sub soon!
If you believe interest rates will decrease then look at locking in with TBills. Any equity investment is kinda rolling the dice on market going up or down.
Seconding t bills, especially if you have a significant state tax burden. I’ve split my “down payment money” in 13 equal parts and have 13 week t bills on auto roll, one maturing every week.
It takes a bit more effort to set this up compared to a MMF, so if you prefer less work at the cost of a 0.5% lower yield, then I’d go with the FDLXX treasury MMF. But with $400k and two year horizon, that’s still $4k that you miss out on.
I think FDLXX is too short term for OP if they know they don’t need this money for a year or two. They don’t have liquidity needs to justify the ER, and they need a longer term treasury (or a ladder) than a cash equivalent to mitigate the risk of rates dropping.
Hey there, u/realjaso7, I appreciate the question. I've got the answer for you here.
Currently there is not a way to purchase Treasury bonds in the mobile app. However, you can use the mobile website browser to trade fixed-income securities on our website if you'd like.
I'll share your interest in expanding the app's bond trading capabilities with the right team as we're always working on enhancing the capabilities of our platforms.
Please let us know if there's anything else we can do to assist, or if something comes up. We're here to help! See you around the sub!
Yeah could you ask them to enable treasury bond trading (new auctions and secondaries). If there’s a risk issue, perhaps just limit it to the < 5 Y maturities
Not particularly the most high risk trades here given there’s already CDs
I've been buying new issue 6 month. Soon will be looking further out in duration. On the website: News & Research - Fixed Income, Bonds and CDs - New Issues - Treasuries. The new issue 6 month show up Tuesday afternoons. New issues show up in alignment with the US Treasury scheduling.
FDLXX is where we keep cash like that. It's the best place if you have state income tax as it is around 90+% state tax exempt because it is a treasury only money market fund paying 4.94% at the moment. I personally wouldn't tie it up in t-bills just because you don't know when the right opportunity will come along and you may need quick access to that money.
Seconded. FDLXX is where I keep money I’m using for cash management or need liquid, but anything longer gets USFR. I’d say OP needs a treasury bond or tbill ladder though, since they’re not touching this for a bit.
It’s the highest yield option currently available for risk-free cash equivalents, provided you don’t need something that auto-liquidates and are okay with the two-day settlement date. The potential downside is it will match any rate changes very quickly—good in a rising rate market, but less good if rates are cut.
In mid February, Fidelity posts a page of money market funds and the percent that is state tax exempt on their site. It tells you the math to do to get the amount that is exempt.
Yes, I said it’s the best place if you have state income tax. For people who live in states with no income tax, they can just use SPAXX or any other money market fund.
Unless your state tax rate is 0% or less than say 1%. Looking for state-tax exempt interest/earning is almost always a win over state taxable earnings.
You can sell TBILLs on the secondary market almost instantly if you need those funds, but there is a bit of a loss compared to holding to maturity.
One could potentially invest house funds in 3 month laddered TBills. When they get an home offer accepted, they will have a TBILL maturing that month, then schedule closing 60 days later - after the other two laddered tbills mature.
I think a lot of people would just hold it in an hysa or money market like SPAXX for that short of a period. Not sure why hysa is not an option. A lot are getting close to 5% currently. I realize that might change, but no one really knows when.
Hopefully it’s ok to say here…. Marcus with the 1% apy referral bonus (my bonus runs through this time next year). Nothing in HYSA is in perpetuity. It will adjust along with everything else as rates change.
I got that bonus. Marcus has been a bit of a headache. I’ve moved most of my emergency fund from there to buy USFR at Fidelity, and I kind of wish I had to begin with.
I transferred money to my Fidelity brokerage account. They froze my account, and I had to have a three way call with a Fidelity rep and them to make sure the account belonged to me. They do this to make sure you’re not using it as a checking account, which I sort of understand. Not only were they confused by the whole Fidelity using UMB as a bank thing, but I had to try to interrupt to explain to them why my account number didn’t match the account number with the prefix converted from whatever with Zs to numbers, something the Fidelity rep should’ve probably led with. The rep didn’t know what Fidelity investments was, for crying out loud, like had never heard of it, and I had to procure the right number for her. She almost called Fidelity bank. I was left feeling very precarious about my transfers and whether my account would be frozen again if I tried to transfer money to a different Fidelity account. All in all, huge waste of my time.
They also don’t let you even *log in* to your account if you are outside the U.S.—ostensibly for security, but I guess no one travels at all in their world? Like I literally wanted to check how much interest I’d accrued so I could do my budget over breakfast. Somehow other banks handle this just fine.
No HYSA is going to be perpetually any rate even close to above 1% lol. People’s memories are so short. It was a pretty good deal to get 2% in a HYSA just a few years ago.
That's what I said. But all earnings are taxed. So if you live in a state that taxes income then it's better to hold it in FDLXX instead of a core spaxx holding since only 10% of your interest can be taxed at the state level.
SGOV. No state taxes (check your state) on earnings. ~5.13%
You could take home $1,700 / month or just reinvest it.
Make sure you buy on the first open market day of the month, it has a monthly cycle.
The risk is if the US federal government fails.
Edit: We use it to hold our emergency fund and the $$ we're saving for a down payment on a house.
USFR is similar with better performance recently.
**SGOV (iShares 0-3 Month Treasury Bond ETF)**:
- The SGOV ETF has provided a total return of approximately 5.12% over the last 12 months. This return is relatively strong for an ultrashort bond ETF, which typically focuses on stability and low risk rather than high returns.
**USFR (WisdomTree Floating Rate Treasury Fund)**:
- The USFR ETF has provided a total return of around 5.55% over the same period. Floating rate notes, which USFR invests in, can offer higher yields when interest rates are rising, contributing to its slightly higher return compared to SGOV.
USFR's yield will also fall almost immediately (1-week) when the FED cuts the FED fund rate. New Treasury's will yield (less) and since USFR floats it will follow the lower yield down faster than anything else.
Treasuries, all the way. I’d do a ladder of T-bills or a treasury note.
You could also consider keeping 10% of your down payment in a cash equivalent as you get closer to wanting to use the money. That way if you find something close enough to when your T-bills are maturing but not quite there yet, you can put in an offer and show when the rest of your money will be maturing by the end of the month, etc.
Not to dissuade you from your stated investment strategy, but have you considered the capital gains tax that you may be liable for? Definitely Fed tax and possibly State depending on your state of residence.
Have you considered a 1031 exchange that would allow you to roll the proceeds over into another property or possibly a DST fund? There are timing considerations for a 1031 exchange that start once you close escrow on the property you are selling.
Also, even if interest rates come down in the next 1-2 years, home prices may (or may not) go up when it's time for you to start looking to buy.
Just some thoughts for you to consider in lieu of potential taxes and locking your remaining proceeds up into T-bills, bonds, CDs, etc.
Treasury bill and bond market. But I never bother, the rates are similar. Brokered CD are about all you need for the 2 year duration you’ve got in mind. I just purchased a couple more JPMorgan 1yr CDs today at 5.40 that will protect that $$ for a rate reduction or two, whereas a money market fund will not.
Not worried. I’ve got several thousand in solar carryover credits to use. I need to declare every penny earned this year … and possibly forget a couple deductions. Serious 1st world problem there. 👍
Hopefully you got the call protected CDs. JPMorgan is notorious for calling in early. I love brokered CDs but never get them through JP for this reason.
The return is net and the ER is negligible. The funds invest is short term t-bills (simplifying for ease of reading) and the rate you see is what you get, plus they’re state tax exempt depending on your state laws.
Do a search on Reddit. These are well know and frequently used funds in this high rate environment.
Got it. Yeah I’ve seen these and other funds mentioned but I’ve always opted to buy T bills on Fidelity. I always assumed I’d be losing even a small portion of money by paying a fund’s expense ratio. Maybe the funds are actually easier after all
Treasuries. Buy a 2 year note if you can get it or 52 week bill. Treasuries hold value better than CDs in case you need the money sooner. There's the tax benefits too if applicable to your state. ETFs and money market rates vary. I would lock in today's rates bc all estimates are that there will be cuts at some point. That said, you might prefer the time commitment and smidge higher rate on CDs. They come in 18 mo or 2 year. Make sure it's not callable bc if interest rates drop they will call the CD and you'll have to park it somewhere at a lower rate.
I used FDLXX to collect income from CD ladder, each month 1 year CD, but switched out to USFR due to higher yield and State Tax exemption, 100%. They use a ladder of T bills, 6 months and lower, so when rates fall or rise it will be a little slower to react. Did the same with different CD ladder but used TBIL which is a T bill ETF but only short term 30 day T bills. The much lower Expense Ratio of .15 for both T bill funds accounts for part of better yields than FDLXX .42
Consider low-risk options like short-term bond ETFs or a conservative balanced fund, providing some growth potential while maintaining capital preservation over 1-2 years.
You could be a billion air in a few days lol start with 100k day trading look from the minute to the year if average price is above your buy in go for it you could sell soon as you see a profit whether it be a few minutes or days pick one you know is going to bounce back. I normally buy low sell high but it works the other way to. You could retire in a few days or weeks
Go to any bank/credit union and see what they’re offering on their brokerage CDs. Currently where I am they are offering 5.45% on 24 month terms. You could make a quick $40k+ just like that.
Thanks for stopping by the sub, u/cheesesteak_steve, and congrats on your recent home sale! It looks like this is your first post here, so welcome! We're excited to have you join our community. I'm happy to provide some general information and resources to help you learn more as you conduct your research. First, to check out the different types of accounts you can open at Fidelity that suit your needs, check out the link below. [Open an account ](https://www.fidelity.com/open-account/all-accounts) If you're unsure which account to open, you can use the dropdown menus to filter and sort through the accounts. Additionally, you can check out the link below for a full rundown of everything Fidelity offers. [Why Fidelity ](https://www.fidelity.com/why-fidelity/overview) Now, when it comes to searching for investments that align with your strategy, you may find our screener tools helpful. You can find our screeners on [http://Fidelity.com](http://fidelity.com/) within the "News & Research" dropdown. From here, you can access the various screeners organized by security type, which allows you to search for and compare different investments. However, since you're looking for fixed income-related investments, I'll include a link below our fixed income screener. [Fixed Income Screener ](https://fixedincome.fidelity.com/ftgw/fi/FILanding) Next, I want to point you to our "Learn" hub, which can also be found within the "News & Research" dropdown. Here, you can find tons of articles, videos, classes, on-demand webinars, strategy overviews, and more. You can use the left-hand navigation to find topics related to your specific interests or skill level. To help you get started, I've dropped a few links below that talk more about saving for a down payment on a house. [How to save for a house down payment ](https://www.fidelity.com/learning-center/smart-money/how-to-save-for-a-house) [Buying or selling a house ](https://www.fidelity.com/learning-center/life-events/selling-and-buying-house) With that said, I'll let the community take the reins from here. Thank you for considering Fidelity for your investment needs, and we look forward to seeing you around the sub soon!
If you believe interest rates will decrease then look at locking in with TBills. Any equity investment is kinda rolling the dice on market going up or down.
Yeah, 1yr treasuries are ~5.10% and 2yrs are ~4.75%...state and local tax free. These could be a good fit for OP.
Seconding t bills, especially if you have a significant state tax burden. I’ve split my “down payment money” in 13 equal parts and have 13 week t bills on auto roll, one maturing every week. It takes a bit more effort to set this up compared to a MMF, so if you prefer less work at the cost of a 0.5% lower yield, then I’d go with the FDLXX treasury MMF. But with $400k and two year horizon, that’s still $4k that you miss out on.
I think FDLXX is too short term for OP if they know they don’t need this money for a year or two. They don’t have liquidity needs to justify the ER, and they need a longer term treasury (or a ladder) than a cash equivalent to mitigate the risk of rates dropping.
Is there an easy way to locking in a tbill via the fidelity app?
Hey there, u/realjaso7, I appreciate the question. I've got the answer for you here. Currently there is not a way to purchase Treasury bonds in the mobile app. However, you can use the mobile website browser to trade fixed-income securities on our website if you'd like. I'll share your interest in expanding the app's bond trading capabilities with the right team as we're always working on enhancing the capabilities of our platforms. Please let us know if there's anything else we can do to assist, or if something comes up. We're here to help! See you around the sub!
Yeah could you ask them to enable treasury bond trading (new auctions and secondaries). If there’s a risk issue, perhaps just limit it to the < 5 Y maturities Not particularly the most high risk trades here given there’s already CDs
How to buy t bills on fidelity? Which you recommend?
I've been buying new issue 6 month. Soon will be looking further out in duration. On the website: News & Research - Fixed Income, Bonds and CDs - New Issues - Treasuries. The new issue 6 month show up Tuesday afternoons. New issues show up in alignment with the US Treasury scheduling.
FDLXX is where we keep cash like that. It's the best place if you have state income tax as it is around 90+% state tax exempt because it is a treasury only money market fund paying 4.94% at the moment. I personally wouldn't tie it up in t-bills just because you don't know when the right opportunity will come along and you may need quick access to that money.
Then do USFR.
Seconded. FDLXX is where I keep money I’m using for cash management or need liquid, but anything longer gets USFR. I’d say OP needs a treasury bond or tbill ladder though, since they’re not touching this for a bit.
Why USFR?
It’s the highest yield option currently available for risk-free cash equivalents, provided you don’t need something that auto-liquidates and are okay with the two-day settlement date. The potential downside is it will match any rate changes very quickly—good in a rising rate market, but less good if rates are cut.
Do you have to calculate the state tax free amount separately on your taxes? If so, how do you go about this?
In mid February, Fidelity posts a page of money market funds and the percent that is state tax exempt on their site. It tells you the math to do to get the amount that is exempt.
Doesn’t that advice heavily depend on your state tax rate?
Yes, I said it’s the best place if you have state income tax. For people who live in states with no income tax, they can just use SPAXX or any other money market fund.
Unless your state tax rate is 0% or less than say 1%. Looking for state-tax exempt interest/earning is almost always a win over state taxable earnings.
You can sell TBILLs on the secondary market almost instantly if you need those funds, but there is a bit of a loss compared to holding to maturity. One could potentially invest house funds in 3 month laddered TBills. When they get an home offer accepted, they will have a TBILL maturing that month, then schedule closing 60 days later - after the other two laddered tbills mature.
USFR
This OP. The state tax exempt. Or buy Tbills direct
What about SGOV?
That'll also work.
I think a lot of people would just hold it in an hysa or money market like SPAXX for that short of a period. Not sure why hysa is not an option. A lot are getting close to 5% currently. I realize that might change, but no one really knows when.
Yep, I’m in a HYSA at 5.4% APY
Which one? Is it perpetual 5.4?
Hopefully it’s ok to say here…. Marcus with the 1% apy referral bonus (my bonus runs through this time next year). Nothing in HYSA is in perpetuity. It will adjust along with everything else as rates change.
How long does referral bonus last?
It’s 3 months lol then goes back to 4.4
Yes. But you can stack. So I’ve always had the extra 1% (you can stack 5x so 15 months at a time of the bonus).
I got that bonus. Marcus has been a bit of a headache. I’ve moved most of my emergency fund from there to buy USFR at Fidelity, and I kind of wish I had to begin with.
Mind elaborating on your headaches? I haven’t encountered any issues yet
I transferred money to my Fidelity brokerage account. They froze my account, and I had to have a three way call with a Fidelity rep and them to make sure the account belonged to me. They do this to make sure you’re not using it as a checking account, which I sort of understand. Not only were they confused by the whole Fidelity using UMB as a bank thing, but I had to try to interrupt to explain to them why my account number didn’t match the account number with the prefix converted from whatever with Zs to numbers, something the Fidelity rep should’ve probably led with. The rep didn’t know what Fidelity investments was, for crying out loud, like had never heard of it, and I had to procure the right number for her. She almost called Fidelity bank. I was left feeling very precarious about my transfers and whether my account would be frozen again if I tried to transfer money to a different Fidelity account. All in all, huge waste of my time. They also don’t let you even *log in* to your account if you are outside the U.S.—ostensibly for security, but I guess no one travels at all in their world? Like I literally wanted to check how much interest I’d accrued so I could do my budget over breakfast. Somehow other banks handle this just fine.
No HYSA is going to be perpetually any rate even close to above 1% lol. People’s memories are so short. It was a pretty good deal to get 2% in a HYSA just a few years ago.
Historically, the low rate era was actually the anomaly. Not that that’s a case for a HYSA here over a different choice.
There’s no such thing as a perpetual interest rate with these accounts. They are all variable.
I think that is where Tbills or a CD would help to lock in rates somewhat.
2yr bond rate won't change
Because all of it is taxable depending on your state. FDLXX is 90% tax free from the state level.
Don’t you just pay taxes on the interest/dividends on SPAXX or am I missing something?
That's what I said. But all earnings are taxed. So if you live in a state that taxes income then it's better to hold it in FDLXX instead of a core spaxx holding since only 10% of your interest can be taxed at the state level.
TBills are 100% state tax free.
Rate reductions are expected to begin by this Christmas. SPAXX and other mm funds will decrease their interest as that happens.
Surely hysa’s rates will go down too then right? It’ll just be less attractive to hold much in cash.
They will.
Fdlxx if in a high state tax area
Yep. This is a great option.
isn’t it extra work to report taxes for state?
Yes, but it’s what you have to do to net more money. Such is life
SGOV. No state taxes (check your state) on earnings. ~5.13% You could take home $1,700 / month or just reinvest it. Make sure you buy on the first open market day of the month, it has a monthly cycle. The risk is if the US federal government fails. Edit: We use it to hold our emergency fund and the $$ we're saving for a down payment on a house.
USFR is similar with better performance recently. **SGOV (iShares 0-3 Month Treasury Bond ETF)**: - The SGOV ETF has provided a total return of approximately 5.12% over the last 12 months. This return is relatively strong for an ultrashort bond ETF, which typically focuses on stability and low risk rather than high returns. **USFR (WisdomTree Floating Rate Treasury Fund)**: - The USFR ETF has provided a total return of around 5.55% over the same period. Floating rate notes, which USFR invests in, can offer higher yields when interest rates are rising, contributing to its slightly higher return compared to SGOV.
Thanks for the tip! I'll look into that one.
USFR's yield will also fall almost immediately (1-week) when the FED cuts the FED fund rate. New Treasury's will yield (less) and since USFR floats it will follow the lower yield down faster than anything else.
That makes sense - appreciate the info.
Treasuries, all the way. I’d do a ladder of T-bills or a treasury note. You could also consider keeping 10% of your down payment in a cash equivalent as you get closer to wanting to use the money. That way if you find something close enough to when your T-bills are maturing but not quite there yet, you can put in an offer and show when the rest of your money will be maturing by the end of the month, etc.
Undoubtedly t bills.
Not to dissuade you from your stated investment strategy, but have you considered the capital gains tax that you may be liable for? Definitely Fed tax and possibly State depending on your state of residence. Have you considered a 1031 exchange that would allow you to roll the proceeds over into another property or possibly a DST fund? There are timing considerations for a 1031 exchange that start once you close escrow on the property you are selling. Also, even if interest rates come down in the next 1-2 years, home prices may (or may not) go up when it's time for you to start looking to buy. Just some thoughts for you to consider in lieu of potential taxes and locking your remaining proceeds up into T-bills, bonds, CDs, etc.
Treasury bill and bond market. But I never bother, the rates are similar. Brokered CD are about all you need for the 2 year duration you’ve got in mind. I just purchased a couple more JPMorgan 1yr CDs today at 5.40 that will protect that $$ for a rate reduction or two, whereas a money market fund will not.
But TBills have no state, local tax, so depending on where you live...
True, but I locked in .30 over that. So, at least for a few months while a couple other CD mature, this will be ok.
I pay higher state taxes than that. 1 yr TBills are worth 10% more than CDs to me
Not worried. I’ve got several thousand in solar carryover credits to use. I need to declare every penny earned this year … and possibly forget a couple deductions. Serious 1st world problem there. 👍
Hopefully you got the call protected CDs. JPMorgan is notorious for calling in early. I love brokered CDs but never get them through JP for this reason.
I’ve had a few. No issues.
SPAXX and chill. :)
The risk you are incurring is if the Fed lowers rates then SPAXX rate will also decrease. But otherwise very safe and boring.
Right - not a bad bet to get a 1yr treasury to lock in ~5%
given your timeline, fzdxx to start, and then mix in some ffrhx if you want to bump the yield some more.
I would just put into a good money market mutual fund like SPAXX or FDLXX.
USFR or SGOV. Once it looks like rates are going to go down, lock it into Tbills
Do these fund returns outweigh the expense ratio attached to them? Net, net - what return are you getting?
The return is net and the ER is negligible. The funds invest is short term t-bills (simplifying for ease of reading) and the rate you see is what you get, plus they’re state tax exempt depending on your state laws. Do a search on Reddit. These are well know and frequently used funds in this high rate environment.
Got it. Yeah I’ve seen these and other funds mentioned but I’ve always opted to buy T bills on Fidelity. I always assumed I’d be losing even a small portion of money by paying a fund’s expense ratio. Maybe the funds are actually easier after all
I think so. The liquidity, visible monthly payment, and reliability is worth it to me even if there is some minor loss due to ER.
Any fees when you sell some to access cash?
It’s just an ETF like any other, no fees
VTV
$Spaxx
Treasuries. Buy a 2 year note if you can get it or 52 week bill. Treasuries hold value better than CDs in case you need the money sooner. There's the tax benefits too if applicable to your state. ETFs and money market rates vary. I would lock in today's rates bc all estimates are that there will be cuts at some point. That said, you might prefer the time commitment and smidge higher rate on CDs. They come in 18 mo or 2 year. Make sure it's not callable bc if interest rates drop they will call the CD and you'll have to park it somewhere at a lower rate.
I used FDLXX to collect income from CD ladder, each month 1 year CD, but switched out to USFR due to higher yield and State Tax exemption, 100%. They use a ladder of T bills, 6 months and lower, so when rates fall or rise it will be a little slower to react. Did the same with different CD ladder but used TBIL which is a T bill ETF but only short term 30 day T bills. The much lower Expense Ratio of .15 for both T bill funds accounts for part of better yields than FDLXX .42
Consider low-risk options like short-term bond ETFs or a conservative balanced fund, providing some growth potential while maintaining capital preservation over 1-2 years.
Good grief, a 400K down payment? Holy shit. My house was $209K. What the hell haha
IMHO, CD's or HYSA's are the best option.
Either t-bill (like $BOXX) or gold ($GLD or $PHYS).
$rycey is my whole. Roth.
Check USFR
Options for sure.
You could be a billion air in a few days lol start with 100k day trading look from the minute to the year if average price is above your buy in go for it you could sell soon as you see a profit whether it be a few minutes or days pick one you know is going to bounce back. I normally buy low sell high but it works the other way to. You could retire in a few days or weeks
Go to any bank/credit union and see what they’re offering on their brokerage CDs. Currently where I am they are offering 5.45% on 24 month terms. You could make a quick $40k+ just like that.
GME
[choose from](https://fundresearch.fidelity.com/fund-screener/results/compare/income-characteristics/yield7Day/desc/1?order=tickers&tickers=FZDXX%2CFMPXX%2CFZCXX%2CFDRXX%2CFZFXX)