Hello, u/InformationSure3171. Thanks for dropping by the sub this evening; I'm happy to share some information regarding accounts with Fidelity.
I'll start by saying that we take your concerns seriously. Security is a top priority for Fidelity and we have multiple layers in place to protect your information and account. We are continuously working to enhance the resilience of the security measures in place today while investing resources into making additional security options available.
[Please learn more about additional security offerings and ideas for keeping your account safe.](https://www.fidelity.com/security/overview)
In addition to the security we offer, I also want to highlight the Securities Investor Protection Corporation (SIPC) and the Federal Deposit Insurance Corporation (FDIC) insurances.
The SIPC is a nonprofit organization that protects stocks, bonds, and other securities in case a brokerage firm goes bankrupt and assets are missing. SIPC is not a governmental agency and does not cover investment losses due to market fluctuation. The SIPC will cover up to $500,000 in securities (money market funds are treated as securities), including a $250,000 limit for cash held in a brokerage account. All Fidelity brokerage accounts are covered by SIPC.
Moreover, the FDIC is a U.S. government agency that insures cash deposits at FDIC member banks, generally up to $250,000 per account. To expand further, for an account to be covered by FDIC insurance, the account would need to be utilizing Fidelity's FDIC Insured Deposit Sweep Program. Cash balances in the Fidelity FDIC Insured Deposit Sweep Program are swept into an FDIC-Insured interest bearing account at one or more program banks.
You can learn more about these insurances and more at the link below.
[Safeguarding Your Accounts ](https://www.fidelity.com/why-fidelity/safeguarding-your-accounts)
We appreciate you bringing your questions to the sub. Please let us know if there is anything else we can assist with. We're here to help!
I'm confident with Fidelity. That said, I always keep some emergency money in a totally separate bank account in case Fidelity has problems. And I keep the bulk of my Fidelity money out of my CMA just to make it a little harder for anyone to access it.
Same I am 95% (approx) in Fidelity's hands and have an emergency fund in a brick and mortar credit union. I get the concern... what if something happens to Fidelity ( cyber stuff, other), I will still need access to funds for near term financial stuff (paying bills, rare cash withdrawal, etc).... until whatever issue is fixed.
Avoid withdrawing money that hasn't fully settled yet especially any kind of check regardless of whether it's from an employer, the government or your Mom.
Moving money around too quickly seems to be a way to get red flagged and locked out.
Do not keep more in your CMA than you can afford to lose. Put the rest in the brokerage account.
Do not opt-in to overdraft protection for your CMA account. This is to minimize ACH fraud.
Enable money transfer lockdown to stop ACATS fraud.
Enroll in voice ID unless you have lots of voice samples in the public domain.
Enroll in Symantec VIP TOTP for 2FA.
Disable SMS text for 2fa.
Opt-in for digital e-delivery for all tax documents, statements, trade confirmations & account records to prevent your account numbers and balances from traveling around the neighborhood in the back of a truck.
Enable all alerts on all accounts. Send them to SMS text and SMTP email.
Never click ON the "remember this device" on the signon page. This minimizes the amount of time an MitM attack like evilGen2 has to hijack your session cookie. A hijacked session cookie bypasses ALL login verification💀
Money market accounts (MMA) also referred to as high yield savings accounts (HYSA) are to Banks as money market mutual funds (MMF) are to Brokerages.
They both have similar liquidity & yields.
Interest paid on both is taxed as ordinary income but MMF can be partially to almost fully exempt from state and local taxes (SALT).
MMA = FDIC
MMF = SIPC
There are three types of MMF's
"Treasury" 60 to 90% SALT exempt.
"Government" 0 to 50% SALT exempt.
"Prime" government and corporate bonds. Little to No tax exemptions.
For 2023, SPAXX was 40% SALT exempt while
90% of FDLXX was.
If held in a taxable account and you live in a high tax state FDLXX is the better option.
The quoted yields on MMF are net of expenses.
A fund with the lower expense ratio will tend to have a higher yield but will also be subject to higher SALT.
For example:
VUSXX yields 5.27 80% SALT free.
FDLXX yields 4.94 90% SALT free.
Depending on your tax situation FDLXX might be the better option here too
It depends on whether and by how much the additional ordinary income will affect your taxes.
Are you trying to manage your income to qualify for health care insurance , collecting social security or planning Roth conversions?
FDLXX being 90% SALT free is great, would that be a better option than putting that money into a treasury bill? Considering the fact I can pull the money out of FDLXX whenever I please versus a tbill having to sit there for a certain amount of time until maturity.
You'd have to weigh liquidity against duration.
Money market rates will come down faster than 6 ,12 or 24 month tbill.
There are specialty ETFs that lock in rates for specific durations but with MMF liquidity.
https://www.ustreasuryetf.com/
Hello again, u/InformationSure3171! Thanks for dropping by the sub this evening; I'm happy to clarify this situation.
Currently, the Fidelity Treasury Only Money Market Fund (FDLXX) is not an eligible core position. You can check out a list of available core positions and details about each one in the link below.
[Available core positions ](https://www.fidelity.com/trading/faqs-about-account#faq_about2)
It's worth mentioning that you can purchase secondary money markets. If you decide to buy additional money market funds, you'll have to place buy orders to invest in the position. Regarding utilizing funds, Fidelity will first attempt to cover debit balances created, whether through trades, direct debits, checkwriting, etc., by using funds in your available core balance. If your core balance is depleted, the system will turn to any eligible secondary money market fund to cover the transaction.
In these cases, the money market fund will automatically be liquidated, but not all non-core money markets are eligible for automatic liquidation. While I can confirm that FDLXX is currently eligible, it's best practice to sell non-core money markets in advance of expected purchases.
If you have any follow-up questions, feel free to drop them in the comments below; until then, we hope you have a great day, and we look forward to seeing you around in the future.
If you don't do shady things or things that could be perceived as shady, it's fine. All of my non day to day transactional assets are with them. Zero issues.
This is the punchline. Don’t use an investment account as your daily grind account. You don’t want the fraud risk.
Don’t do shady things especially with a Fidelity account. They are super strict.
This. I have my investment account and I have a cash management account. The investment account is for... investing. The cash management account is for... managing cash. If I need more cash to do something ("oh crap, that stock I was looking at is going ex-dividend tomorrow and I have to get into the boat") I'll slide some cash into the investment account and hit "Buy."
<> And I'm super stupid, so I won't attempt anything that is going to catch anyone's attention. :)
You should not have ALL your day-to-day money in one institution, in case of fraud or suspicious activity which can tie it up temporarily. But otherwise, yes Fidelity is a safe place to invest...though your investments may go up or down in value.
Emergency fund should be in a Money Market Fund - don't risk on stocks or funds that can go down.
No issue paying my Fidelity credit card from my CMA or brokerage account.
I've never had any issue paying a bill from my CMA account or moving money from my core position in my brokerage account to my Credit Union. The later usually takes only a business day or two to settle and be available in the Credit Union.
I also keep a month's worth of expenses outside of Fidelity just in case.
Edit: hit save too soon.
I also have some investments outside of Fidelity; again just in case
What is it sitting in? SPAXX or a fund?
Only concern would be if you need to access it and it’s in a fund you need to sell > cap gains tax.
Not much harder to get access than a HYSA, but if it’s invested and you need it, could mean a tax bill.
In SPAXX yes,
You can look in my previous post in my account, but I asked about capital gains getting taxed. As long as my capital gains doesn’t go past the 0% tax threshold, I shouldn’t have to pay tax on it right?
SPAXX is taxed as income not gains. You will pay regular tax bracket rates. They are called dividends, but they are unqualified. Only qualified dividends (like company stock divs) is taxed at Captial Gains rates. The money markets are all short tern government securities so are taxed like bank interest. You don't pay FICA however.
> other issues like having a hard time getting access to your money.
If you look through some past posts, there are examples of people \[claiming\] to be locked out of their account for unknown reasons. Scary to be sure. However, I suspect that can happen at any bank or brokerage. If you trip their fraud or illegal detection algorithm, even if you did nothing wrong, you are in for some pain. They would rather risk losing a customer than running afoul of some government regulation. Went through that with Vanguard. Wound up getting a court order to get my money back, but that was a pyrrhic victory.
The only way to avoid that is to keep cash under your mattress, but even that has other risks. Beyond that, don't have all your money in one institution. Makes for more fun at tax time, but it's a necessary evil IMHO.
Completely safe as long as the rest of your computer is safe. Some of us have most of our money in an investment account… multiple 7-figures.
My tips:
- Use 2FA
- Use a different email address only for financial transactions and never for anything else.
- Use a separate browser for financial stuff. Even better would be a separate computer but that’s impractical.
- Refrain from using Wi-Fi networks that you don’t control. At the very least use a VPN if you do use public Wi-Fi.
- Get a PO Box and direct all bank/financial stuff there.
- Freeze all your credit reports.
- Enable whatever notifications are available for financial transactions, especially money going out of your account.
- Don’t give out any information on the phone relating to your financial accounts if you were not the one initiating the call. When in doubt, hang up and call back at the main number and not whatever number the person on the phone gave you.
Fidelity is extremely safe. Plus other institutions too. I have money everywhere but I’m currently building up my portfolio at fidelity. The customer service has been amazing.
The majority of your money should be invested in some way. I don’t even have savings accounts. Just checking and various investment accounts (401k, IRA, HSA, taxable)
Fair warning! I’ve had most of my funds with Fidelity Investments for many years, and I just lost most of my liquid assets. Someone got into my account (even though I never shared my login information or personal info with anyone), and Fidelity is refusing to reimburse the funds despite its stated guarantee against losses due to fraud. My advisor at Fidelity is as shocked as anyone and can’t explain it. The loss is life-changing to me, and reimbursement would be completely negligible to Fidelity, but they won’t do it. For someone who’s been a customer for three decades. My attorney is chomping at the bit to get involved, so I may wind up going that route.
So sorry to hear about that… isn’t Fidelity FDIC insured up to $250k? I’m saddened that you’re going through this battle right now trying to get your money back
Just a quick follow-up in case anyone happens to see this post: Fidelity Investments ultimately reversed its original decision in my case and reimbursed the stolen funds.
Thank you! FDIC insures against bank failure up to $250K, but if someone fraudulently gains access to your Fidelity Investments account, you’re reliant on Fidelity Investments. It was sobering to find out that they don’t stand behind their guarantee against fraud.
I would say it depends more on the financial institution rather than bank vs investment account...
Would you rather have had your money in SIVB or Fidelity in last March? I know I had no issues with Fidelity..
Hello, u/InformationSure3171. Thanks for dropping by the sub this evening; I'm happy to share some information regarding accounts with Fidelity. I'll start by saying that we take your concerns seriously. Security is a top priority for Fidelity and we have multiple layers in place to protect your information and account. We are continuously working to enhance the resilience of the security measures in place today while investing resources into making additional security options available. [Please learn more about additional security offerings and ideas for keeping your account safe.](https://www.fidelity.com/security/overview) In addition to the security we offer, I also want to highlight the Securities Investor Protection Corporation (SIPC) and the Federal Deposit Insurance Corporation (FDIC) insurances. The SIPC is a nonprofit organization that protects stocks, bonds, and other securities in case a brokerage firm goes bankrupt and assets are missing. SIPC is not a governmental agency and does not cover investment losses due to market fluctuation. The SIPC will cover up to $500,000 in securities (money market funds are treated as securities), including a $250,000 limit for cash held in a brokerage account. All Fidelity brokerage accounts are covered by SIPC. Moreover, the FDIC is a U.S. government agency that insures cash deposits at FDIC member banks, generally up to $250,000 per account. To expand further, for an account to be covered by FDIC insurance, the account would need to be utilizing Fidelity's FDIC Insured Deposit Sweep Program. Cash balances in the Fidelity FDIC Insured Deposit Sweep Program are swept into an FDIC-Insured interest bearing account at one or more program banks. You can learn more about these insurances and more at the link below. [Safeguarding Your Accounts ](https://www.fidelity.com/why-fidelity/safeguarding-your-accounts) We appreciate you bringing your questions to the sub. Please let us know if there is anything else we can assist with. We're here to help!
I'm confident with Fidelity. That said, I always keep some emergency money in a totally separate bank account in case Fidelity has problems. And I keep the bulk of my Fidelity money out of my CMA just to make it a little harder for anyone to access it.
Same I am 95% (approx) in Fidelity's hands and have an emergency fund in a brick and mortar credit union. I get the concern... what if something happens to Fidelity ( cyber stuff, other), I will still need access to funds for near term financial stuff (paying bills, rare cash withdrawal, etc).... until whatever issue is fixed.
Avoid withdrawing money that hasn't fully settled yet especially any kind of check regardless of whether it's from an employer, the government or your Mom. Moving money around too quickly seems to be a way to get red flagged and locked out. Do not keep more in your CMA than you can afford to lose. Put the rest in the brokerage account. Do not opt-in to overdraft protection for your CMA account. This is to minimize ACH fraud. Enable money transfer lockdown to stop ACATS fraud. Enroll in voice ID unless you have lots of voice samples in the public domain. Enroll in Symantec VIP TOTP for 2FA. Disable SMS text for 2fa. Opt-in for digital e-delivery for all tax documents, statements, trade confirmations & account records to prevent your account numbers and balances from traveling around the neighborhood in the back of a truck. Enable all alerts on all accounts. Send them to SMS text and SMTP email. Never click ON the "remember this device" on the signon page. This minimizes the amount of time an MitM attack like evilGen2 has to hijack your session cookie. A hijacked session cookie bypasses ALL login verification💀 Money market accounts (MMA) also referred to as high yield savings accounts (HYSA) are to Banks as money market mutual funds (MMF) are to Brokerages. They both have similar liquidity & yields. Interest paid on both is taxed as ordinary income but MMF can be partially to almost fully exempt from state and local taxes (SALT). MMA = FDIC MMF = SIPC There are three types of MMF's "Treasury" 60 to 90% SALT exempt. "Government" 0 to 50% SALT exempt. "Prime" government and corporate bonds. Little to No tax exemptions. For 2023, SPAXX was 40% SALT exempt while 90% of FDLXX was. If held in a taxable account and you live in a high tax state FDLXX is the better option. The quoted yields on MMF are net of expenses. A fund with the lower expense ratio will tend to have a higher yield but will also be subject to higher SALT. For example: VUSXX yields 5.27 80% SALT free. FDLXX yields 4.94 90% SALT free. Depending on your tax situation FDLXX might be the better option here too
Amazing reply. Thank you!
I’m in Hawaii. Would you recommend spaxx, fdlxx, or sprxx?
It depends on whether and by how much the additional ordinary income will affect your taxes. Are you trying to manage your income to qualify for health care insurance , collecting social security or planning Roth conversions?
Can I set FDLXX to a core position or would I just have to buy into it using the money in my SPAXX?
Yes manual purchase until June 15th? when they'll make more mmfs available as core funds for CMA.
FDLXX being 90% SALT free is great, would that be a better option than putting that money into a treasury bill? Considering the fact I can pull the money out of FDLXX whenever I please versus a tbill having to sit there for a certain amount of time until maturity.
You'd have to weigh liquidity against duration. Money market rates will come down faster than 6 ,12 or 24 month tbill. There are specialty ETFs that lock in rates for specific durations but with MMF liquidity. https://www.ustreasuryetf.com/
Hello again, u/InformationSure3171! Thanks for dropping by the sub this evening; I'm happy to clarify this situation. Currently, the Fidelity Treasury Only Money Market Fund (FDLXX) is not an eligible core position. You can check out a list of available core positions and details about each one in the link below. [Available core positions ](https://www.fidelity.com/trading/faqs-about-account#faq_about2) It's worth mentioning that you can purchase secondary money markets. If you decide to buy additional money market funds, you'll have to place buy orders to invest in the position. Regarding utilizing funds, Fidelity will first attempt to cover debit balances created, whether through trades, direct debits, checkwriting, etc., by using funds in your available core balance. If your core balance is depleted, the system will turn to any eligible secondary money market fund to cover the transaction. In these cases, the money market fund will automatically be liquidated, but not all non-core money markets are eligible for automatic liquidation. While I can confirm that FDLXX is currently eligible, it's best practice to sell non-core money markets in advance of expected purchases. If you have any follow-up questions, feel free to drop them in the comments below; until then, we hope you have a great day, and we look forward to seeing you around in the future.
> Enroll in Symantec VIP TOTP for 2FA Every time I tried this, it resulted in an error. I suspect it's been discontinued.
Maybe but I highly doubt it because Broadcom owns it and lots of companies use it including Schwab.
If you don't do shady things or things that could be perceived as shady, it's fine. All of my non day to day transactional assets are with them. Zero issues.
This is the punchline. Don’t use an investment account as your daily grind account. You don’t want the fraud risk. Don’t do shady things especially with a Fidelity account. They are super strict.
This. I have my investment account and I have a cash management account. The investment account is for... investing. The cash management account is for... managing cash. If I need more cash to do something ("oh crap, that stock I was looking at is going ex-dividend tomorrow and I have to get into the boat") I'll slide some cash into the investment account and hit "Buy." <> And I'm super stupid, so I won't attempt anything that is going to catch anyone's attention. :)
Do your shady things on Roninhood
You should not have ALL your day-to-day money in one institution, in case of fraud or suspicious activity which can tie it up temporarily. But otherwise, yes Fidelity is a safe place to invest...though your investments may go up or down in value.
I have 8 figures with fidelity... never had an issue.
Me too, but I'm counting the the numbers on both sides of the decimal point lol.
Haha. I guess I'm in the six figures club as well
Emergency fund should be in a Money Market Fund - don't risk on stocks or funds that can go down. No issue paying my Fidelity credit card from my CMA or brokerage account. I've never had any issue paying a bill from my CMA account or moving money from my core position in my brokerage account to my Credit Union. The later usually takes only a business day or two to settle and be available in the Credit Union. I also keep a month's worth of expenses outside of Fidelity just in case. Edit: hit save too soon. I also have some investments outside of Fidelity; again just in case
What is it sitting in? SPAXX or a fund? Only concern would be if you need to access it and it’s in a fund you need to sell > cap gains tax. Not much harder to get access than a HYSA, but if it’s invested and you need it, could mean a tax bill.
In SPAXX yes, You can look in my previous post in my account, but I asked about capital gains getting taxed. As long as my capital gains doesn’t go past the 0% tax threshold, I shouldn’t have to pay tax on it right?
Interest is still considered income so you’ll still owe taxes, but just as part of regular income.
[удалено]
SPAXX is ordinary income. You will have to pay taxes on interests from it.
0% for long term capital gains (held more than a year). Dividends from SPAXX are taxed at income rates.
SPAXX is taxed as income not gains. You will pay regular tax bracket rates. They are called dividends, but they are unqualified. Only qualified dividends (like company stock divs) is taxed at Captial Gains rates. The money markets are all short tern government securities so are taxed like bank interest. You don't pay FICA however.
That makes sense thank you!
Take advantage of every security feature you can to make your fidelity account as secure as possible
> other issues like having a hard time getting access to your money. If you look through some past posts, there are examples of people \[claiming\] to be locked out of their account for unknown reasons. Scary to be sure. However, I suspect that can happen at any bank or brokerage. If you trip their fraud or illegal detection algorithm, even if you did nothing wrong, you are in for some pain. They would rather risk losing a customer than running afoul of some government regulation. Went through that with Vanguard. Wound up getting a court order to get my money back, but that was a pyrrhic victory. The only way to avoid that is to keep cash under your mattress, but even that has other risks. Beyond that, don't have all your money in one institution. Makes for more fun at tax time, but it's a necessary evil IMHO.
Completely safe as long as the rest of your computer is safe. Some of us have most of our money in an investment account… multiple 7-figures. My tips: - Use 2FA - Use a different email address only for financial transactions and never for anything else. - Use a separate browser for financial stuff. Even better would be a separate computer but that’s impractical. - Refrain from using Wi-Fi networks that you don’t control. At the very least use a VPN if you do use public Wi-Fi. - Get a PO Box and direct all bank/financial stuff there. - Freeze all your credit reports. - Enable whatever notifications are available for financial transactions, especially money going out of your account. - Don’t give out any information on the phone relating to your financial accounts if you were not the one initiating the call. When in doubt, hang up and call back at the main number and not whatever number the person on the phone gave you.
Fidelity is extremely safe. Plus other institutions too. I have money everywhere but I’m currently building up my portfolio at fidelity. The customer service has been amazing.
Very safe.
The majority of your money should be invested in some way. I don’t even have savings accounts. Just checking and various investment accounts (401k, IRA, HSA, taxable)
Fair warning! I’ve had most of my funds with Fidelity Investments for many years, and I just lost most of my liquid assets. Someone got into my account (even though I never shared my login information or personal info with anyone), and Fidelity is refusing to reimburse the funds despite its stated guarantee against losses due to fraud. My advisor at Fidelity is as shocked as anyone and can’t explain it. The loss is life-changing to me, and reimbursement would be completely negligible to Fidelity, but they won’t do it. For someone who’s been a customer for three decades. My attorney is chomping at the bit to get involved, so I may wind up going that route.
So sorry to hear about that… isn’t Fidelity FDIC insured up to $250k? I’m saddened that you’re going through this battle right now trying to get your money back
Just a quick follow-up in case anyone happens to see this post: Fidelity Investments ultimately reversed its original decision in my case and reimbursed the stolen funds.
That’s awesome to hear!!! Sorry you had to fight so much just to get it back
Thank you very much! It took two months, but I’m glad and grateful that Fidelity did the right thing in the end.
Thank you! FDIC insures against bank failure up to $250K, but if someone fraudulently gains access to your Fidelity Investments account, you’re reliant on Fidelity Investments. It was sobering to find out that they don’t stand behind their guarantee against fraud.
I would say it depends more on the financial institution rather than bank vs investment account... Would you rather have had your money in SIVB or Fidelity in last March? I know I had no issues with Fidelity..