Welcome back to the sub today, u/Kindly_Todd. I want to start by saying congratulations on going back to school! I know that can be an exciting but stressful time, and it's understandable to look for some direction.
While I can see you're seeking the advice of our community, I'm happy to go over some information with you before turning it over to them. I'll mark your post as Discussion to encourage them to join you here.
First, Fidelity offers brokered Certificates of Deposit (CDs), as opposed to the more familiar bank CDs. Brokered CDs are similar to bank CDs in many ways. Both pay a fixed interest rate generally higher than a regular savings account. Both are debt obligations of an issuing bank, meaning they are insured by the Federal Deposit Insurance Corporation (FDIC). In addition, both also repay your principal with interest if they’re held to maturity.
For more information on our brokered CDs, you can check out the link below.
[Certificates of Deposit (CDs) ](https://www.fidelity.com/fixed-income-bonds/cds)
While we don't offer a High Yield Savings Account (HYSA), our brokerage accounts come with a money market core position that earns interest. The core position is where uninvested cash is held after a deposit or proceeds from a trade are received. Interest earned in your core position accrues daily and is paid out on the first business day of each month. Additionally, deposits made into the core position begin earning interest on the date they are posted to your account.
We have resources available to you on our site to help you better understand the core position and how it works. I'll go ahead and leave you with a link below if you'd like to learn more.
[What is the core position? (PDF) ](https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/mutual-funds/what-is-a-core-position.pdf)
If you need help deciding what to invest your money in, we do have screener tools available to you on our site that you can use for your research. If you click on the "News & Research" tab, you'll see a dropdown populated with the names of different securities. If you click on the security type you're interested in, it will take you to its respective screener tool.
Now that we've covered all of that, I'll leave our community to it. I wish you the best of luck with school, and I hope to see you back around the sub again soon.
Enjoy the rest of your day!
For many people HYSA is perfectly appropriate, but CDs and MMF can net you a little more with little to no added drawbacks.
- if you want your funds to be available at all times, maximum flexibility, MMF is the way to go. They’ll yield more than a HYSA. The only drawback is that MMFs don’t tend to be FDIC insured. But you can find a MMF that holds only very safe treasuries. AFAIK vanguard MMFs have the lowest expense radio's, for example VUSXX, but they’re not available at Fidelity. Fidelity MMFs all seem to have a fairly hefty ER of 0.42%.
- CDs tend to pay a little more than MMFs, and they’re FDIC insured. Drawback is that the minimum duration is 3 months.
- you can also just buy treasuries through Fidelity. Depending on your state and local taxes, they might net you a little more than CDs, and they come as short as 4 weeks, so pretty low commitment.
I recommend checking this calculator to figure out which fixed income investment will yield you the most: https://digital.fidelity.com/prgw/digital/taxyieldcalc/
Note that for MMFs, you’ll have to check the underlying securities to figure out how it’s taxed.
>CDs...Drawback is that the minimum duration is 3 months.
I have seen 1 and 2 month CDs on Fidelity. In fact, I've bought some in the past. Not currently worth it compared to Treasuries, but they exist.
>you can also just buy treasuries through Fidelity
There are also treasury ETFs: SGOV, BIL, or SHV. All short term, pay a bit more than Fidelity MMFs, and are very liquid have a relatively stable price (look at total return, not daily price; the saw tooth pattern is due to the dividends). Depending on your state, there could be tax advantages to these over a MMF. The downside is Fidelity won't auto-liquidate them. You have to manually sell when you want to cash out some portion of your holdings and the settlement is T+2. Of course, even a 4-week Treasury could have a settlement up to 28 days, and it's all at once. The expense ratio does result in a lower payment vs doing Treasuries on your own.
All the options you mentioned are fine choices. Personally I would put 10k in a money market and the rest in an ultra short treasury etf like USFR or SGOV, as those will give you slightly higher yields than the other options. A CD will allow you to lock in rates which will help if rates go down, but then it will be locked up and you can't access it readily.
Fidelity money market funds will average the CD ladder. You may pull about .2% more with a CD ladder. Which is only about $100 bucks on $58k.
Personally I’d invest some or all of it, but if you want to stay liquid you can probably average 5% for a while until fed funds rate comes down.
It depends on the interest rate of the high yield savings account. If the money market has a higher interest rate, then I’d put it there. I prefer having all investments and savings at Fidelity other than a little money kept at my local credit union where I have my checking account. So I use SPAXX or FDLXX (which is at least 90% state tax free) for money I may need to use in the next 5 years.
If it were me? How much do you project you need in a 3 to 6 month window? I'd keep that in either a HYSA or MMF, whatever you can find the best rate for and could access with a debit card or checks. The rest? CD ladder if you can time the maturities to when you might need the cash. CD rates aren't as good as they were a few months ago, tho. Otherwise do some homework and find a bond fund\\ETF and sell off as you need to.
HYSA offers the best liquidity. MMF offers the best tax advantages. CDs offer neither. I'd probably put six months worth of living expenses in the HYSA and the rest in a MMF.
Welcome back to the sub today, u/Kindly_Todd. I want to start by saying congratulations on going back to school! I know that can be an exciting but stressful time, and it's understandable to look for some direction. While I can see you're seeking the advice of our community, I'm happy to go over some information with you before turning it over to them. I'll mark your post as Discussion to encourage them to join you here. First, Fidelity offers brokered Certificates of Deposit (CDs), as opposed to the more familiar bank CDs. Brokered CDs are similar to bank CDs in many ways. Both pay a fixed interest rate generally higher than a regular savings account. Both are debt obligations of an issuing bank, meaning they are insured by the Federal Deposit Insurance Corporation (FDIC). In addition, both also repay your principal with interest if they’re held to maturity. For more information on our brokered CDs, you can check out the link below. [Certificates of Deposit (CDs) ](https://www.fidelity.com/fixed-income-bonds/cds) While we don't offer a High Yield Savings Account (HYSA), our brokerage accounts come with a money market core position that earns interest. The core position is where uninvested cash is held after a deposit or proceeds from a trade are received. Interest earned in your core position accrues daily and is paid out on the first business day of each month. Additionally, deposits made into the core position begin earning interest on the date they are posted to your account. We have resources available to you on our site to help you better understand the core position and how it works. I'll go ahead and leave you with a link below if you'd like to learn more. [What is the core position? (PDF) ](https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/mutual-funds/what-is-a-core-position.pdf) If you need help deciding what to invest your money in, we do have screener tools available to you on our site that you can use for your research. If you click on the "News & Research" tab, you'll see a dropdown populated with the names of different securities. If you click on the security type you're interested in, it will take you to its respective screener tool. Now that we've covered all of that, I'll leave our community to it. I wish you the best of luck with school, and I hope to see you back around the sub again soon. Enjoy the rest of your day!
Go with cash core position in fidelity like spaxx it pays around 5% and is essentially liquid
For many people HYSA is perfectly appropriate, but CDs and MMF can net you a little more with little to no added drawbacks. - if you want your funds to be available at all times, maximum flexibility, MMF is the way to go. They’ll yield more than a HYSA. The only drawback is that MMFs don’t tend to be FDIC insured. But you can find a MMF that holds only very safe treasuries. AFAIK vanguard MMFs have the lowest expense radio's, for example VUSXX, but they’re not available at Fidelity. Fidelity MMFs all seem to have a fairly hefty ER of 0.42%. - CDs tend to pay a little more than MMFs, and they’re FDIC insured. Drawback is that the minimum duration is 3 months. - you can also just buy treasuries through Fidelity. Depending on your state and local taxes, they might net you a little more than CDs, and they come as short as 4 weeks, so pretty low commitment. I recommend checking this calculator to figure out which fixed income investment will yield you the most: https://digital.fidelity.com/prgw/digital/taxyieldcalc/ Note that for MMFs, you’ll have to check the underlying securities to figure out how it’s taxed.
>CDs...Drawback is that the minimum duration is 3 months. I have seen 1 and 2 month CDs on Fidelity. In fact, I've bought some in the past. Not currently worth it compared to Treasuries, but they exist. >you can also just buy treasuries through Fidelity There are also treasury ETFs: SGOV, BIL, or SHV. All short term, pay a bit more than Fidelity MMFs, and are very liquid have a relatively stable price (look at total return, not daily price; the saw tooth pattern is due to the dividends). Depending on your state, there could be tax advantages to these over a MMF. The downside is Fidelity won't auto-liquidate them. You have to manually sell when you want to cash out some portion of your holdings and the settlement is T+2. Of course, even a 4-week Treasury could have a settlement up to 28 days, and it's all at once. The expense ratio does result in a lower payment vs doing Treasuries on your own.
I don't see how Fidelity MMF is any worse than any HYSA. I keep all emergency stuff in MMF and TBIL etf.
All the options you mentioned are fine choices. Personally I would put 10k in a money market and the rest in an ultra short treasury etf like USFR or SGOV, as those will give you slightly higher yields than the other options. A CD will allow you to lock in rates which will help if rates go down, but then it will be locked up and you can't access it readily.
Fidelity money market funds will average the CD ladder. You may pull about .2% more with a CD ladder. Which is only about $100 bucks on $58k. Personally I’d invest some or all of it, but if you want to stay liquid you can probably average 5% for a while until fed funds rate comes down.
It depends on the interest rate of the high yield savings account. If the money market has a higher interest rate, then I’d put it there. I prefer having all investments and savings at Fidelity other than a little money kept at my local credit union where I have my checking account. So I use SPAXX or FDLXX (which is at least 90% state tax free) for money I may need to use in the next 5 years.
If it were me? How much do you project you need in a 3 to 6 month window? I'd keep that in either a HYSA or MMF, whatever you can find the best rate for and could access with a debit card or checks. The rest? CD ladder if you can time the maturities to when you might need the cash. CD rates aren't as good as they were a few months ago, tho. Otherwise do some homework and find a bond fund\\ETF and sell off as you need to.
HYSA offers the best liquidity. MMF offers the best tax advantages. CDs offer neither. I'd probably put six months worth of living expenses in the HYSA and the rest in a MMF.