topic Re: Explain fidelity cma to me in Personal Finance

Explain fidelity cma to me

Snook_on_the_Line — Wed, 08 Jan 2025 04:02:51 GMT

Title says it all.

those who have a cma from fidelity please explain it to me.

What exactly is a cma account from fidelity?

is it a checking account?

are your funds always available?

are there any hidden fees?

Is it safe?

basically the only thing I'd use it for, besides keeping just enough cash there to keep it open, is pushing funds to new checking accounts for SUBs.

Re: Explain fidelity cma to me

FicoMike0 — Wed, 08 Jan 2025 04:36:50 GMT

@Snook_on_the_Line wrote:
Title says it all.

those who have a cma from fidelity please explain it to me.

What exactly is a cma account from fidelity?
earns interest, allows other inversments. Comes with debit card which has no fees, worldwide. Can get free checks.
Does not allow option trading, you can also open a free brokerage account, which does. Neither account has minimum balance requirement. Can access both accounts from same app, move funds instantly.
is it a checking account?
yes. I guess they call it a cma because they're not a bank.
are your funds always available?
yes
are there any hidden fees?
no. None that I've found. Well, the brokerage account charges a $0.65 fee for each option contract bought or sold. Not a lot, but robin hood has no fee. I have a rh account for options.
Is it safe?
so far
basically the only thing I'd use it for, besides keeping just enough cash there to keep it open, is pushing funds to new checking accounts for SUBs.
it seems to work well for that. I've had success with amex checking as well.

Re: Explain fidelity cma to me

Snook_on_the_Line — Wed, 08 Jan 2025 05:20:25 GMT

Thanks @FicoMike0 ,

are you using the spaxx or the sweep version of the account?

So using it for ach pushes for SUBs it would act just like a checking account?

push funds needed for sub from my WF checking, wait for them to show in cma's avail bal, push two deposits to new checking for SUB, Wait for sub to pay out, pull funds back to WF.

rinse and repeat No extra steps? Just like a checking account?

Re: Explain fidelity cma to me

GZG — Wed, 08 Jan 2025 05:34:00 GMT

@Snook_on_the_Line wrote:
Title says it all.

those who have a cma from fidelity please explain it to me.

What exactly is a cma account from fidelity?
it is a checking account that uses UMB as the bank to do the 'bank stuff'

is it a checking account?
yes, it is a normal checking account with a debit card, checks, ach account number/routing number (UMB)
are your funds always available?
there's no zelle, but it's just like every other checking account, so yes
are there any hidden fees?
no
Is it safe?
your core position in the CMA can either be SPAXX earning currently ~4.08%

or whatever the FDIC insured one is called earning ~2.2%

so technically no, SPAXX is not FDIC insured so it's not "safe".

In practical terms, it's safe. Or you can pick the FDIC option and it is completely safe.

basically the only thing I'd use it for, besides keeping just enough cash there to keep it open, is pushing funds to new checking accounts for SUBs. I use it as my primary checking, I'm coming around to zelle so it's sad it has no zelle, but other than that, I'm happy with it.

do not pull from fidelity though or you'll end up with your money locked up for ... too long

I have heard DPs of fidelity being like 'what are you doing...' using fidelity to just do bank bonus SUBs, not sure I've read about any closures because of it though

Re: Explain fidelity cma to me

Varsity_Lu — Wed, 08 Jan 2025 13:27:46 GMT

It's not FDIC insured and technically not a bank, but it acts just like one. Think of it as a HYSA and free checking combined into one account. The only hang up I have run into is there is a bit of a long(er) wait time between when you deposit into it and when the cash is actually available. A week, a week and a half. I have had mixed time frames based on what type of deposit is happening. Payroll direct deposits don't have any wait time as far as I can tell, just transfers from other banks.

Personally, I love it. I ordered their free physical checks and have been super impressed by the quality. Everything is just real classy, even the check book cover. Seriously. It's niiiice. (or noice as my kids say)

In the last 3 months I have moved all my emergency funds to the Fidelity CMA (SPAXX), closed my traditional checking account with my local bank (it was only earning like .01% or something), and even moved my HSA to Fidelity. The HSA uses a slightly different fund (FDRXX I think) but earns basically the same as the SPAXX.

Re: Explain fidelity cma to me

coldfusion — Wed, 08 Jan 2025 12:09:39 GMT

@Varsity_Lu wrote:
Payroll direct deposits don't have any wait time as far as I can tell, just transfers from other banks.

IME that's correct.

Re: Explain fidelity cma to me

Snook_on_the_Line — Wed, 08 Jan 2025 13:35:35 GMT

Thanks all.

anyone know if they pull from chex for new accounts ?

Re: Explain fidelity cma to me

Varsity_Lu — Wed, 08 Jan 2025 13:57:02 GMT

@Snook_on_the_Line wrote:
Thanks all.

anyone know if they pull from chex for new accounts ?

Just checked ChexSystems and there was no Fidelity pull.

Re: Explain fidelity cma to me

FicoMike0 — Thu, 09 Jan 2025 04:11:12 GMT

I think you can avoid long ach delays by pushing from another bank, rather than pulling from fidelity. They have a managed fund called fidelity go which has given me 12% over last year. I keep my rainy day fund there.

Re: Explain fidelity cma to me

FicoMike0 — Thu, 09 Jan 2025 04:17:48 GMT

Btw, I needed $10,000 in ach for usb sub. I pushed $5001 from fidelity, then sent it from usb to capone, from there back to fidelity, rinse and repeat for $10000. Used the same $5000 twice to make the $10000.

Re: Explain fidelity cma to me

Varsity_Lu — Thu, 09 Jan 2025 11:55:48 GMT

@FicoMike0 wrote:
Btw, I needed $10,000 in ach for usb sub. I pushed $5001 from fidelity, then sent it from usb to capone, from there back to fidelity, rinse and repeat for $10000. Used the same $5000 twice to make the $10000.

I smell an AML inquiry coming from Cap One. Beware...

Re: Explain fidelity cma to me

TrapLine — Thu, 09 Jan 2025 15:41:26 GMT

@Snook_on_the_Line wrote:
Title says it all.

those who have a cma from fidelity please explain it to me.

What exactly is a cma account from fidelity?

is it a checking account?

are your funds always available?

are there any hidden fees?

Is it safe?

basically the only thing I'd use it for, besides keeping just enough cash there to keep it open, is pushing funds to new checking accounts for SUBs.

The Fidelity Investments CMA Cash Account does offer the lower interest rate 2.2% (or whatever market driven) and obtains its safety by automatically transfering the funds to FDIC Insured Banks at the lower rate. When you call for funds from the CMA Cash Account, Fidelity transfers the funds back from the FDIC insured banks (they do have a list of many banks they use for safety up to $250,000 per account) and cover the client's activities.

As has been said in this posting, the higher rate options for the Fidelity CMA Cash accounts are not covered by the FDIC. Further, Fidelity gives you a bank like approach utilizing other financials to provide some of the servicing (this to can be found in the fine print). They use multiple providers. Mellon Bank and others work the Debit Cards along with UMB who actually operates the checking options. This is how Fidelity Investments gives a client a full rich experience without having its own bank charter.

An added feature/service is their Fidelity Rewards Visa Signature Account which is part of the Elon Cards and can be attached to the Fidelity Investment line of accounts. Elon tends to offer larger credit lines (Flexible Spending Account) and has many good benefits that are more than most Elon Cards offer (see their ads).