![]() ![]() My guess is that this has never happened, so there's no way to know. What happens with Fidelity? Do just see your statement change from showing your money being held at failed bank X to now being held at bank Y? Is there a small delay while Fidelity cuts necessary business deals with bank Y to make it a "program bank," and rewires its "sweep" system to direct to bank Y instead of bank X? Does the client need to file any paperwork? On Friday your money is in Bank X, on Monday it is in Bank Y.* With a regular bank account this is generally a non-event, with the FDIC arranging for bank Y to take over bank X's accounts. As of 9/6/22, it was 1.19%.It would be interesting to know what the actual client-side experience looks like when one of Fidelity's "program banks" fails and undergoes an FDIC rescue. Any interest you may earn comes from the banks and not from Fidelity. Since it uses multiple banks, you could have the maximum balance for coverage, $250,000, in each of the multiple banks and have it all covered by the FDIC, meaning you can have millions of dollars fully covered by the FDIC. If you decide to switch to other banks, you can do so. You choose what banks you want to use from Fidelity's list of available banks and they do the rest. are automatically "swept" through Fidelity into or out of a National bank(s). It's a program/method to keep all your cash FDIC insured by using multiple national banks that are all FDIC insured to hold your money.Īny cash coming into or going out of, including checks being written, debit card transactions, withdrawals, transfers, etc. It looks like a bank account and acts like a bank account, but isn't a bank account. It is not a Money Market Mutual Fund like SPAXX, so it doesn't pay dividends, and there are no fees. The so-called "FDIC Sweep" is the Fidelity Cash Management (CMA) Account. Fidelity has not been involved in the preparation of the content supplied at the unaffiliated site and does not guarantee or assume any responsibility for its content. ![]() This web site is unaffiliated with Fidelity. ![]() Certain eligible Fidelity retirement accounts such as Traditional, Rollover, and SEP IRAs Fidelity Roth IRAs, and Fidelity SIMPLE IRAs.The following Fidelity accounts utilize the Program: For more details about the program you can read the FDIC Insured Deposit Sweep Program Disclosure. The FDIC Program Administrator receives an annual fee from Fidelity equivalent to 0.010% of the aggregate daily balance of all Program Deposits up to a fixed cap. FDIC Deposit Insurance is funded by FDIC-insured institutions and it's backed by the full faith and credit of the United States Government. ![]() There is no fee for the FDIC Insured Deposit Sweep Program, and you do not need to apply for or make a purchase for the coverage, as it is automatic whenever a deposit account is opened at an FDIC-insured bank. You can learn more about these fees and expenses with the links below. Instead, the fee is already calculated into the Net Asset Value (NAV) of the mutual fund. This means that you do not see a deduction of cash or shares from your brokerage account to pay for expense ratio fees. Funds typically pay their regular and recurring fund-wide operating expenses out of fund assets, rather than by imposing separate fees and charges on investors. An expense ratio, while similar to a fee, is the percentage of assets paid to run a fund. The Fidelity Government Money Market (SPAXX) is a money market mutual fund offered as a default core position. Hi u/amy-zhg, we appreciate your continued engagement with our sub! We're happy to help with your question. ![]()
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