Spend & Save FAQs: Cash Management Account

It's a dedicated brokerage account to help grow your savings at Fidelity with competitive rates on cash and everything you need for convenient spending and saving.

Here are some things you can do with this account:

• Spend and withdraw money easily with a debit card
• Pay bills and write checks
• Add money via direct deposit with a designated account and routing number or by using mobile check deposit
• Transfer money instantly between your eligible Fidelity accounts or
• Wire money for free

Cash management accounts are designed to handle all of your spending and savings needs. They are intended to complement your other accounts, not replace them. By pairing a cash management account with accounts that are designed for long-term savings or investments, like eligible retirement accounts or Fidelity Brokerage Accounts, you can set up regular transfers between accounts to easily invest excess cash as you see fit.

It’s available exclusively to Fidelity customers. If you have any Fidelity account, you’re eligible to open a cash management account.

When you add money to your Fidelity Cash Management Account, it will be automatically put into your account’s core position. Think of your core position like your wallet — it holds your cash. Money goes out when you decide to spend or buy something using the account, and money goes in any time you make a deposit.

There are two options for your core position that you’ll choose from when you open an account: SPAXX – Fidelity® Government Money Market Fund and the FDIC – Insured Deposit Sweep Program. Both options keep your cash accessible so you can spend or withdraw any time, but it’s important to understand the differences.

SPAXX – Fidelity^® Government Money Market Fund
SPAXX is a money market fund that gives you access to your cash and may earn a higher return than a traditional checking account. In general, money market funds are invested in short-term, lower‑risk securities which keep price changes relatively small compared with other types of mutual funds. However, an investment in a money market fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Money held in SPAXX, as well as any other security held in the Fidelity Cash Management Account, is eligible for SIPC protection up to $500,000.

Fidelity's FDIC – Insured Deposit Sweep Program
This program automatically transfers (or sweeps) your uninvested cash into program banks, where it’s deposited. If FDIC protection is your priority, this option allows for your money to be insured by the FDIC up to $4 million.

While both accounts can generally help you earn higher interest rates than a traditional bank or checking account, one major difference between Fidelity Cash Management Accounts and high yield savings accounts are available features and FDIC-insurance coverage options. The Fidelity Cash Management Account has features that aren’t always offered by high yield savings accounts—like a debit card, check writing, and mobile deposit. This means you get easy access to your cash while your money can earn a competitive rate.

When it comes to FDIC-insurance, banks that offer high yield savings accounts are FDIC-insured. The Fidelity Cash Management Account is a brokerage account that gives you the option to put your money into our FDIC-Insured Deposit Sweep Program, but you can also put your money into available money market funds which tend to earn a higher rate. SPAXX – Fidelity® Government Money Market Fund is not covered by FDIC insurance and therefore subject to market risk. However, SPAXX, along with all other securities in the Fidelity Cash Management Account, is covered by Securities Investor Protection Corporation (SIPC) protection—which protects up to $500,000 (including $250,000 for claims for cash.) SIPC coverage does not protect against market losses but it does protect against brokerage firm failure or bankruptcy. Explanatory brochure available upon request or at www.sipc.org.

Both a cash management account and a traditional bank checking account may offer some of the same features like bill pay, debit card, and mobile deposit—however there are often a few key differences in earning potential, FDIC-insurance, and fees. The Fidelity Cash Management account offers multiple ways to earn with our FDIC-insured Deposit Sweep Program or through money market funds that are invested in low-risk securities, like SPAXX. SPAXX is not covered by FDIC insurance and may have a higher earning potential than traditional bank checking accounts. Additionally, some banks require minimum balances to avoid fees and they don't all reimburse ATM fees at machines outside of their bank's network. The Fidelity Cash Management Account offers unlimited ATM reimbursements and there’s no account fees or minimum balances.

Fidelity provides multiple layers of protection to help keep your account secure.

• Fidelity Customer Protection Guarantee
  Covers certain losses from unauthorized activity, giving you added peace of mind.
• 24/7 transaction monitoring
  Helps detect and prevent suspicious activity around the clock.
• Advanced security tools and alerts
  Allow you to stay informed and in control of your account activity.

Together, these protections help safeguard your money while you save, spend, and manage cash with confidence.

The Fidelity^® Cash Management Account is not a bank account. It is a brokerage account that allows you to spend, save, and invest. The account offers competitive rates as well as spending and money movement features including a free debit card, checkwriting, Bill Pay, and more.

If elected, the cash balances in the Fidelity^® Cash Management Account are swept into an FDIC-Insured interest bearing account at one or more program banks and, under certain circumstances, a money market mutual fund (the "Money Market Overflow"). Deposits swept into the program bank(s) are eligible for FDIC Insurance, subject to FDIC insurance coverage limits. Balances that are swept to the Money Market Overflow are not eligible for FDIC insurance but are eligible for SIPC coverage under SIPC rules (referenced below). Fidelity automatically performs all transfers between the program banks and your account. You cannot access your funds directly from a program bank. Please refer to the following for additional information:

• Fidelity^® Cash Management Account FDIC-Insured Deposit Sweep Program Disclosure document (PDF) for complete explanation and disclosures on the Deposit Sweep Program
• List of Program Banks
• www.fdic.gov for additional information on FDIC insurance coverage limits

The FDIC Deposit Sweep Program systematically allocates your cash across multiple program banks to ensure your money is protected. For example, a deposit of $500,000 to an individually registered Fidelity^® Cash Management Account will be spread across three program banks: $245,000 will be swept to the first two program banks each, and $10,000 is swept into a third program bank. Sweeping only $245,000 rather than the respective FDIC coverage limit of $250,000 helps to ensure that any accrued (unpaid) interest is also protected by FDIC Deposit Insurance Coverage. Under this example, a subsequent deposit of an additional $50,000 will be automatically swept into the third program bank.

Make sure you monitor the total amount of cash on deposit with the program banks assigned to your Fidelity^® Cash Management Account. This total includes other FDIC eligible assets at Fidelity as well as at other financial institutions held in the same right and legal capacity. You can view the amount of cash at each program bank via Fidelity.com at all times.

If you exceed the FDIC coverage limits at a bank assigned to hold your deposits, contact us at 800-931-9987 to discuss opting out of a bank or updating the program bank list assigned to your account.

Remember, the FDIC limit applies to all accounts you hold at a bank, so be sure that you consider balances in other accounts you have directly with the bank.

No, securities held in a brokerage account are not eligible for FDIC insurance coverage. However, brokerage accounts are protected by Securities Investor Protection Corporation (SIPC). The SIPC protects a customer's brokerage account if a brokerage firm is closed due to bankruptcy or other financial difficulties and customer assets are missing from accounts. SIPC protects a customer's brokerage account up to $500,000 in securities, including a limit of $250,000 on claims for cash. Money market funds, (including the Fidelity^® Government Money Market - SPAXX or the Money Market Overflow) are considered securities. For more information on SIPC coverage, please review the following:

"How SIPC Protects You" available for free download at www.sipc.org

How Fidelity Safeguards Your Accounts

For balances swept into Program banks, interest is accrued daily and is paid monthly on the last business day of the month. Note that the specific program bank assigned to your account does not impact the interest rate.

For balances held in a money market mutual fund, distributions consist primarily of dividends. A money market fund normally declares dividends daily and pays them monthly on the last business day of the month.

Cash Manager is an optional feature that gives you flexibility in managing your finances. You can automatically move cash to your Fidelity^® Cash Management Account when you need it and receive alerts so that, if you choose, you can actively invest extra cash when you have it.

How does Cash Manager work?

1. When you open a Fidelity^® Cash Management Account, Cash Manager lets you set a maximum target balance, a minimum target balance, a minimum transfer amount, and a hierarchy of funding accounts to supply available cash to your Fidelity^® Cash Management Account.
2. When the cash in your Fidelity^® Cash Management Account hits your maximum target balance, Cash Manager alerts you so you can move the money and, if you choose, invest it.
3. If the cash in your Fidelity^® Cash Management Account drops below your minimum target balance, Cash Manager moves available cash automatically from your designated funding accounts in the order you specify.
4. If you sign up for Cash Manager overdraft protection and your debit requests (e.g., checks, debit card, direct debit) exceed the balance in your Fidelity^® Cash Management Account, available funds from your funding accounts (up to $99,999.99 per day per funding account) will automatically be moved to your Fidelity^® Cash Management Account to cover the debit. Available funds include cash (core), available margin, and non-core money market funds. These sources will be drawn from the first funding account in this order before the next account is tapped.

Self-funded overdraft protection provides available cash immediately for pending transactions if your balance would otherwise go into overdraft (that is, below $0). Cash Manager will draw on available cash, available margin, and non-core money market funds in your designated Fidelity funding accounts (up to $99,999.99 per day per funding account). Cash Manager will draw only enough cash to prevent a negative account balance.

The minimum target balance is used to automatically transfer available cash on a nightly basis to restore the cash balance minimum you have set for your Fidelity^® Cash Management Account. It is triggered by your available cash balance only (not transactions) and will draw your minimum transfer amount ($250 minimum) of cash from your designated funding accounts (up to $99,999.99 per day per funding account) in the order you have set.

With Cash Manager, overdraft protection is provided by moving funds from your funding accounts (up to $99,999.99 per day per funding account) so quickly that no overdraft actually occurs. Typically, with a bank, overdraft protection is provided by tapping into a line of credit once an overdraft occurs.

To provide overdraft protection, Cash Manager moves available cash from the first of your Fidelity funding accounts (up to $99,999.99 per day per funding account) before it draws on available margin debt—if it needs to draw on margin debt at all. Margin is tapped only if you have elected it on your funding accounts. With Cash Manager's overdraft protection, you incur no interest charge if no margin debt is drawn, and if margin debt is drawn, you can reduce interest charges by replenishing your Fidelity funding accounts. Typically, with a bank, overdraft protection incurs an interest charge as soon as it is used, and you are charged interest until you pay off the debt.

No, Cash Manager overdraft protection is funded by using available funds (available cash, available margin, and non-core Fidelity money market assets) from a hierarchy of Fidelity funding accounts (up to $99,999.99 per day per funding account) that you designate. It will not sell equity or bond positions or non-money market funds, and will not subject you to variations in market conditions.

Note: Available margin or non-core money market funds are used to cover overdrafts only if you select that as an option.

Fidelity funding accounts are tapped in the order you specified in your funding account hierarchy. If there are not enough funds in all of your Fidelity funding accounts to cover a debit request, no money will be transferred, and the debit will be referred to the Fidelity Margin Department for a payment decision. Debit card transactions are always rejected if there are not enough funds, because there is not enough time for the Margin Department to research other possible available funds.

Cash Manager only moves available cash once per day. Every night, Fidelity checks the cash balance in your Fidelity^® Cash Management Account. If that balance is below your minimum target balance, Cash Manager moves enough available cash from your funding accounts (up to $99,999.99 per day per funding account) to your Fidelity^® Cash Management Account to restore its cash balance to the minimum target balance. If there is not enough cash in the first funding account in your hierarchy, Cash Manager checks the second funding account in your hierarchy for available funds. This process continues until the Fidelity^® Cash Management Account cash balance is restored, or there are no more accounts in your funding account hierarchy. Cash Manager will always attempt to move the minimum transfer amount or the difference between the actual cash balance and the minimum target balance, whichever is larger.

Cash Manager funding accounts must be owned fully by the owners of the Fidelity^® Cash Management Account they are funding. Eligible accounts include:

• Individual (I) or Joint (J) registrations, including Transfer on Death (TOD) equivalents
• Trust Under Agreement (TRUA)
• A bank account you have previously connected to the Fidelity^® Cash Management Account by electronic funds transfer (EFT). (Note that the bank account will only be used to restore the minimum target balance and not be used for overdraft protection.)

If you want a funding account to have the automatic investment (AI) account feature, you must establish AI on the account before linking it to the Fidelity^® Cash Management Account via Cash Manager. If an account is already linked as a funding account, and you want to add AI, you must first de-link the account, add in the AI, and then re-link the account to the Fidelity^® Cash Management Account via Cash Manager.

The Personal Withdrawal Service (PWS) can be set up on a funding account without de-linking it first.

The same funding account cannot be used to concurrently fund two different Fidelity^® Cash Management Accounts using Cash Manager.

Stock Plan Services (SPS) accounts are not eligible to be funding accounts. You can request manual transfers between an SPS account and a Fidelity^® Cash Management Account.

If the Fidelity^® Cash Management Account is an individual registration in, for example, John’s name, only accounts owned by John can be funding accounts. If the Fidelity^® Cash Management Account is a joint registration owned by John and Jane, then funding accounts could be John’s and/or Jane’s accounts and Joint accounts owned only by both John and Jane. Note that only John can set up his individual registered account and only Jane can set up her individual registered account as funding accounts.

Note that trustees on a TRUA account are considered owners of the account and Fidelity uses the TIN or SSN to recognize the identity of the owners. So if the TRUA account uses a TIN and the individual account uses a SSN, Fidelity will not know that the owners are the same person even if they identify the same person.

Any trustee registered on a trust Fidelity^® Cash Management Account has access to Cash Manager and may set it up or modify it on behalf of all the trustees. Approval of all trustees for setting up or modifying Cash Manager is not required. This means that any trustee can set the minimum and maximum balance levels for the trust Fidelity^® Cash Management Account or designate funding accounts. However, funding accounts must be owned in their entirety by the trustees of the Fidelity^® Cash Management Account that they are funding. In other words, all owners and/or trustees on a funding account must be listed as registered trustees on the trust Fidelity^® Cash Management Account.

For example, if the trustees on a Fidelity^® Cash Management Account are John and Jane, then the following accounts are eligible as funding accounts:

• John’s individual account
• Jane’s individual account
• John and Jane’s joint account
• Trust account for which John is the sole trustee
• Trust account for which Jane is the sole trustee
• Trust account for which both John and Jane are the only trustees

If there is a trust account for which John, Jane, and Mary are the trustees, then this account would not be eligible as a funding account because Mary is not registered on the Fidelity^® Cash Management Account.

Conversely, if Mary is a trustee on the Fidelity^® Cash Management Account, all the accounts above are still eligible as a funding account because John and Jane are listed on the trust Fidelity^® Cash Management Account. The rule that all owners and/or trustees on a funding account must be listed as registered trustees on the trust Fidelity^® Cash Management Account is satisfied.

Yes, when you link an account, we automatically activate "view only" access to allow all joint account owners to see shared account information. However, this allows joint owners to view the funding account's balance as well. Currently, there's no way to limit this access, but we are working to improve this feature.

No, because Fidelity uses electronic funds transfer (EFT) to move money from your bank. Funds on an EFT can take several days to settle into your Fidelity^® Cash Management Account. Because of this delay, Fidelity can only use EFT from your bank to restore your account to the minimum target balance. Note that Cash Manager will not send multiple requests to your bank until the first one is fully processed.

No, only one funding account is needed to set up Cash Manager. However, if that one funding account is a bank account, no overdraft protection can be provided.

An alert is sent after a transaction is initiated. Your latest alerts are always available on your Fidelity^® Cash Management Account overview page. If you choose to have your alerts sent to you by text, the amount of time that elapses after the transaction is initiated and you receive your alert depends on the device on which you receive your alert, and the service you have on that device.

You can temporarily suspend the Cash Manager feature at any time, for up to 10 business days.

Cash Manager will automatically reactivate after 10 business days, or you can reactivate it yourself before that time by visiting the Cash Manager preferences page and selecting the Reactivate option.

To remove the Cash Manager feature from your account, go to the Cash Manager preferences page and select Remove. Note: Removing Cash Manager from your Fidelity^® Cash Management Account deletes all of your preferences; therefore, you should remove Cash Manager only if you want it to be permanent.

If you remove Cash Manager and want to reestablish it at a later time, you must complete the setup process again.

Yes, it is possible to use your current bank account as a funding account to restore the Fidelity^® Cash Management Account minimum target balance. To do this, you must create an electronic funds transfer (EFT) link between your Fidelity^® Cash Management Account and your bank account.

Note: There could be a prenote waiting period of 7 to 10 calendar days associated with the establishment of a new EFT link. Once the EFT prenote period has been completed, and the link has been fully established, it will take up to 4 business days for an executed EFT transaction to be processed through the Automated Clearing House (ACH) network before the cash will be available in your Fidelity^® Cash Management Account.

Yes, the AI service can be set up on either a Fidelity^® Cash Management Account or on a Cash Manager funding account. Note: AI service is currently only available from an outside account to a Fidelity account.

If you want a funding account to have the AI account feature, you must establish AI on the account before linking it to the Fidelity^® Cash Management Account via Cash Manager. If an account is already linked as a funding account, and you want to add AI, you must first de-link the account, add in the AI, and then re-link the account to the Fidelity^® Cash Management Account via Cash Manager.

Yes, during the overnight processing cycle for money movement associated with a Fidelity account, automatic investment (AI) is generally processed first, followed by PWS second, and Cash Manager third. This means that if a Fidelity^® Cash Management Account or a Cash Manager funding account has a mix of the above money movement features enabled, funds will be moved based on the processing priority outlined above. Any money movement transaction which impacts the account’s core cash balance (for example: purchase, wire check redemption, IRA contribution) may affect PWS, AI, or Cash Manager money movement.