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Ways to help keep your cash safe

What to know about cash, banks, and insurance.

In the wake of Silicon Valley Bank’s failure, you may be concerned about the safety of your cash at a bank or brokerage firm. Here are some answers to questions you may have.

Is my cash safe?

The most common places to hold cash are bank savings accounts, certificates of deposit (CDs) issued by banks, and money market mutual funds managed by brokerage firms, including Fidelity. All of these products are designed to help protect the value of your cash while also paying you interest on your money.

Is my cash insured if the institution that holds it fails, like Silicon Valley Bank?

If your cash is in a CD or bank account, the federal government insures up to $250,000 of it, per bank, through the Federal Deposit Insurance Corporation (FDIC).

Can you get more than $250,000 in coverage?

The FDIC's $250,000 insurance limit is per account owner. That means you have up to $250,000 in insurance coverage available at each bank where you have a savings account, CD, or bank Money Market Deposit Account (MMDA). If you have more cash than that, you can deposit it at other FDIC-insured institutions to be fully insured.

How does FDIC insurance work at Fidelity?

Fidelity offers an FDIC-insured Deposit Sweep Program for certain account types: Cash Management1 health savings accounts (HSAs) and most IRAs. 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. Deposits swept into the program bank(s) are eligible for FDIC insurance, subject to FDIC insurance coverage limits.

If you utilize the program, your uninvested cash balance is swept to a program bank where the deposit is eligible for FDIC insurance. The program maximizes your eligibility for FDIC insurance by systematically allocating this uninvested cash across multiple program banks. We currently have about 20 banks available for Fidelity Cash Management and IRA accounts (although new deposits at any point in time are subject to bank capacity limits). Assuming all the banks have available capacity, a customer could have up to $5 million of uninvested cash covered by FDIC insurance2.

You can find details on how your core position is allocated within the “Positions” tab on Fidelity.com. A Fidelity rep can also help you customize the program banks in your bank sweep account.

In the event that you have more uninvested cash in your account than we can obtain FDIC insurance coverage for, we sweep that additional cash into a money market mutual fund as part of our Money Market Overflow feature.

Fidelity also offers brokered CDs,3 which are issued by banks for customers of brokerage firms. Because the deposits are obligations of the issuing bank, and not the brokerage firm, FDIC insurance applies. This could allow you to obtain even more FDIC insurance coverage in your account since Fidelity offers a continuous selection of CDs from different banks at the same time. Brokered CDs are not limited to clients of brokerage firms; the term “brokered CDs” refers to the fact that a fee is paid for their distribution.

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How safe are money market mutual funds?

Money market mutual funds are a type of fixed income mutual fund that invests in debt securities characterized by their short maturities and minimal credit risk. SEC regulations mandate their quality, liquidity, duration, diversification, and transparency in order to enhance stability and facilitate liquidity. Money market mutual funds are among the lowest-volatility types of investments. However, they do not carry FDIC insurance as do bank Money Market Deposit Accounts, CDs, and savings accounts at banks.

Government money funds such as Fidelity Government Money Market Mutual Fund (SPAXX)*, typically invest only in cash, the highest quality, lowest-risk securities issued by the US government, and repurchase agreements collateralized by cash or US government securities. Treasury and government money market funds are designed to maintain a stable net asset value (NAV) of $1.00.

Retail prime money market mutual funds such as Fidelity Money Market Fund (SPRXX)*,* invest in securities issued by the government as well as short-term securities, such as commercial paper. These funds also offer stable $1.00 NAVs. They differ, however, from government funds in that they can also invest in commercial paper, certificates of deposit, corporate notes, and other private instruments from domestic and foreign issuers, as well as repurchase and potentially reverse repurchase agreements.

Retail tax-exempt municipal money market funds such as Fidelity Municipal Money Market Fund (FTEXX)**, invest in municipal securities and also offer a stable $1.00 NAV.

Do Fidelity money market mutual funds carry FDIC insurance?

The US government does not offer insurance on any type of mutual fund. Money market mutual funds, like bond and stock mutual funds, are investments, and, as such, are not guaranteed. It is important that investors understand that. Cash held by investors in new Fidelity brokerage and individual retirement accounts is automatically placed in government money market mutual funds. Cash in existing accounts can also be invested in such money market mutual funds.

Do stocks have insurance from the federal government?

The FDIC's mission is to insure deposits at banks, not stocks, bonds, or mutual funds. It does not provide insurance against financial losses resulting from changes in the market value of stocks, bonds, and mutual funds.

What else should I know about keeping my cash safe?

We understand the concerns many may have, given the current and evolving environment, and are closely monitoring and assessing this situation to best support our customers. We would like to reassure you that we have a variety of measures and controls in place for supporting customers through all market events. This includes us not being dependent on any single entity to provide cash services to clients.

Is holding cash still a safe strategy for preserving wealth?

While maintaining a large allocation to cash is not a good long-term strategy for most investors, due to the potential impact of inflation, cash held in CDs and money market mutual funds has historically provided a cushion against market downturns. For investors who want to earn income while preserving capital, it may still be a good time to consider longer-term CDs, which can provide income through volatile markets.

Fighting fear

To help manage the anxiety and fear that may arise from watching the market react to events such as the failure of Silicon Valley Bank, it's helpful to have a long-term asset allocation plan as part of a broader financial plan. An appropriate asset allocation includes a mix of stocks, bonds, and short-term securities or cash that aligns with your goals, time horizon, and your ability to manage risk. Your plan can help you avoid emotional overreactions to volatility so you can stay on track toward your long-term financial goals.

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Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

 1. The Cash Balance in the Fidelity Cash Management Account is 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"). The 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. At a minimum, there are 20 banks available to accept these deposits, providing for up to $5,000,000 of FDIC insurance. If the number of available banks changes, or you elect not to use, and/or have existing assets at, one or more of the available banks, the actual amount could be higher or lower. All assets of the account holder at the depository institution will generally be counted toward the aggregate limit. For more information on FDIC insurance coverage, please visit FDIC: Federal Deposit Insurance Corporation. Customers are responsible for monitoring their total assets at each of the Program Banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. The deposits at Program Banks are not covered by SIPC. For additional information please see the Fidelity Cash Management Account FDIC Disclosure Document. 2. Under the Fidelity FDIC Insured Deposit Sweep Program, the uninvested cash balance is 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". The 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. All assets of the account holder at the depository institution will generally be counted toward the aggregate limit. For more information on FDIC insurance coverage, please visit www.FDIC.gov. Customers are responsible for monitoring their total assets at each of the Program Banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. The deposits at Program Banks are not covered by SIPC. For more information regarding the FDIC Insured Deposit Sweep program please see the following disclosures: For Fidelity Cash Management Accounts visit: Fidelity® Cash Management Account FDIC-Insured Deposit Sweep Program Disclosure For the Retirement Account or Fidelity Health Savings Account, please go to: FDIC-Insured Deposit Sweep Program Disclosure 3. For the purposes of FDIC insurance coverage limits, all depository assets of the account holder at the institution issuing the CD will generally be counted toward the aggregate limit (usually $250,000) for each applicable category of account. FDIC insurance does not cover market losses. All the new-issue brokered CDs Fidelity offers are FDIC insured. In some cases, CDs may be purchased on the secondary market at a price that reflects a premium to their principal value. This premium is ineligible for FDIC insurance. For details on FDIC insurance limits, visit FDIC: Federal Deposit Insurance Corporation.

For the purposes of FDIC insurance coverage limits, all depository assets of the account holder at the institution issuing the CD will generally be counted toward the aggregate limit (usually $250,000) for each applicable category of account. FDIC insurance does not cover market losses. All the new-issue brokered CDs Fidelity offers are FDIC insured. In some cases, CDs may be purchased on the secondary market at a price that reflects a premium to their principal value. This premium is ineligible for FDIC insurance. For details on FDIC insurance limits, visit FDIC.gov.

 *Fidelity government including U.S. Treasury funds: You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund's sponsor, have no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. Fidelity's government and U.S. Treasury money market funds will not impose a fee upon the sale of your shares, nor temporarily suspend your ability to sell shares if the fund's weekly liquid assets fall below 30% of its total assets because of market conditions or other factors. **Fidelity retail prime and retail municipal funds (limited to accounts beneficially owned by natural persons, as determined by the fund): You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund's sponsor, have no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

As with all your investments through Fidelity, you must make your own determination whether an investment in any particular security or securities is consistent with your investment objectives, risk tolerance, financial situation, and evaluation of the security. Fidelity is not recommending or endorsing this investment by making it available to its customers.

Past performance is no guarantee of future results.

In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so holding them until maturity to avoid losses caused by price volatility is not possible. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

High-yield/non-investment-grade bonds involve greater price volatility and risk of default than investment-grade bonds.

 Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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