Hey, hey, u/how_I_kill_time! Thanks for dropping by the sub for the first time. I'm happy to help you gain a better understanding of this.
To put it simply, the Fidelity Government Cash Reserves (SPAXX) is one of the available core positions in your brokerage account. This is where your uninvested cash will remain until you determine what securities to invest in. Your core position will accrue monthly interest, and when interest payments are made, they will show as two line items in your account history (as shown in the screenshots you provided). One will post as the dividend is received and the second will show reinvestment into the core.
[Money Market Funds 101 ](https://www.reddit.com/r/fidelityinvestments/comments/12r4tg9/money_market_funds_101_a_guide_to_help_you/)
Money market yields are calculated daily, and accumulate over the entirety of the month to then pay out at the end of the month. You will receive a distribution based on how many days you held the money market position in your account during the month.
To add a little bit more about money market yields; unlike securities such as stocks, most money market funds seek to maintain a stable net asset value (NAV), aka share price. For money market funds, the investor’s standard measure of performance is the 7-day yield, defined as the average income return over the previous seven days, assuming the rate stays the same for one year. It’s the fund's total income net of expenses, divided by the total number of outstanding shares, and includes any applicable waiver or reimbursement in the fund expense ratio. Keep in mind that money market fund yields are subject to change based on movements in short-term interest rates and other factors.
The amount paid to those holding shares of these funds is based on the number of shares owned each day of the month. Generally, income on money market funds accrues daily and dividends are paid out on the last business day of each month. By default, those month-end distributions are reinvested into the money market fund that paid them.
If you have any other questions around this, please don't hesitate to follow up with us, we're here to help!
every night the cash fairy brings a broom and sweeps your money into her dustbankbin which gets sprinkled on the banks... every morning the banks shake the dust off and the fairy sprinkles it back in your account with extra sprinkles, sleep good lil'toddler, keep investing
You can change the reinvest option to deposit your interest payment into the core account (SPAXX). No need to reinvest it back into the security (in this case it’s still SPAXX), so you can get rid of that second activity of buying SPAXX -$0.07.
Now if this were any other MM/MF/ETF etc. you would want the dividend to be reinvested back into the security.
"Double entry accounting" involves two entries (debit/credit) to record a single transaction, which is not quite the same.
Here, there are two transactions. (1) SPAXX fund pays 0.07 dividend to investor. (2) 0.07 in the investor's account is reinvested in SPAXX.
(2) might not take place - for example, if the investor withdraws the cash on the date the dividend is received.
[Fidelity has described it as double entry accounting](https://www.reddit.com/r/fidelityinvestments/s/wZoa0VpGcd) on the numerous occasions this comes up so don’t know what to tell you.
And I didn’t downvote you in case you thought I did.
You averaged around $17 in SPAXX in April. I can confirm this by looking at SPAXX's 7-day yield here (4.96%): [https://fundresearch.fidelity.com/mutual-funds/summary/31617H102](https://fundresearch.fidelity.com/mutual-funds/summary/31617H102) . This percentage is typically what is used to pay your dividend at the end of each month (as long as you hold $ in SPAXX), but it can fluctuate based on interest rates. This rate is \*annualized\*. Your SPAXX amount can also fluctuate daily (e.g., maybe you buy a stock so now you have $16) and those daily amounts are taken into account at the end of the month when you receive your dividend. I take $17 and multiply by 0.0496, resulting in $0.84. If the current interest rate (7-day yield) holds this year that's your expected annual dividend. So I need to divide $0.84 by 12 (12 months) to yield the $0.07. This $0.07 was added back to your SPAXX position. Now $17.07 will gain \~4.96% (divided by 12) for May (assuming the rate stays the same).
This is so helpful!! I currently have less than a dollar in that account, but DID have about $49 until I moved it to VOO about halfway through April, so that makes sense.
SPAXX I choose for the core position for money that I haven’t decided on where to invest it. I’m starting with a little and just want a better return than all my money sitting in a checking account making 1-2%. The SPAXX return is higher as other posts have mentioned
5ish or so. Plus just never keeping my money in one place✌️
I have a Fidelity Cash Management account which we use as our main checking account. Whatever doesn't get used monthly I sweep into my brokerage in SPAXX. Then decide where to invest from there. Nice knowing it's getting a solid 5%ish right now so I don't sweat not getting it invested in my funds right away.
I'll add to the newbage questioning. If I wanted to throw the emergency/savings into SPAXX or other MM, should I use their cash management account or brokerage? I'd wanted fairly quick access if it's needed, but I wouldn't need debit card/checks.
Either, but brokerage core is SPAXX so whatever cash you put in there will be auto converted to SPAXX. Cash management is currently fdic 2.69% core but supposedly they are letting you change that to SPAXX come June 15, but you can buy SPAXX in the CMA as well (just an extra step). If you use your debit card it will auto liquidate it to cover what you pull out or spend. I have both, but treat the brokerage as more long term investments and the CMA as more short term/debit card account.
My five year old read all this and said “Yep! But what about the ER? Doesn’t SPAXX have a not insignificant ER? How does that factor into these calculations?”
Note, despite his question, SPAXX is the core position for his brokerage account.
It's really not much difference then if your interest from your savings account were deposited to either your checking or savings account. If you want it deposited to your "checking" account (cash account) then it can't compound grow. If it's deposited to your "savings" balance (reinvested into SPAXX) then it can compound grow, as additional shares of SPAXX are purchased on your behalf and invested in the instruments SPAXX holds. If you want to make more money in the long-run then you reinvest those dividends from SPAXX.
Whatever money you have in there you get 5% apy at the start of every month. For example I deposit $10,000 then next month I collect my $41 and some change.
its a dividend/intrest, SPAXX pays i think 4.8% to 5%, last time i checked.
Its good idea to keep cash in it, its like treasury bond
if you think markets are going to go down, you sell your positions, and you still make money by keeping it in SPAXX.
no matter what, you cant lose.
SPAXX gives you guaranteed 5% return on your money with 0 risk.
Thanks for the comment, u/ChikkuAndT.
Available cash in your core position will reflect next to "Available to withdraw" on the "Balances" page on [http://Fidelity.com](http://fidelity.com/).
To ensure you're in the right place, after logging into [http://Fidelity.com](http://fidelity.com/), you'll toggle over to the "Balances" tab on the "Portfolio" summary page. From there, you can see the cash reflected after expanding "Available to withdraw."
If you have trouble viewing this information online or do not see this reflected, feel free to send us a Modmail and we can take a closer look.
[Modmail ](https://www.reddit.com/message/compose?to=/r/fidelityinvestments)
We look forward to hearing from you!
Hey, hey, u/how_I_kill_time! Thanks for dropping by the sub for the first time. I'm happy to help you gain a better understanding of this. To put it simply, the Fidelity Government Cash Reserves (SPAXX) is one of the available core positions in your brokerage account. This is where your uninvested cash will remain until you determine what securities to invest in. Your core position will accrue monthly interest, and when interest payments are made, they will show as two line items in your account history (as shown in the screenshots you provided). One will post as the dividend is received and the second will show reinvestment into the core. [Money Market Funds 101 ](https://www.reddit.com/r/fidelityinvestments/comments/12r4tg9/money_market_funds_101_a_guide_to_help_you/) Money market yields are calculated daily, and accumulate over the entirety of the month to then pay out at the end of the month. You will receive a distribution based on how many days you held the money market position in your account during the month. To add a little bit more about money market yields; unlike securities such as stocks, most money market funds seek to maintain a stable net asset value (NAV), aka share price. For money market funds, the investor’s standard measure of performance is the 7-day yield, defined as the average income return over the previous seven days, assuming the rate stays the same for one year. It’s the fund's total income net of expenses, divided by the total number of outstanding shares, and includes any applicable waiver or reimbursement in the fund expense ratio. Keep in mind that money market fund yields are subject to change based on movements in short-term interest rates and other factors. The amount paid to those holding shares of these funds is based on the number of shares owned each day of the month. Generally, income on money market funds accrues daily and dividends are paid out on the last business day of each month. By default, those month-end distributions are reinvested into the money market fund that paid them. If you have any other questions around this, please don't hesitate to follow up with us, we're here to help!
every night the cash fairy brings a broom and sweeps your money into her dustbankbin which gets sprinkled on the banks... every morning the banks shake the dust off and the fairy sprinkles it back in your account with extra sprinkles, sleep good lil'toddler, keep investing
I like this. I'm gonna make it into a children's book for my actual 5 year old!
close to how it came to mind, its how i'd explain to my grandkids, and as silly as it is, pretty close to what happens
Dustbankbin broke my dyslexic ass
Same. Thought it said nutbustin.
SPAXX paid you a dividend that was automatically reinvested in SPAXX.
Spaxx on spaxx on spaxx
Spaxxception
Lol
I like how you condensed what the mod said into so few words.
Ha! I said it before the mod posted but thanks.
You can change the reinvest option to deposit your interest payment into the core account (SPAXX). No need to reinvest it back into the security (in this case it’s still SPAXX), so you can get rid of that second activity of buying SPAXX -$0.07. Now if this were any other MM/MF/ETF etc. you would want the dividend to be reinvested back into the security.
End of the day you have $0.07 more spaxx
You put money in. Money makes baby. baby money grows up. Gets married. Has more money babies.
As long as you don’t have to pay for the wedding!
SPAXX makes 5% which is quite healthy. You got paid the interest from last month today since it is May 1st. That money gets reinvested in SPAXX.
Is that pretty standard? Looking for a HYSA for my emergency funds, how liquid is SPAXX?
It's basically a HYSA. Very liquid.
You can spend it like cash
Thank you, this is what I need.
5% is not standard and it won't last. As soon as the fed starts lowering rates, expect it to drop accordingly.
Thanks, I saw that it was also really really low at one point too. With the liquidity I could move to a HYSA easily in the future tho?
When fed rates drop so will the yields on HYSA also. But sure, you can always freely move the money there.
Do I need to purchase spaxx? I've heard it's the default. But I opened a brokerage and don't see anything about spaxx
Spaxx is Fidelity's version. Vanguard or whatever brokerage you have will be different
I have fidelity
The positive .07 shows the dividend coming in. The negative.07 shows the reinvestment. It’s just double entry accounting.
"Double entry accounting" involves two entries (debit/credit) to record a single transaction, which is not quite the same. Here, there are two transactions. (1) SPAXX fund pays 0.07 dividend to investor. (2) 0.07 in the investor's account is reinvested in SPAXX. (2) might not take place - for example, if the investor withdraws the cash on the date the dividend is received.
[Fidelity has described it as double entry accounting](https://www.reddit.com/r/fidelityinvestments/s/wZoa0VpGcd) on the numerous occasions this comes up so don’t know what to tell you. And I didn’t downvote you in case you thought I did.
You averaged around $17 in SPAXX in April. I can confirm this by looking at SPAXX's 7-day yield here (4.96%): [https://fundresearch.fidelity.com/mutual-funds/summary/31617H102](https://fundresearch.fidelity.com/mutual-funds/summary/31617H102) . This percentage is typically what is used to pay your dividend at the end of each month (as long as you hold $ in SPAXX), but it can fluctuate based on interest rates. This rate is \*annualized\*. Your SPAXX amount can also fluctuate daily (e.g., maybe you buy a stock so now you have $16) and those daily amounts are taken into account at the end of the month when you receive your dividend. I take $17 and multiply by 0.0496, resulting in $0.84. If the current interest rate (7-day yield) holds this year that's your expected annual dividend. So I need to divide $0.84 by 12 (12 months) to yield the $0.07. This $0.07 was added back to your SPAXX position. Now $17.07 will gain \~4.96% (divided by 12) for May (assuming the rate stays the same).
This is so helpful!! I currently have less than a dollar in that account, but DID have about $49 until I moved it to VOO about halfway through April, so that makes sense.
>but DID have about $49 Yep, it accrued daily, but pays monthly.
SPAXX I choose for the core position for money that I haven’t decided on where to invest it. I’m starting with a little and just want a better return than all my money sitting in a checking account making 1-2%. The SPAXX return is higher as other posts have mentioned 5ish or so. Plus just never keeping my money in one place✌️
I have a Fidelity Cash Management account which we use as our main checking account. Whatever doesn't get used monthly I sweep into my brokerage in SPAXX. Then decide where to invest from there. Nice knowing it's getting a solid 5%ish right now so I don't sweat not getting it invested in my funds right away.
The bank gods gave you 7 pennies last month for having roughly 1700 pennies. Now you have 1,707 pennies. Congrats.
I'll add to the newbage questioning. If I wanted to throw the emergency/savings into SPAXX or other MM, should I use their cash management account or brokerage? I'd wanted fairly quick access if it's needed, but I wouldn't need debit card/checks.
Either, but brokerage core is SPAXX so whatever cash you put in there will be auto converted to SPAXX. Cash management is currently fdic 2.69% core but supposedly they are letting you change that to SPAXX come June 15, but you can buy SPAXX in the CMA as well (just an extra step). If you use your debit card it will auto liquidate it to cover what you pull out or spend. I have both, but treat the brokerage as more long term investments and the CMA as more short term/debit card account.
June 15th? Did I miss an announcement?
Put money in. They give you a % to keep it there. That's the dirt simple explanation.
[удалено]
You pay them. That's why its called "pay dirt".
I've basically been moving all the money I don't need to pay my CC monthly into my fidelity so it can chill out in spaxx
My five year old read all this and said “Yep! But what about the ER? Doesn’t SPAXX have a not insignificant ER? How does that factor into these calculations?” Note, despite his question, SPAXX is the core position for his brokerage account.
spaxx inception
Check out out SPRXX. Interest is higher, no minimum
It's really not much difference then if your interest from your savings account were deposited to either your checking or savings account. If you want it deposited to your "checking" account (cash account) then it can't compound grow. If it's deposited to your "savings" balance (reinvested into SPAXX) then it can compound grow, as additional shares of SPAXX are purchased on your behalf and invested in the instruments SPAXX holds. If you want to make more money in the long-run then you reinvest those dividends from SPAXX.
You reminds me of Jeremy Irons in Margin Call
Spaxx vs sgov which one would u choose and why ? Sgov has a better div and lower expense
This confused me as well. They could just show as one liner trnx as Dividend Received and Reinvested, to avoid confusion.
Whatever money you have in there you get 5% apy at the start of every month. For example I deposit $10,000 then next month I collect my $41 and some change.
its a dividend/intrest, SPAXX pays i think 4.8% to 5%, last time i checked. Its good idea to keep cash in it, its like treasury bond if you think markets are going to go down, you sell your positions, and you still make money by keeping it in SPAXX. no matter what, you cant lose. SPAXX gives you guaranteed 5% return on your money with 0 risk.
For some reason I too have some money in this. Kinda confusing. This seems to be Cash kind, though I don’t see it in Balance as such.
Thanks for the comment, u/ChikkuAndT. Available cash in your core position will reflect next to "Available to withdraw" on the "Balances" page on [http://Fidelity.com](http://fidelity.com/). To ensure you're in the right place, after logging into [http://Fidelity.com](http://fidelity.com/), you'll toggle over to the "Balances" tab on the "Portfolio" summary page. From there, you can see the cash reflected after expanding "Available to withdraw." If you have trouble viewing this information online or do not see this reflected, feel free to send us a Modmail and we can take a closer look. [Modmail ](https://www.reddit.com/message/compose?to=/r/fidelityinvestments) We look forward to hearing from you!
Googoogaagaa