Understand come mid-Dec, Fidelity new accounts will have cash balances put in “FCASH” instead of automatic sweep into various money funds. FCASH will pay a mere 2% in a 5% short rate environment. A page out of the Schwab playbook!
Unimpressed.
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It looks like it doesn’t apply to accounts opened by individuals… and not retirement accounts.
Fidelity Removes High-Yield Fund as Cash Sweep Option for RIAs
Effective later this year, FCASH will be the only sweep account option for all new, non-retirement brokerage accounts opened by custody clients.
It effects indiv accts… not retire accts
The financial lesson to be learned is NOT to use FCASH (or any other brokerage cash account) as a savings account. Use those brokerage cash accounts only for what they were set up for, to temporarily hold cash until the owner can select an investment for it.