SPAXX vs FDIC: Picking The Right Fidelity Core Position (2023)

We Compare SPAXX vs FDIC:

In the world of investment, idle money is almost a crime; you shouldn’t have any cash sitting around. Fidelity has made it easy to have your uninvested cash put into something until you’re ready to buy stocks, bonds, etc., and that’s your Fidelity core position.

Put another way; your Fidelity core position is where your idle cash goes.

Fidelity provides you with several options for your core position; that’s where SPAXX and FDIC come in.

But, of course, a savvy Fidelity investor will want to consider all available options and find out their pros and cons to optimize their investment, and that’s okay.

Here’s the difference between the two Fidelity core positions in a nutshell.

SPAXX offers you better interests, while FDIC provides you better safety for your money.

This SPAXX vs FDIC analysis makes your choice process less difficult by extensively assessing the two.

SPAXX vs FDIC: Picking The Right Fidelity Core Position (1)

Table of Contents

What Is The Fidelity Core Position?

Usually, your “Core Position” is how you hold the uninvested cash in your account. So, for instance, if you have $1,000 in your account, not invested into anything, the money goes into any investment vehicle you choose as your core position.

Fidelity’s core position, then, is where the uninvested cash in your Fidelity account goes.

Once you open a Fidelity account, Fidelity automatically provides a core position to hold uninvested money and process your transactions.

Fidelity’s core position makes it possible to earn interest on your idle cash, just like a savings account.

(Video) SPAXX vs. FDIC: Which Fidelity Core Position Is Better?

A core position acts as a wallet; when you make a transaction, money in your wallet is used to process the transaction.

In the same way, when you sell something, the proceeds go into your wallet.

When you buy a security, cash in your core position is used to pay for the trade, and when you sell a security, the profit goes into your core position.

In addition, you can use it to process electronic funds transfers, wire transfers, direct deposits, and other payments available on the platform.

Fidelity gives you a few different options to hold your cash. These include SPAXX, FDIC, FDRXX, and FZFXX.

SPAXX Description

Category: U.S. Govt Money Mkt
Portfolio Style: U.S. Govt Money Mkt
Fund Inception: February 5, 1990
Expense Ratio: 0.06%

SPAXX is the ticker symbol for Fidelity Government Money Market Fund. Launched in 1990, SPAXX remains the most widely held Fidelity fund in the money market fund category. The fund seeks to achieve high-yield returns through high liquidity and capital preservation.

SPAXX typically invests at least 99.5% of its total assets in cash, U.S. government securities, or repurchase agreements that are collateralized fully (i.e., collateralized by cash or government securities). In addition, it typically invests at least 80% of its assets in U.S. government securities and repurchase agreements for those securities.

The fund invests in U.S. government securities issued by entities chartered or sponsored by Congress but whose securities are neither issued nor guaranteed by the U.S. Treasury.

The SPAXX’s top holdings included the following:

  • U.S. Government Repurchase Agreements (49.75%)
  • U.S. Treasury Bills (24.28%)
  • Agency Floating-Rate Securities (11.57%)
  • Agency Fixed-Rate Securities (7.62%)
  • U.S. Treasury Coupons (6.31%)

Composition by Instruments:

SPAXX vs FDIC: Picking The Right Fidelity Core Position (2)

From these top holdings, it’s evident that SPAXX is a broad-range investment. The fund’s annual expense ratio is 0.06%, and the dividend yield is 0.01%. Its one-year total return is 0.00%.

When you deposit cash into your Fidelity account, SPAXX will automatically be used to hold the money. The same applies to your core balance, uninvested cash that may be remaining in your account. Therefore, it’s not wrong to describe SPAXX as a core cash position.

FDIC Description

FDIC means Federal Deposit Insurance Corporation. The acronym FDIC refers to a government agency in the United States that insures cash deposits at its member banks, generally up to $250,000 per account.

As a member bank of FDIC, Fidelity runs an Insured Deposit Sweep Program on the Fidelity Cash Management Account. The Program allows Fidelity to sweep the uninvested cash balance in specific Fidelity accounts to one or more of its member banks where the FDIC insures it.

(Video) SPAXX vs. FDIC vs. FDRXX vs. FZFXX - Fidelity Core Position

These program banks’ accounts are interest-bearing accounts while assuring the individual of security.

Therefore, the “FDIC-Insured Deposit Sweep” is a core position to hold uninvested cash in certain Fidelity accounts.

The reason for a Fidelity “FDIC-Insured Deposit Sweep” is security, basically to guarantee customers get their money paid back in the case of any problems.

While the FDIC insurance coverage limit at each bank is $250,000, $5,000 is reserved for accrued interest. For example, a customer with a $500,000 cash balance would have:

  • The first $245,000 swept into the first bank on the Program Bank List.
  • The next $245,000 swept into the second bank on the Program Bank List.
  • Finally, the remaining $10,000 swept into the third bank on the Program Bank List.

After establishing an account, you may select a different Program Bank List.

What’s the Difference Between SPAXX and FDIC?

The main difference between SPAXX and FDIC is their dividend yield. SPAXX pays a 1.25% dividend yield while FDIC pays 0.01%.

To arrive at a conclusion for SPAXX vs FDIC, a pivotal point is that both SPAXX and FDIC are options to hold your uninvested cash with Fidelity.

In a Fidelity Government Money Market Fund (SPAXX), your money is invested in a mutual fund and earns daily dividends paid to you monthly.

FDIC-Insured Deposit Sweep Program (FDIC) is an interest-bearing position eligible for FDIC insurance.

Once you make a cash deposit into your Fidelity account, the uninvested cash will be placed in SPAXX automatically.

But then, if you decide to change your core position, FDIC is one of the money market funds’ options available to you.

These products were developed after investors lost money in their money market accounts in 2008, which was never supposed to happen.

SPAXX is a money market fund where you are not insured or guaranteed anything and can lose money. This is supposed to be very unlikely, but there’s a possibility.

Expense Ratio

SPAXX has an expense ratio of 0.06%, while FDIC has an expense ratio of 0.01%.

As a result, SPAXX has a higher expense ratio, although a 0.5% difference may not heavily impact your returns.

The winner here, though, remains FDIC-Insured Deposit Sweep Program (FDIC).

(Video) SPAXX vs. FDRXX, FZFXX, FDIC, & FCASH - Fidelity Core Position 2.0 (Updated 2023)

Interest Rate

Although the difference between the two interest rates is small, SPAXX still offers a better interest rate. This is not surprising since the fund earns daily dividends, having a broad range of investments to its advantage.

SPAXX: 1.25%

FDIC: 0.01%

Remember, the investment goal is profit, and the difference between the two can be significant if the money involved is huge.

SPAXX vs FDIC: Picking the Right Fidelity Core Position

The big idea behind SPAXX is to preserve and grow your uninvested cash through a little interest. So your money won’t experience volatility and may not grow so fast, but it doesn’t go down either.

SPAXX is similar to a savings account; it pays interest and lets you withdraw your money when you choose.

SPAXX vs FDIC: Picking The Right Fidelity Core Position (3)

Fat FIRE: Early Retirement In Style!

However, interests are lower compared to most savings accounts. Nevertheless, it’s an excellent place to hold your idle cash and make a few bucks with interest, and it can be a way to achieve short-term savings goals.

The FDIC-Insured Deposit Sweep Program gives you security for your uninvested cash via FDIC insurance. Good enough, you can insure up to $250,000 per account.

So, while you’re not getting any addition on your money, they are in safe hands.

(Video) Fidelity Core Position Explained FAST! - Financial Dad Quick Tip #16

If your bank goes out of business suddenly or the money market funds drop value, you can have a safe place.

Which Core Position Is Better SPAXX or FDIC?

The whole “core position thing” aims to have a place where you can hold your money till you’re ready to invest it in securities or any other thing. Of course, some people will say, “it doesn’t matter; just pick one randomly,” which is not a bad idea.

However, this SPAXX vs FDIC analysis shows that each fund has its edge.

The FDIC-insured cash sweep program becomes a perfect match if your primary concern is to beat volatility and shield your money against possible risks.

On the flip side, if you care about return and yield, a government money market fund is the right pick.

But, as an investor, you want to seize every opportunity to make more profit, so, no lengthy analysis, go for SPAXX.

Although interest rates are extremely low currently, if it rises in the future, SPAXX will provide higher returns.

Related Posts:

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SPAXX vs FDIC Winner

The purpose of an investment account is clear; multiply your money by putting it into promising investment opportunities.

Keeping your money in an account that doesn’t offer the slightest interest is against the rule. And this is particularly essential for young people trying to secure their financial future with retirement accounts like the Roth IRA.

Choosing between the two Fidelity core positions is easy if you can identify the difference between the two.

SPAXX and FDIC are different options to park your cash. Both yields are negligible, and you’re not necessarily more or less safe in either.

However, SPAXX offers better interests, and that’s the number one goal of every investment.

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This post may have affiliate links, which means I may receive commissions if you choose to purchase through links I provide (at no extra cost to you). Thank you for supporting the work I put into this site!

(Video) SPAXX vs FZFXX: Which Is the Best Fidelity Core Position?

This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.


Should my core position be SPAXX or FDIC? ›

If money does end up in the core position, since this is an investment account you want to optimize growth. Interest rates are currently extremely low, but if they rise in the future, SPAXX will provide higher returns, so choose it. TL;DR: It doesn't matter, but pick SPAXX.

Is SPAXX covered by FDIC? ›

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.

What is the core position for Fidelity? ›

When you open a Fidelity account, a core position is set up to process cash transactions and to hold uninvested cash.

What type of Fidelity account should I open for stocks? ›

Pick an account

It depends on why you want to invest. For retirement, options include a traditional IRA, Roth IRA, rollover IRA. For general investing and trading, investing for a big goal (like the down payment on a house), or simply giving your money the potential to grow, consider the Fidelity brokerage account.

How do I get my money out of Fidelity Spaxx? ›

The withdrawal will automatically come from the cash core in your account. We can walk you through it step by step in an online chat: or take care of the transfer for you over the phone at 800-544-6666. I hope this helps. I'm glad you were able to get it taken care of, Greg.

Is SPAXX better than a savings account? ›

It historically offers better interest rates than just sitting in a bank account while still being very liquid and safe (so it won't go down in value and you can get your money out any time). CURRENTLY, SPAXX is paying 0.01%. That's true for almost every cash account because rates are so low.

Can you change core position in Fidelity? ›

Although you can have only one core position, you can still invest in other money market funds. If you would like to change your core position after your account has been established, you can do so online or by calling a Fidelity representative at 800-544-6666.

Is Fidelity government money market safe? ›

Stability & safety

While not insured by the FDIC, the funds are required by federal regulations to invest in short-maturity, low-risk investments, making them less prone to market fluctuations than many other types of investments.

Why do I have Spaxx Fidelity? ›

It's the amount of cash available to invest

It's the same thing as cash, it'll show up as your available for use money to invest.

Is Fidelity core account FDIC insured? ›

Your Cash Balance while held by Fidelity and in transit to or from a Program Bank is not FDIC-insured but is covered by SIPC. For more information regarding FDIC insurance, please consult

How to read Fidelity positions? ›

The Positions page shows the number of units, value per unit, and total value for investment options held in a tax-deferred annuity. You can click an investment option name to display the daily unit value. The Positions page indicates the value of your income had a payment been made on the date shown.

Which is better SPAXX or Fdrxx? ›

Based on my prior research, FDRXX is strictly better than SPAXX (lower expense).

What is the average account balance at Fidelity? ›

You're not alone: A seven-figure 401(k) balance is the exception, not the rule. The average 401(k) balance at Fidelity was $97,200 in the third quarter of 2022, the most recent data available.

What is the average account balance at Fidelity Investments? ›

The average retirement account balance for 401(k) plans dropped 23% to from $126,100 at the end of the third quarter in 2021 to $97,200 in Q3 2022, Boston-based Fidelity said in a quarterly view into participant activity.

What is the safest fund at Fidelity? ›

What is Fidelity's safest fund? The safest Fidelity funds are those in the lowest-risk categories. While it's not possible to determine which specific fund has the absolute lowest risk, the categories with the lowest Morningstar risk ratings are cash reserve and money market funds.

How often does Spaxx pay? ›

Schedule monthly income from dividend stocks with a monthly payment frequency.

How do I withdraw money from my core portfolio? ›

If a client needs to make a withdrawal, Customer Service can be reached anytime at 866-484-3658, and we'll send a check or wire. A client can also transfer money online to another account and withdraw it from there.

Can I withdraw core cash Fidelity? ›

Available to Withdraw

Cash Only (Core + Other Money Markets) amount collected and available for immediate withdrawal. This balance includes both Core and other Fidelity Money Market funds held in the account. This balance does not include deposits that have not cleared.

Which is better Fidelity government money market or Treasury money market? ›

Fidelity U. S. Treasury money market fund is the safest of the lot while Fidelity U. S. Government Reserves and Fidelity Government Money Market Fund are a close second. Money market funds investing in commercial paper or debt issued by municipalities tend to carry a bit more risk.

What is better SPAXX Fzfxx or Fcash? ›

Yes, SPAXX and FZFXX have slightly higher interest than the FCASH account, so that's what I would choose.

Is Fidelity Government Money Market Fund FDIC insured? ›

Insurance: Money market funds are not insured by the FDIC. The Securities Investor Protection Corporation (SIPC) provides insurance for brokerage accounts that hold money market funds.

What does core position mean? ›

Core Positions are Long Positions or Short Positions that satisfy both the Manager's fundamental and technical research criteria. Trading Positions are Long Positions or Short Positions that satisfy the Manager's technical research criteria only.

Can I group my positions in Fidelity? ›

Group by Account or Position

Now you can organize your positions either by account or position (security). "Group by Account" shows all positions within each selected account. "Group by Position" shows a list of positions and the account(s) in which each position is held.

Does Fidelity SPAXX charge fees? ›

Distribution and/or service fee(12b-1) Fees

Prospectus Net Expense Ratio is 0.42% as of 6/29/2022 and may not include certain voluntary reimbursements and waivers that reduce the actual expenses of the fund.

What is SPAXX Fidelity government money? ›

Fidelity Government Money Market Fund (SPAXX)

The fund is typically 99.5% or more invested in cash or cash equivalents in the form of short-term U.S. government securities or repurchase agreements that are fully collateralized by cash or such securities.

What is the difference between government and Treasury money market fund? ›

Different types of money market funds include: Treasury funds, which are 99.5% invested in cash and US Treasury securities. Government money funds that invest more than 99.5% of their assets in government securities or cash, or in repurchase agreements collateralized by either.

Is it better to have FDIC or SIPC? ›

SIPC protection is not the same as protection for your cash at a FDIC-insured banking institution because SIPC does not protect the value of any security. It's worth noting that SIPC insurance does not cover the value of your stocks, bonds or other investments.

Should I choose FDIC or SIPC? ›

Protecting your assets. FDIC insurance protects your assets in a bank account (checking or savings). SIPC insurance, on the other hand, protects your assets in a brokerage account.

Is Fidelity core account FDIC-insured? ›

Your Cash Balance while held by Fidelity and in transit to or from a Program Bank is not FDIC-insured but is covered by SIPC. For more information regarding FDIC insurance, please consult

Does it matter if a bank is FDIC-insured? ›

Deposit insurance is one of the significant benefits of having an account at an FDIC-insured bank—it's how the FDIC protects your money in the unlikely event of a bank failure. The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.

Where should my cash be held when it's not invested? ›

A checking account can help cover daily spending needs, check-writing, and ATM usage. Bank checking accounts are insured by the Federal Deposit Insurance Corporation (FDIC), an independent agency of the US government, against the loss of up to $250,000 per depositor, per insured bank, based on account ownership type.

Is Fidelity 401k FDIC insured? ›

Are 401(k)s Protected? Retirement accounts, such as 401(k) plans are protected from creditors and related lawsuits. However, they are not protected from failure of the 401(k) administrator the same way that bank accounts are protected by the Federal Deposit Insurance Corporation (FDIC).

How much does FDIC cover in one bank? ›

The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The FDIC insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank.

Do millionaires worry about FDIC insurance? ›

Millionaires don't worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank. Other millionaires have safe deposit boxes full of cash denominated in many different currencies.


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