Fidelity Cash Reserves Interest Rate and Cash Management

Fidelity Cash Reserves interest rates are variable and tied to the Federal Funds rate, which is set by the Federal Reserve. This means that the interest rate on your Fidelity Cash Reserves account can fluctuate over time.

Fidelity Cash Reserves accounts are designed to help you manage your cash and earn interest on your deposits. You can earn interest on your cash reserves by keeping a minimum balance in your account.

Interest is compounded daily and credited monthly, so you'll see the interest added to your account at the end of each month. This means you can earn interest on your interest, which can add up over time.

Fidelity Cash Reserves accounts are liquid, meaning you can access your money at any time without penalty or fees. This makes them a great option for short-term savings or emergency funds.

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The Fidelity Cash Management Account earns a competitive 2.35% APY, which is higher than the national average rate for interest checking accounts of 0.07% APY as of Dec. 16, 2024, according to the FDIC.

This rate is a great way to fight inflation and passively boost your balances outside of your traditional savings account, especially if you already have a Fidelity brokerage account.

You can earn up to 2.35% APY with a Fidelity Cash Management Account, and it has FDIC insurance on balances up to $5 million.

This means you can store your funds with confidence, knowing they're insured up to $5 million.

Here's a comparison of Fidelity's Cash Management Account with other cash management accounts:

Keep in mind that while Fidelity's Cash Management Account has a lower APY compared to some other options, it's still a great choice if you already have a Fidelity brokerage account and want a hassle-free way to manage your cash.

For another approach, see: Fidelity Joint Cash Management Account

Fidelity Cash Management earns 2.35% APY, which is a higher yield than the national average rate for interest checking.

That's a significant difference, especially considering the national average rate is only 0.07% APY as of December 16, 2024.

Fidelity's Cash Management Account also has FDIC insurance on balances up to $5 million, providing an extra layer of security for your funds.

The account is designed to be a storage spot for funds that were recently invested or about to be invested, making it a convenient option for those with Fidelity brokerage accounts.

It behaves like a checking account with free mobile check deposit, bill pay, a debit card, check-writing abilities, and easy transfers to external bank accounts, all with no monthly maintenance fee.

With its high-yield interest rate and FDIC insurance, Fidelity's Cash Management Account is an effective way to fight inflation and passively boost your balances outside of your traditional savings account.

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Fidelity Cash Management compares very well to the national average rate for interest checking accounts, which is 2.35% APY as of December 16, 2024.

If you're already investing with Fidelity, getting a cash management account there makes sense because it has no monthly maintenance fee.

However, other cash management accounts offer higher rates than Fidelity's 2.35% APY, such as Betterment Cash Reserve and Empower Personal Cash, which earn 4.25% and 4.00% APY, respectively.

Betterment Cash Reserve has no monthly maintenance fee, just like Fidelity, but it doesn't offer a checking account feature.

Wealthfront Cash Account, on the other hand, earns a higher yield of 4.50% APY and offers checking account features, along with more FDIC insurance coverage than Fidelity, up to $8 million.

Here's a comparison of the accounts: