My Core Position At Fidelity Investments: A Guide

When you open a Fidelity account, a core position is automatically established, which is used for processing cash transactions and holding uninvested cash. The eligible core positions are determined by the type of account you have. For example, the only eligible core position for the Fidelity Cash Management account is the FDIC-Insured Deposit Sweep, while the Fidelity brokerage account can have Fidelity Cash (FCASH), the Fidelity Government Money Market (SPAXX), or the Fidelity Treasury Fund (FZFXX). The core position is also used for processing checks, electronic funds transfers, wire transfers, direct deposits, and other payments if available on the account.

Eligible core positions are determined by the account type

The core position is established when you open a Fidelity account, and it serves as a "wallet" for processing cash transactions and holding uninvested cash. When you buy a security, the cash from your core position is used to pay for the trade, and when you sell a security, the proceeds are deposited into your core position.

It's important to note that you can only have one core position per account. However, you can still invest in other money market funds outside of your core position. If you wish to change your core position after establishing your account, you can do so online or by contacting a Fidelity representative.

The core position is also used for processing various types of transactions, such as checks, electronic funds transfers, wire transfers, direct deposits, and authorised credit card payments.

Core positions are like a wallet for your account

The eligible core positions depend on the type of account you have. For instance, the Fidelity Cash Management account offers the FDIC-Insured Deposit Sweep as the only core position option, while the Fidelity brokerage account provides a choice between Fidelity Cash (FCASH), the Fidelity Government Money Market (SPAXX), and the Fidelity Treasury Fund (FZFXX). Meanwhile, the Fidelity Government Cash Reserves (FDRXX) is exclusively available as a core position for IRAs and Health Savings Accounts (HSAs).

The core position is not just a holding place for uninvested cash but also facilitates various payment methods, including processing checks, electronic funds transfers, wire transfers, direct deposits, and authorised credit card transactions. It is also used for depositing proceeds from the sale of securities and withdrawing cash to purchase securities.

Fidelity's core positions are underpinned by money market funds, which are fixed-income mutual funds investing in short-term debt securities with minimal credit risk. These funds aim to maintain a stable $1 net asset value (NAV) per share, ensuring that investors' principal investment remains intact.

In summary, core positions at Fidelity serve as a functional wallet for your account, enabling seamless cash transactions, payments, and the holding of uninvested cash. The specific core position options vary depending on the type of account you hold, and they are backed by money market funds to maintain stability and safety for investors.

Core positions are used for processing cash transactions and holding uninvested cash

Core positions are an integral aspect of Fidelity accounts, and they serve two primary purposes: processing cash transactions and holding uninvested cash. When you open a Fidelity account, a core position is automatically established, and this acts as a crucial component of your account's functionality.

Processing cash transactions is one of the key roles of core positions. When you buy or sell securities, the core position is automatically utilised to facilitate these transactions. For instance, when purchasing a security, the cash required for the trade is taken from your core position. Conversely, when you sell a security, the proceeds from that sale are deposited into your core position. This seamless process ensures that you don't need to manually "sell" from your core account to make a purchase, making it a convenient and efficient system.

In addition to facilitating trades, core positions are also used for various other cash transactions. This includes processing electronic funds transfers (EFTs), transactions made with the Fidelity ATM and Visa Gold Card, and payments made through the Bill Pay service. By consolidating these transactions through the core position, Fidelity provides a streamlined approach to managing your cash flow.

Another vital function of core positions is to hold uninvested cash. This aspect is particularly relevant if you have cash in your account that you have not yet allocated towards any specific investment. Your core position acts as a safe repository for this cash, allowing you to earn interest on these uninvested balances. The interest is calculated daily and credited to your account on the last business day of the month. This feature ensures that your cash remains productive even when it is not actively invested in the market.

The eligible core positions available to you depend on the type of Fidelity account you hold. For example, the Fidelity Cash Management account offers the FDIC-Insured Deposit Sweep as its core position, while the Fidelity brokerage account provides options such as Fidelity Cash (FCASH), the Fidelity Government Money Market (SPAXX), or the Fidelity Treasury Fund (FZFXX). Understanding the specific characteristics of these core positions is essential for making informed decisions about your investments.

Core positions are available for retirement and non-retirement accounts

The eligible core positions depend on the type of account you have. For example, the only eligible core position for the Fidelity Cash Management account is the FDIC-Insured Deposit Sweep, while the Fidelity brokerage account can have Fidelity Cash (FCASH), the Fidelity Government Money Market (SPAXX), or the Fidelity Treasury Fund (FZFXX). The Fidelity Government Cash Reserves (FDRXX) is only available as a core position for IRAs and Health Savings Accounts (HSAs).

For retirement and non-retirement accounts, the Fidelity Government fund is available as a core position. This fund invests in government securities and is available to both retail and institutional investors. It transacts at a traditional, stable $1.00 net asset value (NAV) per share.

Additionally, the Fidelity Treasury fund is available as a core position for non-retirement accounts. This fund is also used for processing cash transactions and holding uninvested cash.

Core positions can be changed

If you have an account where FDRXX is an eligible core, you can change it by clicking "Accounts & Trade" and selecting "Account Positions" to expand the core position and select "Change Core Position". If your account is not eligible, you can still buy FDRXX as an investment. FDRXX is a money market mutual fund. To buy it as an investment holding, click "Accounts & Trade" and select "Trade", making sure the desired account is selected, and change the "Trade" box to "Mutual Funds". Complete the required fields and submit the trade.

It's important to note that eligible money markets will be automatically liquidated to cover debits if the core does not have sufficient funding. In the event that a withdrawal is made and the core is depleted, FDRXX would be automatically liquidated.

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