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On Brokerage Accounts why is cash shown.

On Brokerage Accounts with Fidelity and Amazon why is there a cash balance. They only use MM accounts for cash. You cannot delete an account that does not exist but the amount in cash is added to the other amounts in the Brokerage register. Why.

Answers

  • BoatnmaniacBoatnmaniac SuperUser ✭✭✭✭
    I can't speak to Amazon but while Fidelity holds our cash in a Core Fund (a MMF) it still treats it and reports it as cash.  If you log into your online Fidelity account and click on the Positions tab you will see the Core MMF holdings.  If you then click on the Balances tab you will see that the Core MMF holdings are included in "Cash".  When I talk with my Fidelity Advisor he will often speak of  "Core Fund" and "Cash" interchangeably.  So, I've gotten used to doing the same.
    I don't know if it is the same with QM as it is with QW but this has occasionally caused me to have a couple of total account balance issues in Quicken:
    1. I used to have my Fidelity accounts set up to reinvest dividends from my Core MMFs.  Fidelity would then download reinvested dividend transactions adding shares for the MMFs but Fidelity would also download those dividends as Cash thereby doubling the value of those dividends in my Quicken accounts.  I fixed this issue by changing those reinvested dividends transactions to simple dividend transactions and by changing my dividend preferences in my Fidelity accounts to have the dividends just paid into my accounts' cash holdings (which by default will still be used to buy Core MMF shares but they will no longer be transacted and downloaded as reinvested dividends).
    2. When taking cash out of my accounts at Fidelity or when doing a security buy at Fidelity, Fidelity will sell some of my Core MMF holdings to cover the withdrawal or security buy.  Fidelity will then download that as a Core MMF sell transaction which puts the money into "Cash" in Quicken increasing "Cash" when it really hasn't been increased.  When this happens, I simply delete the Core MMF sell transactions that get downloaded.
    Fidelity is not the only investment company that manages Cash this way.  And others will report Core MMF holdings instead of Cash which to me is more logical and I think would be easier to work within Quicken but I'm not about to move my accounts at Fidelity because of this.
    (QW Premier R26.23 on Windows 10)
    If my reply has helpful to you, please "Like" it so others may know it might help them, too.
  • Chris_QPWChris_QPW Member ✭✭✭✭
    Given that this is an investment account the transactions have to be downloaded using the OFX protocol directly from the financial institution (and it would be the same information for Mac or Windows).  And it is entirely up to the financial institution of what transactions they send.

    I have both a Fidelity account and Vanguard accounts.
    Dealing with it as cash certainly cuts down on the transactions.
    Say I buy XX share of a security in both.

    In Fidelity that would be one transaction, the buy.
    In Vanguard it would be two.
    One would be the sell of "cash security" and the other is a buying of the security that I wanted.

    Which ever method is used, works just fine as long as you don't try to "fight it".
    If I was going to try to treat cash in the Fidelity account like a security then I'm going to have to manually add the buys and sells in and out of it.

    If I was going to try to treat the Vanguard accounts as cash in the account I would have to delete the transactions Vanguard sends for transferring money in and out of them.
    (I'm using the latest Quicken subscription version)
  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited May 23
    In my Fidelity accounts, I just carry cash as cash.  Eliminates all the hassles of buying and selling Money Market funds with every other Fund/Stock transaction.
    And, I don't have my MMFs set to download ... but the cash transactions still download and for my taxable account and my wife's taxable account they just show up in the "Linked Cash Accounts". 
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • bobrsfbobrsf Member
    I typed a mistake stating "Amazon" instead of "Vanguard" in my question.
    After responses I reviewed Fidelity Website and the Core Account matches the amount in the MM account. The cash amount in QM matches the Core-mm account on Fidelity Website and the total of the account is matched in Fidelity Website and QM.
    On the Vanguard Website the Core matches the amount in the MM account but in the QM there is a "cash" account that does not match the amount in the Vanguard website core-mm accounts. It also causes the total in the QM to differ from the total for the account in the Vanguard Website. One of the responses stated that MM were not scheduled to download but they are part of the transactions in the account and are downloaded when the account downloads. What am i missing?
  • Chris_QPWChris_QPW Member ✭✭✭✭
    Well Vanguard does work differently from Fidelity as I pointed out, so you can't directly relate answers for it for your situation.

    Please note that all the users above are Windows users so the details of exactly what it looks like in Mac might be somewhat different, but in general this should all apply.

    In the case of Vanguard you should never have a cash balance of any length of time.
    The cash balance will be "used", but should basically zero out as soon as the corresponding transaction is downloaded.

    Here is an example buy transaction.

    And here is a reinvestment transaction.

    And here is a dividend paid that wasn't reinvested.

    So what you need to do it find out where you balance stopped being zero.  And that should lead you to either a missing transaction (like a buy of the "cash" money market fund) or a transaction that has the wrong action, like Dividend, when it should be ReinvDiv.

    BTW reconciling of an investment account would catch this.
    To reconcile an investment account at any given time you would first make sure that all your securities have the right number of shares (the portfolio should be a good place to do this).  And then only after that is don't you would reconcile the "cash".  And in this case that cash balance should always be zero, because your cash is in the money market fund.

    Once you locate where it went wrong then maybe someone can suggest what might have happened.  One thing I can say is that blindly accepting what is downloaded into an investment register is bound to run into problems sooner or later, because the financial institutions don't always get the right actions put in, especially around transactions that involve company mergers and fund changing to another fund and that kind of thing.
    (I'm using the latest Quicken subscription version)
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