Handling Money Market funds as cash

neil154

I understand I have Quicken handle money market funds as cash, how can I turn that on and can I easily reverse it if I would prefer?

NotACPA

Simply don't use the BUY transactions and leave the cash in the account as cash. There's nothing to "turn on".

OR, in a non-retirement account, you can click TOOLS, Account List and click EDIT adjacent to the account and check "Show Cash in a Checking account". My most used checking account is at Fidelity Investments and is setup this way. Same for my wife's account.

Jim_Harman

If your broker automatically sweeps cash to a money market fund, the "Show Cash in a checking account" option is not very useful by itself because the checking account balance will drop to zero when the cash moves to the money market fund. If this is happening, you must delete or not accept the downloaded Buy transactions for the money market fund.

I think there is a way to get Quicken to ignore these buys for some but not all brokers, but it does not work for me.

neil154

Thanks, but I would still like to know how to do it. I have both Schwab and Fidelity and Schwab does not sweep but Fidelity does sweep.

Richard Schreyer

go to manage accounts and select fidelity investments and just click on the box

It will create a checking account with the cash balance appearing there. I am using Fidelity Cash Management Account to pay all bills and and receive all deposits. It automatically moves money into the account when needed for payment of bills otherwise it sweeps it into a money market account earning almost 5%. It shows the total balance of cash in the money market account as a checking account balance

neil154

I really do not understand what "show cash in a checking account" does.

Also how is this different than

Jim_Harman

The "Show cash in a checking account" option creates a banking type account in Quicken that is linked to the investing account. Any cash in the investing account, dividends, deposits, or proceeds from sales for example, is automatically moved to the linked checking account rather than appearing as Cash in the investing account. Likewise, when you buy a security in the investing account, the cash comes from the linked account.

The linked account will be included by default in you spending reports. This can be useful if you use the cash in the investing account to pay regular living expenses.

Depending on your brokerage, you may have to delete or not accept downloaded Buys and Sells of their money market sweep fund to get the cash to stay in the linked account.

You should be able to switch this back and forth by changing the "Show cash in a checking account" option, but you should back up your data before changing it just in case…

For more information see this discussion

https://community.quicken.com/discussion/7943672/cash-balances-in-investments

NotACPA

"Show cash … " moves all of the cash type transactions from a non-retirement investment account to a pseudo-checking account, so that you can treat those cash transactions separately … with all of the features of a checking acct vs. the limited options available for cash in an investment account.

That pseudo-account doesn't really exist, but it acts as if it did.

neil154

Okay, so now I understand the cash in checking account, but still not clear on Money Market as cash.

Jim_Harman

No one seems to know what the "Never interpret downloaded money market funds as cash" option does. It may be to help work around problems at brokerages that handle sweep finds inconsistently. More often people want the opposite, to always treat money market downloads as cash.

Chris_QPW

Personally, I believe with "going with the flow".

Some financial institutions will send buy/sell transactions to sweep the cash into a fund when you do a sell and back out when you do a buy.

Others will not. If you try to do the opposite, you will be either deleting transactions or manually entering to get it to do what you want (depending on what you want and what the broker is sending for transactions).

To me the "Show cash in a checking account" option has nothing to do with this. It creates a virtual checking account where the "cash transactions" that are downloaded from the financial institution are pushed to that account. If the broker is doing buys/sells to a fund for the cash these aren't "cash transactions", and as such will not be handled any differently. And if the broker doesn't sweep to a fund with buys/sells then the money will come from/go to the cash balance of the account or be pushed to the virtual checking account if that option is selected.

The only exception to this that in some cases Quicken has the ability to "treat the money fund as cash" and removes the buy/sells for that fund (and note it only works for one fund, in the case of Cash there are multiple cash funds so they can't all be treated this way).

neil154

Thanks for the explanation