Advice on switching to Fidelity CMA

John_M

I've been through all the posts on this topic to try to figure out how this works in Quicken. I understand that the CMA is downloaded as a brokerage account and that it works best when one of the two default investments (SPAXX or the FDIC-insured sweep) is used. I also know that the Windows version has the option to "Show cash in a checking account" but the Mac version does not.

What I'm wondering is whether there are too many hoops to jump through to make this work like a regular checking account. Will the transactions download so that I can match them to ones I enter into the register (I usually enter them first and then match)? Are there separate and distinct downloaded transactions for each one, rather than one that rolls up all the transactions during a single day?

I'd like to open a CMA, but if it's going to cause a lot of extra work managing it in Quicken, then I'll not bother. Any advice from those who have experience with this would be much appreciated!

By the way, I also read that the option to "Show cash in a checking account" is a planned enhancement, but it's been that way for several years, so I don't know how long I might have to wait for this to happen.

Jon

It works pretty much like a checking account in Quicken. You have to specify that the transactions are Payment/Deposit in the Type column, but that's really the only extra thing you have to do compared to a checking account. The individual transactions download just like any other account.

As long as you're keeping your cash in one of the core options you don't see any activity to/from core. If you want to keep your money in a different MMF then you will have buy & sell transactions for that MMF, and the sell transactions won't necessarily match up to individual withdrawals - if you have multiple withdrawals in the same day they will just have one sell at the end of the day for the total amount they need to cover the withdrawals. (At least that's my recollection of how it worked, it's been a couple years since I moved everything into SPAXX.) But those sell transactions are in addition to the individual payment transactions, they don't replace them, so you still see specifically where the money is going & can categorize your payments.

Overall I don't find it's more work for me than a checking account, the only annoyance is that it isn't grouped with my other cash accounts. I should note that I don't use auto-reconcile, nor do I reconcile to the online balance. I reconcile to the statement from Fidelity at the end of the month. I think that helps avoid some of the issues that other people are having right now.

John_M

@Jon Thanks for your detailed response. I also still reconcile my accounts only at the end of a month (although I do try to make sure the balances agree with the online balance during the month as I'm always on the lookout for fraud). If you look at the balances during the month, do you see any discrepancies? What are the "issues that other people are having right now" that you refer to?

John_in_NC

I think your concern should be more about how easy Fidelity makes this.

Making your investment account within Quicken more "checkbook like" is easy as Jon notes. And reconciling is equally easy. (I don't think the QWin way of showing cash in a separate, faux account would make your life easier. Be careful of what you ask for with that. :-) )

My brokerage likes to make my investment account appear as "easy cash" as well with checks and a debit card. I have utilized those features a few times. The issue is that any "cash" you keep is held in a low interest MMF. That requires zero user involvement. If you move into higher interest bearing cash accounts, then it gets treated as buys/sells into that fund.

In my case, moving $ in/out of those funds requires some manual intervention such as emailing/calling broker. How automated Fidelity makes this is the big question. If it is automated-great!

But, even in my case, the extra intervention is worth the higher interest. I don't see it any different as moving $ between savings and checking.

Jon

If you choose to keep your money in a non-core MMF, then Fidelity will sell that automatically to cover withdrawals after the core fund is depleted. But they won't automatically put deposited funds back into that non-core MMF, you have to do that yourself. So it's half automatic, half manual. The interest rate on the other MMFs I've looked at isn't hugely different from SPAXX but some may have their dividends treated differently wrt state income tax. The other core option for the CMA, FCASH, does offer significantly lower interest than the MMFs but provides FDIC insurance for those that want that.