Which Core Position to Choose Fidelity Investments? SPAXX, FZFXX, FDIC or FCASH
Your Fidelity core position determines how uninvested cash is held in your account.
The available options differ in how they invest or hold that cash and the income they may provide.
Your choice can affect how your cash works while it remains uninvested.
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See How to Buy VOOFidelity Core Positions Compared
SPAXX
Government money market fund
Main Trade-OffHigher yield potential, but no FDIC insurance.
FZFXX
Treasury money market fund
Main Trade-OffSimilar yield with a potential state-tax advantage.
FCASH
Fidelity cash balance
Main Trade-OffVery convenient, but lower yield.
FDIC Sweep
Bank deposits
Main Trade-OffInsurance advantage, but yield may be lower.
FZSXX Overflow
Government money market fund
Main Trade-OffUsed for overflow when bank-sweep capacity is reached.
*Yields are illustrative and change regularly; confirm current rates directly with Fidelity before deciding. †FCASH rate as noted in source data.
Note: No fund minimum is required by Fidelity for these core money-market funds.
All instruments are highly liquid;
- SPAXX/FZFXX redemptions settle the same business day, so proceeds are available by the next morning
- FCASH is available immediately, and
- FDIC-sweep is a deposit account.
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SPAXX Vs FZFXX vs SPAXX Vs FDIC-Insured Sweep
The table below compares SPAXX, FZFXX, and Fidelity’s FDIC-Insured Sweep based on yield, taxes, insurance, liquidity, and how each option holds your cash.
| Feature | SPAXX | FZFXX | FDIC-Insured Sweep |
|---|---|---|---|
| What It Is | Government money market fund | Treasury money market fund | Bank deposit sweep |
| Main Holdings | U.S. Treasuries, government securities, agencies and repos | Primarily U.S. Treasury securities and Treasury repos | Deposits spread among participating banks |
| 7-Day Yield* | 3.34% | 3.35% | 1.84% APY† |
| NAV / Value | Targets $1.00 per share | Targets $1.00 per share | Bank deposit; no fund NAV |
| State Tax | Some income may be subject to state tax | Treasury income generally exempt from state tax | State-taxable interest |
| Federal Tax | Taxable | Taxable | Taxable |
| FDIC Insured? | No | No | Yes, subject to FDIC limits |
| SIPC Protection | Yes, subject to SIPC rules | Yes, subject to SIPC rules | Bank deposits are covered by FDIC instead |
| Cash Access | Highly liquid; redeem shares | Highly liquid; redeem shares | Direct cash-style access |
| Best Known For | Convenient brokerage core + competitive yield | Treasury exposure + potential state-tax savings | FDIC insurance + banking features |
| Main Trade-Off | No FDIC insurance | May not be available as a core option in every account | Usually lower yield than money-market funds |
SPAXX and FZFXX are money market funds that invest primarily in U.S. government obligations, while the FDIC-Insured Sweep places cash in participating bank deposits.
FZFXX can provide a state-tax advantage because qualifying Treasury income is generally exempt from state and local income taxes.
The FDIC sweep provides FDIC insurance within applicable limits, whereas SPAXX and FZFXX are not FDIC-insured.
Yields for all three options can change over time, with money market fund yields generally moving with short-term interest rates.
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What Is FCASH at Fidelity?
FCASH is not a mutual fund but a cash sweep option.
So, it is a free credit balance payable on demand.
- Practically, when your core is set to FCASH, uninvested cash simply sits with Fidelity as a cash ledger balance.
- Fidelity may invest these pooled credits and pay you a variable interest rate.
You earn interest daily at Fidelity’s published rate. You can withdraw FCASH instantly and use checks/debit if the account permits.
But, unlike an FDIC sweep, FCASH has no FDIC insurance. It is covered by SIPC as brokerage cash.
Best Core for a Fidelity Brokerage Account
For a standard Fidelity brokerage account: the Fidelity Government Money Market Fund (SPAXX) is generally recommended as the core for most investors.
It maximizes yield among available options and keeps money highly liquid.
SPAXX’s NAV is stable, and it is SIPC-protected, so it’s very safe for amounts < $500K, plus other assets.
I would recommend you use SPAXX if you have moderate cash balances and want convenience.
Here are some alternatives:
| Alternative | Consider It If… | Main Advantage | Main Trade-Off |
|---|---|---|---|
| FZFXX | You live in a state with income tax and hold taxable cash | 1. Treasury-focused fund 2. Treasury income generally exempt from state and local income taxes 3. Similar liquidity to other Fidelity money market funds | 1. Not FDIC-insured 2. Not available as a core option for every account type |
| FDIC Sweep | You want FDIC insurance or expect to hold a large cash balance | 1. Cash is deposited at participating banks 2. FDIC insurance applies within coverage limits 3. Fidelity says eligible accounts can have up to $4 million of FDIC coverage | 1. Rate may be lower than money market funds 2. FDIC limits apply separately by bank 3. Excess cash may move to Money Market Overflow |
| FCASH | You specifically want an interest-bearing cash balance | 1. Payable on demand 2. Automatically functions as the account’s cash balance 3. No money-market fund shares to redeem | 1. Lower interest rate than recent money market yields 2. Rate can change at Fidelity’s discretion |
But you can switch anytime via Fidelity’s website or by calling. It costs nothing and is immediate; only subsequent deposits or dividends will follow the new core.
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Check My Fidelity CoverageBest Core for a Fidelity IRA
In an IRA, tax liability on dividends is deferred.
Therefore, the state-tax advantage of FZFXX is irrelevant inside an IRA. The focus is on yield and simplicity.
- Recommendation: SPAXX remains the workhorse choice for IRAs. It typically offers the highest after-fee yield in Fidelity’s core lineup.
- Alternate: If your IRA is a Cash Management Account or has debit/check features, the same caveats about FDIC vs. yield apply. You might choose an FDIC sweep if you hold a large emergency fund or want guaranteed insurance within your IRA.
IRAs can be more aggressive with core since they’re long-term vehicles, keeping cash in SPAXX yields modestly more.
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See How to Sell a PutBest Core for a Fidelity Cash Management Account (CMA)
Fidelity Cash Management Account (CMA) is a brokerage account with bank-like features such as
- Debit card
- Checkwriting.
For a CMA, Fidelity explicitly offers only two core choices:
- SPAXX (Government MMF) or
- FDIC-Insured Sweep.
| Option | Consider It If… | Main Advantage | Main Trade-Off |
|---|---|---|---|
| SPAXX | You want potentially higher earnings on your cash and do not need FDIC insurance | 1. 3.34% 7-day yield as of Sep. 16, 2026 2. Highly liquid 3. Can earn more than traditional checking accounts | 1. Not FDIC-insured 2. SIPC protection does not cover investment losses |
| FDIC-Insured Sweep | You prioritize FDIC protection and bank-style cash access | 1. FDIC insurance up to $4 million when sufficient program-bank capacity is available 2. Cash remains accessible for spending and withdrawals 3. Works with CMA features such as debit card and checkwriting | 1. Rate is generally lower than SPAXX 2. FDIC coverage is subject to applicable limits and available bank capacity 3. Excess balances may move to Money Market Overflow |
Because CMA is often used for daily spending, many users opt for an FDIC sweep.
It’s essentially a cash account with interest.
Are Fidelity Core Positions Safe?
Yes, fidelity core positions are generally designed to be relatively low-risk places to hold uninvested cash, but the type of protection depends on which core position you choose.
SPAXX is a money market fund and is not FDIC-insured, while its FDIC-Insured Deposit Sweep places cash at participating banks where FDIC insurance applies within applicable limits.
| Core Position | Safety Level | Protection | Main Risk |
|---|---|---|---|
| SPAXX | Low risk | 1. SIPC protection 2. Invests mainly in U.S. government securities | 1. Not FDIC-insured 2. Fund value is not guaranteed |
| FZFXX | Low risk | 1. SIPC protection 2. Invests primarily in U.S. Treasuries | 1. Not FDIC-insured 2. Fund value is not guaranteed |
| FDIC Sweep | FDIC-insured within limits | 1. FDIC insurance 2. Cash spread across participating banks | 1. FDIC coverage limits apply 2. Excess cash may move to an uninsured money market fund |
| FCASH | Cash balance | 1. SIPC protection may apply to eligible brokerage cash 2. Payable on demand | 1. Not FDIC-insured 2. Interest rate can change |
How Does a Fidelity Core Position Work?
The step-by-step process below shows how money moves into, stays in, and leaves a Fidelity core position.
| Step | What Happens |
|---|---|
| 1. Money Enters Your Account | Deposits, dividends, interest, and investment-sale proceeds add to your account’s cash balance. |
| 2. Cash Goes to Your Core | Available uninvested cash is automatically held in your selected core position, such as SPAXX, FZFXX, FCASH, or the FDIC Sweep, depending on your account. |
| 3. Your Cash Earns Income | SPAXX/FZFXX pay money-market dividends, the FDIC Sweep pays bank-deposit interest, and FCASH may pay interest on the cash balance. |
| 4. You Buy an Investment | When you place a purchase, Fidelity automatically uses available core cash to pay for the trade. You don’t manually sell the core first. |
| 5. You Withdraw or Spend | Eligible withdrawals, checks, transfers, ATM transactions, and other payments reduce the available core balance. |
| 6. You Sell an Investment | When you sell a security, Fidelity credits the sale proceeds to your core on the settlement date. |
| 7. The Cycle Repeats | New cash flows back into the core, where it remains available for future purchases, withdrawals, or other transactions. |
If you later buy $3,000 of an investment, Fidelity uses $3,000 from the core position to fund the purchase, leaving approximately $7,000 in the core before considering other transactions or income. If you later sell an investment, the sale proceeds are credited back to the core position on the settlement date.
Can You Change Your Fidelity Core Position?
Yes, you can change your core at any time.
After account opening, simply go online or call Fidelity (1-800-544-6666) to choose a different available core option.
The change is immediate in that future deposits or dividends will go into the new core. There are no fees for switching cores.
To Change Your Fidelity Core Position:
- Log in to Fidelity.com.
- Select the account where you want to change the core position.
- Go to Accounts & Trade – Account Positions.
- Find and expand your current Core/Cash position.
- Select Change Core Position.
- Choose the new core position available for your account, such as SPAXX, FZFXX, FCASH, or an FDIC sweep option.
- Review and submit the change.
Fidelity Core Position FAQ
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