Fidelity Money Market Funds
As we talked about earlier, money market funds are different than money market savings accounts, but so long as we are looking at them, we should definitely look at Fidelity money market funds. Our goal here at Money Market Rates 101 is to ensure that you have the best information available as quickly as we can get it to you.
Fidelity is a large investment bank that holds a lot of assets and investment funds. Those who trade with Fidelity will be interested to know what money market funds at Fidelity have to offer. Three types of Fidelity money market investments are available: standard money market funds, national municipal funds, and state municipal funds.
Some individual state investments can have a slightly higher payoff than others, so investing directly into funds from them can give a higher yield. Of course, this has a higher research requirement and usually a longer term for maturity, but they can be worthwhile. For the most part, however, money market funds at Fidelity are in two basic types: taxable and municipal.
Fidelity money market funds in the taxable category are often used to soothe volatile retirement investments or hold money in the short term for instant removal for other investment opportunities. Fidelity money market investments in this taxable arena are currently producing 0.92% annual percentage yields (APY), but are taxable.
Fidelity money market funds in the municipal funds arena (usually non-taxable) have a lower return rate, but are not taxed. Currently, money market funds at Fidelity in this municipal fund are paying out 0.14% APY. Both this and the above example assume $2,500 (minimum) to $5,000 investment.
Investments over $25,000 yield 0.97% in taxables and 0.34% in municipals in those same Fidelity money market funds.
Of course, money market funds are not FDIC insured, as they are investments, but for those who use Fidelity money market funds to hold their cash between investments, they can be a great way to hedge your portfolio. Of course, rates change daily and the Fidelity money market is no different.