SPAXX vs. FZFXX, FDIC, FCASH, FDRXX – Fidelity Core Position

If you've got a Fidelity investment account, you've probably encountered several options for your “core position” for cash: SPAXX, FDIC, FCASH, FDRXX, and/or FZFXX. Is there a best option for 2026? I review the options and compare them here.

Note that the yields and fees for these options change all the time, so the information and numbers you see on this page may be outdated by the time you see them. Be sure to do your due diligence and check for yourself.

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Fidelity Core Position Video

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Introduction – What Is the Fidelity Core Position?

Your “core position” at Fidelity simply refers to where your uninvested cash goes inside your account. For example, if you have 75% in an S&P 500 index fund like VOO and 25% uninvested cash, that 25% cash will automatically go into whatever fund or vehicle you select as your “core position.”

The core position basically acts as a wallet. When you buy something in your Fidelity account like a stock, you pay for it with money from that wallet. When you sell something, proceeds go into that wallet. The core position also facilitates transactions like check processing, electronic funds transfers, direct deposits, wire transfers, authorized credit cards, and other payments. There is no minimum balance requirement for the core position.

You have several options for how exactly that cash is held, which is why you're on this page in the first place.

First, let's get the obligatory reminder out of the way that market timing is usually more harmful than helpful, and DCA is inferior to investing a lump sum on average, so you probably shouldn't be holding much actual cash in the first place. But note that I'm not referring to something like T-bills or short-term government bonds, which are considered a “cash equivalent,” and which may be a perfectly sensible investment depending on your personal goals, time horizon, and risk tolerance. While several of these funds do indeed have allocations to T-bills, none of these options we're discussing here for the core position would be considered a dedicated T-bills fund like SGOV, for example, which is an ETF, and none of them contain floating rate bonds which are held by a fund like USFR.

By the way, here's the section and button you're looking for in your Fidelity account:

Now that that's out of the way, let's compare SPAXX, FZFXX, FDIC, FCASH, and FDRXX.

Fidelity Core Position Comparison Table

* The CMA FDIC sweep rate and standard brokerage FDIC sweep rate may differ. Check your account directly.
** FCASH is a cash balance, not a security, so it falls under SIPC's $250K cash sub-limit rather than the $500K securities limit. Fidelity's excess SIPC coverage extends this to $1.9M.

A Note on Expense Ratios and SEC Yield

This trips up a lot of people, so let me spell it out. The 7-day SEC yield is already net of the expense ratio. You don't subtract the ER again. When Fidelity says SPAXX's 7-day yield is 3.29%, that's what you're getting after fees. Fidelity reports “7-day yield.” That and “SEC yield” are interchangeable terms.

Why does this matter? Because SPAXX's gross expense ratio is 0.42%, which sounds high for a fund like this, and it is, compared to alternatives like SGOV's 0.09%. But the SEC yield already accounts for it. The comparison to make isn't “SPAXX gross yield minus 0.42%.” It's just “SPAXX 7-day yield vs. competitor 7-day yield.”

During the near-zero interest rate era of 2020-2021, Fidelity applied voluntary fee waivers to SPAXX and other money market funds to prevent the net yield from going negative. At one point, FZFXX's effective net expense ratio was around 0.08%. Those waivers are gone now that rates are high enough to sustain positive yields with full fees. The prospectus gross ER of 0.42% is what's being charged right now.

Ok, now we can dive into the specifics of each option…

SPAXX vs. FZFXX, FDIC, FCASH, & FDRXX

So which Fidelity core position should you go with? Let's talk about 'em.

SPAXX – Fidelity Government Money Market Fund

As the name suggests, SPAXX is what's called a money market fund. This is a fund that holds ultra-short-term instruments that are considered cash equivalents – such as CDs, commercial paper, and repo agreements – in order to pay what is usually a tiny interest rate.

This type of fund usually pays a marginally higher interest rate than that of a plain ol' savings account at a bank, including a high yield savings account. The tradeoff, of course, is that a money market fund is not FDIC-insured.

SPAXX is specifically collateralized by government securities, and would thus be considered safer than a broader money market fund that includes corporate debt. If we look at the holdings of SPAXX, it's mostly U.S. government repurchase agreements, followed by U.S. Treasury Bills and U.S. Treasury Coupons.

We would expect a fund like this to have volatility no greater than about 3% in either direction. At the time of writing, SPAXX has a 7-day SEC yield of 3.43%. (SEC yield is net of fees.)

You may see SPRXX instead of SPAXX. They're both very similar and should have the same fee, but SPRXX is slightly broader in its scope of debt instruments. As such, SPRXX may pay a higher yield than SPAXX.

SPAXX and all the money market funds on this list are insured by the SIPC, which stands for Securities Investor Protection Corporation, up to $500,000 in the event of financial troubles with the brokerage firm. You've probably heard of FDIC insurance for savings accounts. SIPC is basically the FDIC of investment securities.

SPAXX will likely be the primary option in your Fidelity Cash Management Account (CMA) and your Roth IRA.

Let me also explicitly remind you that SPAXX is not a “stock,” and none of these funds hold any stocks. SPAXX is a mutual fund, and specifically a money market fund.

FDIC – FDIC-Insured Deposit Sweep Program

As the name suggests, this is simply an FDIC-insured vehicle into which cash is “swept” inside the account. FDIC stands for Federal Deposit Insurance Corporation, which is quite literally the organization that insures your cash deposits up to $250,000. This is basically a true savings account like you'd have at your regular bank. In fact, Fidelity actually spreads your deposits here among several banks; that's why it's called a “program” and is not an actual investable fund.

Fidelity distributes your cash across approximately 20 participating program banks, each of which holds up to $245,000 of your money in interest-bearing deposit accounts. Because the per-bank limit is set below $250,000 to allow for interest accrual, and because there are roughly 20 banks in the program, you get effective FDIC coverage up to approximately $4-5 million, well above the standard $250K you'd get at a single bank, which is cool.

The cash flows into banks sequentially. Bank #1 fills first (up to $245K), then Bank #2, and so on. If all program banks hit capacity, any remaining cash overflows into FZSXX, the Fidelity Government Money Market Fund, Class S. Note that FZSXX is not FDIC-insured. It's a share class of the same underlying government money market fund as SPAXX, but without the FDIC protection. So if you have more than ~$4-5M in uninvested cash, part of it is sitting in an uninsured money market fund regardless of which core position you've chosen.

A couple nuanced things to note about the FDIC sweep program:

1. You may already have deposits at program banks. Fidelity's bank list includes institutions like JPMorgan Chase, Bank of America, Wells Fargo, and others. If you have a personal checking or savings account at the same bank, those deposits are combined with your Fidelity sweep deposits for FDIC purposes at that institution. So if you have $10K at Chase personally and Fidelity allocates $245K of your sweep to Chase, you'd be over the $250K limit at Chase. You can request that specific banks be excluded from the program by calling 800-544-6666.
2. The rate is lower than it looks. The FDIC sweep rate in the standard brokerage program is approximately 1.39-1.82% (check your account directly, as CMA and standard brokerage may differ). Either way, you're giving up 130-190 basis points vs. SPAXX for FDIC insurance. Whether that trade-off makes sense depends on your balance and your risk tolerance. For balances under $250,000 in a retirement account that already has no FDIC coverage needed, it makes essentially no sense.
3. The rate is negotiated, not market-driven. Fidelity sets the sweep rate with participating banks. The banks pay Fidelity a higher rate and Fidelity passes along a portion to you. The spread Fidelity earns on the FDIC sweep is reportedly several times larger than what it earns from money market fund management fees. This is why FDIC sweep tends to be the default – it's the most profitable option for Fidelity, not necessarily for you.

Because this is basically a plain vanilla savings account, we'd expect it to pay less than the other options on this list, but it can be considered comparatively less risky and less volatile. With this program, your cash is not exposed to any kind of market risk like with others on this list. That said, “less risky” in this context just means we're basically going from extremely safe to riskless.

As of April 2026, this FDIC cash sweep program has an interest rate of 1.82% and also a fee of 0.01%.

It's worth noting that this option may pay less than a high yield savings account.

FCASH

FCASH is another option you'll see in your taxable brokerage account. Note that this is going to be the default option inside your account. This is a free credit balance from Fidelity that earns interest. At the time of writing, its interest rate is 1.82%.

Technically, FCASH isn't a fund at all. It's what's called a free credit balance, essentially Fidelity holding your cash on its books and paying you interest for the privilege. You're effectively a creditor of the brokerage. This is different from SPAXX, where your cash actually goes into a separately managed mutual fund.

With FCASH, the cash stays on Fidelity's balance sheet and Fidelity earns a spread between what it pays you and what it earns by reinvesting that money elsewhere. That spread is how Fidelity generates revenue on idle customer cash, which explains why FCASH is the default for new taxable brokerage accounts rather than SPAXX.

In a high-rate environment, FCASH's rate of approximately 1.82% looks even less attractive next to the ~3.3% you'd get from SPAXX or FDRXX. On $100,000, that's about $1,500/year, for zero additional work. If you opened a new Fidelity account recently and never touched the core position setting, you're probably in FCASH.

A plus for FCASH is the rate is fixed; it doesn't float daily like a money market yield. FCASH also works seamlessly for transactions. It's the wallet; nothing changes operationally. You'll never have any delay because of settlement.

Unfortunately, FCASH doesn't pay you anywhere near as much as the alternatives (since it can't, fundamentally), and it doesn't invest your cash in any actual securities, which matters for SIPC coverage purposes.

SPAXX is a mutual fund – a security – so it falls under SIPC's $500K securities coverage limit. FCASH is cash, which falls under SIPC's $250K cash sub-limit. Fidelity does provide excess SIPC insurance (up to $1.9M per customer on cash) so most retail investors are covered either way, but it's worth knowing the structural difference. If you're holding six figures in your core position, SPAXX is structurally cleaner.

The bottom line is there's rarely a good reason to stay in FCASH over SPAXX.

FCASH will also likely pay less than a simple high yield savings account.

FDRXX – Fidelity Government Cash Reserves

Like SPAXX, FDRXX is another U.S. government money market fund. For all intents and purposes, it is basically an older version of SPAXX. Their holdings are nearly identical and they have nearly the same yield and the same historical returns.

FDRXX launched in 1979 and has a 7-day SEC yield of 3.38%.

FZFXX – Fidelity Treasury Money Market Fund

You may encounter FZFXX as an option in your taxable account. It's basically the same as SPAXX and FDRXX except it does not have the 10% or so in agency securities. This one is entirely U.S. Treasury securities.

In that sense, it is slightly more tax-efficient and thus may appear as a choice for your taxable brokerage account with Fidelity. Its yield should be roughly the same as SPAXX. Right now it is close at 3.31%.

FDLXX is another option you may see that is basically the same thing as FZFXX. FDLXX is the Fidelity Treasury Only Money Market Fund.

Best Fidelity Core Position by Account Type

As I've hinted at in mentioning tax efficiency several times already, there's more nuance to all this – the “best” core position may be different for different account types, and not just because of yield differences. Tax treatment, available options, and what you're actually trying to accomplish vary meaningfully depending on where the money lives.

Taxable Brokerage Account

This is where tax efficiency matters most, because every dollar of interest here gets taxed at your federal and state income tax rate. The good news is interest from U.S. government obligations is exempt from state income tax. The less good news is not all of these funds are as state-tax-exempt as their names imply.

*California, Connecticut, and New York require that 50% of a fund's assets consist of U.S. government obligations at each quarter-end to qualify for state tax exemption. SPAXX, FZFXX, and FDRXX sometimes fail this test, potentially giving their holders zero state tax exemption for the entire year in those states.

Why does FZFXX – the “Treasury” fund – only get 61.52% state-exempt income? Because roughly 40% of its assets are in repurchase agreements (repos) collateralized by Treasuries. Repo income doesn't qualify for state tax exemption under federal law, even if the underlying collateral is all Treasuries. And the allocation fluctuates; sometimes repos account for over 90% of FZFXX's holdings. In that sense, “Treasury Money Market Fund” is a bit of a misnomer.

FDLXX (Treasury Only Money Market Fund), by contrast, holds only direct Treasury obligations. Hence 98.67% state-tax-exempt. You probably won't see FDLXX as a core position option, but you can work around this by just manually buying it if you want. For investors in high-tax states, the after-tax math often favors FDLXX even though it earns a similar or slightly lower gross yield.

For investors in states with no income tax (TX, FL, WA, NV, SD, WY, AK, TN, NH), the state exemption is irrelevant. Just pick whatever pays the highest yield net of fees.

Roth IRA / Traditional IRA / Rollover IRA

State tax efficiency is irrelevant here, as IRAs are already tax-advantaged. The goal is simply the highest yield available. In most IRAs, your options are SPAXX and FDRXX. FDRXX has a lower expense ratio and tends to yield about 8 basis points more than SPAXX with nearly identical holdings.

More importantly, hopefully you don't have much cash in a Roth IRA in the first place. Your core position is not an investment strategy. The best Roth IRA core position is whichever one costs you the fewest nights of lost sleep while you invest the actual cash in something appropriate for your goals. The money market fund is not the destination.

HSA (Health Savings Account)

The logic for an HSA is the same as the IRA – tax treatment of interest is irrelevant inside an HSA. FDRXX is typically the default and the best option.

Fidelity Cash Management Account (CMA)

As of June 2024, Fidelity added SPAXX as a core position option in the CMA alongside the existing FDIC sweep. Previously the only option was the FDIC sweep. If you have a CMA and prioritize yield over FDIC insurance, you can now switch to SPAXX, though you lose the FDIC coverage in doing so.

The CMA defaults to the FDIC sweep for existing accounts. Check yours.

Taxable Brokerage (RIA Custody)

If you're an advisor using Fidelity as a custodian for client accounts, you're stuck with FCASH; it's mandatory for that account type and can't be changed. This is a known (and not-loved) limitation.

Beyond the Core Position – When to Look Elsewhere

If you're parking serious money in any of these core positions for an extended period, you owe it to yourself to check what's available outside the Fidelity core position ecosystem.

The money market funds above are primarily designed for transactional convenience; they're the engine that makes buying and selling work smoothly. They're not necessarily the best place to park cash you won't need for a while.

Here's a quick comparison of some of the main alternatives. Remember yields change frequently; verify before acting.

* BOXX does not actually pay a yield; its whole purpose is to avoid distributions and to instead have the NAV accumulate for return to be taxed as capital gains.

As you can see, the convenience vs. yield trade-off continues. SPAXX's key advantage isn't yield; it's that it auto-sweeps, settles instantly, and you never have to think about it. SGOV requires T+1 settlement, won't auto-liquidate when you buy something, and has a tiny price that fluctuates. For most people with under $10K sitting in their core position, the yield difference between SPAXX and SGOV is under $30/year, which is probably not worth the mental overhead.

For larger balances, the math shifts. On $250,000, SGOV's yield and tax advantages over SPAXX add up to roughly $1,000/year after federal and state taxes (depending on your state). You can even set up recurring automatic ETF purchases of SGOV from your core position in Fidelity, so it almost runs itself.

Direct T-bill purchases are worth a mention for larger balances. You can buy T-bills directly at auction through Fidelity for zero cost, and Fidelity offers an “auto-roll” feature that reinvests them at maturity. 100% state-tax-exempt, no expense ratio. The hassle is minimal if you're not constantly trading. The yields at auction are often 5-10 basis points higher than SGOV or similar ETFs.

BOXX is admittedly complex and likely unsuitable for most retail investors, but it's worth mentioning in this context of cash equivalents. It synthetically extracts a rate resembling T-bills by using box spreads with equity options. It shines for high-federal-bracket, low-state-tax-rate investors. I explained this fund in detail here.

High-yield savings accounts are worth mentioning but usually worth ignoring for taxable investors in income-tax states. They're FDIC insured and currently yielding, but the interest is fully taxable at both the federal and state level. After taxes in a state like California, an impressive-looking HYSA often trails a Treasury money market fund's after-tax equivalent yield despite the higher nominal rate. HYSA rates vary wildly among many different providers out there.

Conclusion

Don't overthink your Fidelity Core Position.

If you are willing to sacrifice return/yield for zero volatility and virtual risklessness, go with the FDIC-insured cash sweep program. If, however, you want a very safe parking garage for cash that would be expected to have a positive nominal return, a government money market fund is a fine choice. Remember too that those money market funds are still SIPC-insured up to $500,000.

For all intents and purposes, the 3 money market funds on this list are nearly the same thing. Out of these, you may simply want to aim for the highest yield.

You can also switch between them at any point based on whichever one is paying the most, but this basically comes down to comparing the money market funds and the FDIC program (banks). You can obviously change your core position at any time online yourself, but if any of this seems overwhelming, you can also call a Fidelity representative to do it for you at 800-544-6666.

Conveniently, interest from the government securities will also be state-tax-exempt.

When looking at the performance of these funds, be sure you're looking at total return that includes dividends/interest, as most of them aim to maintain their principal value of $1.00 while simply paying out interest monthly, a price-return-only chart will obviously look flat.

Any of these would be a fine choice to park unused cash or to hold your emergency fund.

At the end of the day, this is definitely not a decision to lose sleep over.

What's your Fidelity Core Position? Let me know in the comments.

Fidelity Core Position FAQ's

Lastly, here are some frequently asked questions regarding the Fidelity Core Position and its fund options.

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Disclaimer:  While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a research report. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. Hypothetical examples used, such as historical backtests, do not reflect any specific investments, are for illustrative purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.