Fidelity offers savings accounts, but not through a traditional high-yield savings product
Fidelity does not operate a standalone high-yield savings account the way banks like Marcus or Ally do. Instead, Fidelity offers two cash management vehicles that serve a similar purpose: the Fidelity Government Money Market Fund and Fidelity Cash Management Account. Both hold your cash and pay interest, but they work differently and carry different rate structures.
If you already have a Fidelity brokerage account, you can move cash into either product without opening a separate account. If you do not have a Fidelity account, you would need to open one first—which most people do to access their investment or retirement accounts anyway.
The rates on both products change daily and are not fixed. Fidelity publishes current rates on their website, but you should check directly before moving money, because rates shift with Federal Reserve decisions and market conditions.
Key Takeaways
- Fidelity's cash management account and money market fund both pay interest on cash balances, but neither is marketed as a high-yield savings account.
- Rates on Fidelity cash products are variable and change with market conditions, so the rate you see today may not be the rate you earn next month.
- You must already have or open a Fidelity brokerage account to access these products—there is no standalone savings account option.
- Money market funds at Fidelity are mutual funds, not bank deposits, so they are not covered by FDIC insurance.
How Fidelity's cash management account works
The Fidelity Cash Management Account is designed to hold uninvested cash in your brokerage account and sweep it into interest-bearing vehicles automatically. When you deposit money, Fidelity moves it into money market funds or other short-term instruments that pay interest. You can withdraw the cash at any time without penalty.
This product is useful if you keep cash in a Fidelity brokerage account for trading or as an emergency fund. The interest rate is higher than a traditional savings account at most banks, but lower than some standalone high-yield savings accounts offered by online banks. Fidelity does not publish a single rate—instead, the cash earns based on the underlying funds it is swept into, which varies.
Deposits are not FDIC insured because the cash is held in mutual funds, not a bank deposit account. However, Fidelity itself is a brokerage firm regulated by the SEC and FINRA, and your account is protected under the Securities Investor Protection Corporation (SIPC) up to $500,000 for cash balances.
Fidelity Government Money Market Fund as an alternative
The Fidelity Government Money Market Fund is a mutual fund that invests in short-term U.S. Treasury securities and other government debt. It pays interest daily and you can redeem shares at any time. The fund carries an expense ratio (a small annual fee), which reduces your net return.
This option appeals to investors who want their cash in government-backed securities rather than swept into a mix of money market instruments. The rate fluctuates based on what the fund earns from its holdings, and Fidelity publishes the current yield on the fund's fact sheet.
Like the cash management account, this fund is not FDIC insured. The underlying securities are backed by the U.S. government, but the fund itself is a mutual fund investment, not a bank deposit.
How Fidelity's rates compare to other options
Fidelity's cash products typically pay less than dedicated high-yield savings accounts at online banks. As of early 2024, online banks like Marcus, Ally, and American Express offered rates above 4%, while Fidelity's rates were generally lower. However, rates change constantly, so this comparison may shift.
The trade-off is convenience: if you already use Fidelity for investing or retirement accounts, keeping cash there means fewer logins and one consolidated statement. If you are purely looking for the highest rate on savings, a standalone high-yield savings account at an online bank will usually beat Fidelity.
Fidelity also offers sweep options into partner bank accounts through some of their products, which may offer FDIC insurance. Check with Fidelity directly about whether your specific account type includes bank sweep features.
SIPC protection versus FDIC insurance
A key difference between Fidelity's cash products and a traditional bank savings account is the type of protection. Bank savings accounts are covered by FDIC insurance up to $250,000 per depositor per bank. Fidelity's money market funds and cash management accounts are not bank deposits, so FDIC insurance does not apply.
Instead, Fidelity accounts are protected under SIPC, which covers up to $500,000 per account (including up to $250,000 in cash). SIPC protects you if Fidelity fails or goes out of business, but it does not protect against market losses in the funds themselves. If the money market fund's value drops, SIPC does not restore it.
For most people, this distinction matters only in extreme scenarios. Fidelity is a large, established firm and has not failed. But if safety is your top priority and you want FDIC insurance, a bank savings account is the more direct choice.
How to move money into Fidelity cash products
If you have a Fidelity brokerage account, you can deposit cash by bank transfer, wire, or check. Once the money settles (usually one to three business days), you can move it into the cash management account or money market fund through your account dashboard.
The process is straightforward: log in, navigate to the cash or money market section, and select the amount to invest. There are no minimum balances required for most Fidelity cash products, though some money market funds may have small minimums (typically $1,000 or less).
Withdrawals are equally simple—you can move money back to your linked bank account or keep it in the cash product. Fidelity does not charge fees for these transfers, though your bank may charge for incoming wire transfers.
When Fidelity cash products make sense
Fidelity's cash options work best if you already have a brokerage account and want to earn interest on uninvested cash without opening another account elsewhere. They are also useful if you trade frequently and need quick access to cash without moving money between institutions.
They make less sense if your only goal is to find the highest savings rate. In that case, comparing rates across online banks and choosing the one with the best current rate will usually serve you better. You can always move money between banks if rates change.
Fidelity cash products also work well as part of a larger investment strategy—for example, holding cash in Fidelity while you wait for the right time to invest, or keeping an emergency fund in the money market fund while your long-term investments sit in stocks or bonds in the same account.
Frequently Asked Questions
Can I open a Fidelity savings account without a brokerage account?
No. Fidelity's cash products are only available within a brokerage account. You must open a brokerage account first, then move cash into the money market fund or cash management account. The brokerage account itself is free to open and maintain.
What is the current interest rate on Fidelity's money market fund?
Rates change daily and vary by fund. You can see current yields on Fidelity's website by searching for the specific fund name. Rates are also listed on the fund's fact sheet, which updates regularly. Check directly before moving money if the rate matters to your decision.
Is my money safe in a Fidelity money market fund?
Your account is protected under SIPC up to $500,000 if Fidelity fails. However, money market funds are not FDIC insured, and if the fund's value drops due to market conditions, that loss is not covered. For most people, Fidelity's size and stability make this a low risk, but it is not the same as a bank deposit.
Can I transfer money from a high-yield savings account at another bank into Fidelity?
Yes. You can link your bank account to Fidelity and transfer money in. The transfer usually takes one to three business days. Once the money arrives, you can move it into the cash management account or money market fund.
Does Fidelity charge fees for holding cash in a money market fund?
Money market funds charge an expense ratio, which is a small annual fee deducted from the fund's returns. The expense ratio varies by fund but is typically very low (often under 0.1%). There are no separate account fees for holding the fund itself.