HomeFidelity-FaqHow-To-Change-Fidelity-Cash-Plus-Core-Position

Changing Fidelity Cash Plus Core Position

If you're looking to optimize or alter your Fidelity Cash Plus core position, you've come to the right place. Whether you're new to investing or a seasoned pro, understanding and managing your core position in a brokerage account is crucial. Below, we’ll delve into what a core position with Fidelity means, why you might want to change it, the steps involved in making such a change, and answer some common questions about managing your cash in Fidelity accounts.

Understanding Your Fidelity Core Position

What is a Core Position?

A core position is a default investment for uninvested cash in your Fidelity account. This position receives your cash proceeds from sales, dividends, interest payments, and other cash distributions. It also serves as the funding source for many transactions, including buying securities and margin lending.

Why Does Your Core Position Matter?

  • Convenience: Having a core position allows for streamlined financial transactions within your account.
  • Investment Strategy: Depending on the assets available for a core position, they might contribute differently to risk and returns.
  • Liquidity: It needs to provide enough liquidity to easily manage your investments or withdrawals.

Reasons to Change Your Core Position

  1. Interest Rates: If your current core position offers a lower return than other available options, you might consider switching.
  2. Investment Goals: Changes in your investment strategy could prompt a need for a different core position.
  3. Risk Tolerance: Different investments are associated with varying levels of risk. Your ability to bear risks might influence your decision.
  4. Administrative Preferences: Perhaps the structure or reporting efficiency of another core position suits your needs better.

How to Change Your Core Position at Fidelity

Step-by-Step Guide

Changing your core position in Fidelity is a straightforward process once you understand your choices and the implications. Here’s how you can do it:

  1. Log In to Your Account: Start by logging into your Fidelity account through their website or app.

  2. Navigation:

    • On the dashboard, go to "Accounts & Trade".
    • Select "Account Features" to view options related to managing your account settings.

  3. Choose the Account: If you have multiple accounts, ensure you select the correct one where you want to change your core position.

  4. Core Position Options: Within "Account Features", look for "Core Position". Clicking on this should detail the current core option and other available options.

  5. Evaluate Alternatives: Compare the available alternatives in terms of returns, fees, and risk. Typically, options might include:

    • Fidelity money market funds (e.g., SPAXX, FDRXX)
    • FDIC-Insured deposits
    • Treasury-only money market funds

  6. Select and Confirm:

    • Select your new desired core position.
    • Follow any prompts to review and confirm your selection.
    • Be aware of the processing time for these changes to take effect.

  7. Confirmation: You'll receive an email or an alert confirming that your core position has been changed.

Table: Comparison of Core Position Options

Option Description Potential Returns Risks Liquidity
Fidelity Government Money Market Fund (SPAXX) Invests in short-term government securities Moderate Low High
Fidelity Treasury Fund Treasury bills and other U.S. government securities Moderate Very Low High
FDIC-Insured Bank Deposit Sweep Deposit sweep program with partner banks Low Minimal High

Important Considerations

  • Fees and Expenses: Review any associated fees for the chosen core position.
  • Impact on Portfolio: Consider potential impacts on your overall investment strategy, especially regarding asset allocation and diversification.
  • Cash Needs: Ensure the new core position adequately meets your cash needs (i.e., for trades or withdrawals).

FAQs About Fidelity Core Positions

How often can I change my core position?

You can change your core position quite easily, but frequent changes might not be advantageous or necessary unless prompted by significant economic shifts or changes in your financial strategy.

Are there any fees associated with changing my core position?

Typically, these transactions themselves do not incur a fee. However, the fees associated with individual investment options in your account portfolio should be reviewed as those can affect net returns.

How does a change impact my dividends and interest?

A change in your core position will affect where dividends and interest payments are directed, so it’s crucial to review and ensure they align with your financial goals.

What if there’s confusion or I need assistance?

Fidelity provides a helpline and online chat options for any questions. Their customer support can guide you through the process if additional help is needed.

Conclusion and Further Resources

Changing your Fidelity Cash Plus core position can optimize returns and provide better alignment with your financial strategy. Careful evaluation of options and thoughtful management can complement your overall investment plan. For more insights on managing investments, diversifying portfolios, and optimizing returns, explore Fidelity's resource center or consult with a financial advisor. Always ensure your decisions align with your broader financial goals and risk tolerance.