I just selected FZDXX as the sweep in my HSA a few days ago.
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If I have a Fidelity Cash Management Account along w/ other Fidelity accounts (e.g., a brokerage account, retirement accounts, HSA, etc) and turn off the Cash Management Account’s overdraft protection, can a fraudster that gains access to the Cash Management Account (e.g., steals the debit card, takes over my PayPal/Venmo accounts that are linked to the Cash Management Account, knows the ACH routing & account numbers etc) still drain my other Fidelity Accounts? Or will the fraudster be isolated to only the Cash Management Account?
Per this Bogleheads forum post it looks like I’ll be protected and any fraud will be “isolated” to just the Cash Management Account. I would like to get confirmation from others since maybe the poster is/was wrong, there are new attack vectors since 2019, etc.
PS - I’m using the terms “fraudster”/“fraud” loosely here. I’d want protection even in more innocent situations like a utility company withdrawing a large amount due to a billing error.
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To answer my own question: I talked to Fidelity and they confirmed that w/ Cash Management Account’s overdraft protection turned off, that a fraudster that gains access to the Cash Management Account will be limited to only what’s in the Cash Management Account.
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This deal disappeared for a bit, was replaced w/ a $150 bonus for the holidays, disappeared again, and now is back (for $100 bonus) at: The Fidelity Starter Pack℠ | Get an investing account, spending account, & education
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A couple of updates here.
I initiated an ACH pull for the first time in a while yesterday, and I was pleasantly surprised to see the full amount credited and available same as cash this morning. This was from Alliant with the intention of establishing a position in FZDXX. It was a $100k transfer, so not small potatoes, either. The debit appeared in my Alliant ledger yesterday, a few hours after submitting the transfer, so it appears that they have some kind of same-day ACH going on.
I also forgot to confirm earlier - there was no international ATM fee applied when I was traveling late last year. The exchange rate appeared to be as good as I was getting on Visa-branded credit cards for transactions on the same day.
All in all, I am very happy with this account for day-to-day spending as well as an easy way to manage investments, buy T-Bills, etc.
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I also have an account and I’m pleased with it. Not mentioned on this thread are the local offices that are convenient for depositing checks and other paper transactions.
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I’ve been using Discover MMA for Bill Pay (because APY 
, and 6 transactions limit hasn’t been enforced since Reg E was loosened) and for automated ACH (to satisfy DD requirements at other banks). Discover stopped accepting applications for MMA a couple months ago and for all other deposit accounts yesterday. I’m guessing they’ll be moving to CapOne soon, and since CapOne doesn’t have MMA, they’ll probably convert it to Checking. Long story short, I no longer have an excuse to not use Fidelity as a hub. Other brokerages can’t compete with Fidelity’s money transfer lockdown mode, which is perfect for this account, since it doesn’t block Bill Pay and scheduled or incoming ACH.
I decided against the “Cash Management Account” in favor of a brokerage account (“The Fidelity Account”?), because the cash management features are sufficient for my needs. CMA has FDIC and “Cash Manager” (meh?), but brokerage sweep interest rate is higher. I’m going with a compartmentalization idea described here and mentioned upthread, but slightly modified – this account will only be used for electronic payees and trusted ACH transfers.
Potential problems encountered:
- I’m aware of the issue with ACH pulls, but it’ll probably be OK because the affected amounts will not be needed for any other purpose, and the monthly outgoing and incoming transfers are one week apart, so the incoming transfer has 3+ weeks to settle.
- Citi cards were recognized in search and say they’ll be paid electronically, but there’s a little note which says they might be paid by check and to give it 10 business days. Will this go away after first payment?
- One of my billers was found in search, but will not be paid electronically, even though Discover pays it electronically. I haven’t decided what to do about this yet. I might open a second brokerage account for bills paid by mail. I’m hoping it sends the first payment by mail and then upgrades to electronic.
- U.S. Bank cannot be found in search, but it’s electronic after being added manually. I have not tried adding a U.S. Bank business credit card, because I had problems paying one from Discover – the payment went through the first time, but was rejected every time after that, even after I re-added the payee. Does anyone else have problems (or successes) paying USB Biz CC using online bill pay?
Any other ideas, suggestions, warnings, etc would be appreciated.
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I’ve been running this setup for many years. I have both a brokerage account and a CMA.
Both can be set up so the default account is a “sweep” account rather than the FIDC insured account, so I wouldn’t necessarily choose the brokerage account for that reason. I have both because the CMA offers unlimited ATM fee reimbursements and I do make use of that when traveling internationally.
Cash manager is useless, I agree.
Auto-liquidation works great. I keep nothing in the FDIC cash position, and Fidelity auto-liquidates a money market fund (FZDXX in my case) when I need to pay bills, buy index funds, or make an ATM withdrawal.
ACH pulls have not been an issue for me, but my account is several years old and have > $1M in taxable assets with Fidelity. I assume this is the reason why I don’t have any issues, and would expect long-ish delays until your account becomes more seasoned.
As far as bill pay - I can’t help out with the USB data point. Unfortunately, my experience with mail payments is that unlike Alliant’s old system, they do not get upgraded to electronic after a snail mail payment or two. They stay as snail mail. I actually have the opposite problem - my current mortgage servicer is in their electronic system, but upon submitting the payment, it switches to a check. This bit me in the butt the month after my mortgage servicing transferred and I ended up having to make a payment from Alliant, which was successfully made electronically.
Going forward I am on the Bilt train for my mortgage (did you see the fun I had scraping their HTML and Javascript the past couple of weeks on Reddit?) so I don’t care about the specific limitations around my mortgage servicer anymore.
Also of note, they issue a check for any payment greater than or equal to $10,000.
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I think I just found the answer to my own question. Apparently Citi tried to make Fiserv pay for submitting electronic payments, and Fiserv is retaliating by sending it via snail mail: https://www.bogleheads.org/forum/viewtopic.php?p=8443535#p8443535
Good to know. My other accounts are very old, not sure if that’ll make a difference.
Good to know. Rare for me, but I guess I could just split those 
.
Haha, that’s weird. Never seen anything like this with Discover. Maybe it’s the same situation as Citi, someone is trying to exact a toll
Indeed I did . I can’t figure out why people on reddit are so upset about the changes (other than the end of the free gravy train). It’s still 2.33x on everything with Blue and 3.33x with Palladium. With points worth at least 1.6x, it can’t be beat. For me it’s probably only worth a few $hundred/year and I’m not too excited about Cardless, so I don’t plan to switch yet.
Maybe, I dunno. That link is interesting, thanks for posting it. My mortgage got tossed around a few times and is now with some place called Cornerstone Servicing. They are a little janky so I just chalked it up to some incorrect configuration in Fiserv for their account information.
I tend to agree with you. I applied for the palladium and got a $35k limit so I am happy. Bilt Cash though, that’s my main issue with the release. They advertised it as dollar-for-dollar in their network but after Kerr’s comments, I think we’re looking at something like, spend $20 Bilt Cash for $20 off a hotel portal booking or Lyft ride. They teased it as “same as cash” and it’s really “buy a coupon worth $X for X Bilt Cash”. And we don’t even know if that’s the case since they haven’t publicly released anything. A 2x catch-all was a hole in my card lineup and as a Hyatt guy with high non-category spend living in the PNW (Alaska territory), it made sense for me. I don’t really chase the SUBs anymore.
Their response to the customer reaction, including Kerr’s meme… I don’t think I’ve seen anything like it in the credit card game. Hilarious to watch the fallout and the reaction to all of it.
It reminds me, I should make a post in the CC thread with the details of this convoluted system.
That’s my main reason for using the CMA instead of just the brokerage account.
I haven’t had any issues with ACH either. FWIW, I also have had substantial assets at Fidelity for many years, and have a dedicated rep at a nearby Fidelity branch so maybe that impacts the level of service IDK.
About USB, my monthly USB Smart card balance (not biz card though) gets paid from Fidelity CMA account without fail either. I don’t really pay many bills. Some utility bills but no mortgage. No issues with those ever.
Only slight annoyance is linking Fidelity CMA to other banks which is sometimes less automated than for linking other banks. It frequently requires small deposits method. But that’s only a delay of a couple of days once to setup. So not a deal breaker for me considering how often I need to link new accounts.
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As far as ATM reimbursements, I plan to open a separate CMA just for that. I’ve settled on a compartmentalized setup:
- “BillPay” for electronic bill pay and recurring ACH transfers, with Money Transfer Lockdown (MTL) on.
- “ACH hub” for all manual incoming or outgoing ACH. MTL=off since I won’t let money sit there.
- “Checking” for ATM card (locked when not using), mailed bill pay, and paper checks maybe. MTL probably off due to low or $0 balance.
- “Savings” for
. MTL=on.
Probably an overkill, I just don’t like the idea of all my money sitting in one account with dozens of different hands reaching into it.
I actually prefer it this way. Can’t stand Plaid. It’s easier to delete these “old style” links too – Plaid technically keeps an access token to your account until you ask your bank to remove it, and the pages for removing are buried deep in the menus, if they exist at all.
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That’s basically why I don’t mind having CMA and brokerage accounts separate even though they function almost identically. CMA has relatively low cashflow balance and is linked to a bunch of accounts and bills get paid from it. It’s my checking account with free worldwide ATM debit card, that also happens to have a sweep to decent MMF. Brokerage is not linked to anything and has money transfer lock on just in case.
Why not delete them from the Plaid portal? That’s what I usually do now. Simpler than dealing with my bank for deleting these tokens as long as you use the same phone number with Plaid.
LLLOOOLL. Until you mentioned it, I didn’t think I could use a Plaid account for that. So far I’ve only done any required linking as a guest.
So you have only one CMA for bills, checks, ACH transfers, and ATM/debit? I would hate it if the debit card compromise drained this account and prevented bills, checks, or outgoing ACH transfers.
Question. When Fidelity sends a bill pay by check, does it remove the funds from my account immediately, or does it wait until the check is cashed? Discover doesn’t take the money until the check is cashed.
It takes it out when the check is cashed. It will show as “Outstanding” in the bill payer once the check has been sent. Interestingly the check has a partial account number on there - a short prefix followed by the last 10-ish numbers if your account number. No idea if anything could be done with that number (like an ACH pull) outside an authorized bill payment.
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Awesome, thank you.
For my setup I decided to combine “ACH hub” and “Checking” into one. Four accounts is unnecessarily complicated and the risks I was trying to isolate are near zero anyway.
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I’m not sure they’ll let you have more than one CMA.
In case of compromised debit card (say via a rigged ATM), it still has a daily limit on the card and regular email and SMS transaction alerts on the account. I don’t have that many transactions on this account actually. I almost never use checks or their bill pay service (no need). All my expenses are on credit cards so my transactions are almost all ACH debits from linked banks and utility companies. I think I’d notice right away before too much money is gone. But worst case, I’d transfer instantly from Brokerage account (from my emergency cash position) until Fidelity credits me back the fraudulent transactions. They have the same fraud protection as you’d expect with your regular bank as far as I’ve read. You can lock card from the fidelity app also once you notice. Basically same as any bank.
Got it.
They do, you can open more than one CMA.
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So I guess it could be valuable to have one CMA dedicated for your ATM/Debit card purchases and rest of your ACHs, bill pays and checks drawn from your other CMA. Especially easy to setup as a couple.