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This Money Market Fund is Paying 47 Times More than its Competition

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By tristan tan @ Shutterstock.com

Fidelity investments may be sparking a war among money market funds by offering a 1.91% yield on money in new brokerage and retirement accounts. That’s 47 times higher than Fidelity competitor, TD Ameritrade, 10 times higher than Charles Schwab and 27 times higher the E*Trade. Vicky Ge Huang reports on Fidelity’s move at AdvisorHub, writing:

“I am not surprised to hear that Fidelity is offering better interest rates,” said Greg O’Gara, senior wealth management analyst at Aite Group. “They continue to try to reach out to their client base and prospects by offering superior product alternatives in a down market environment.”

Schwab, which offers sweep yields of 0.18% to 0.61%, did not comment on whether the firm will seek to raise its rate, but spokesman Mike Peterson said the company does not recommend clients keep cash in sweep vehicles for long periods.

“Purchased money market funds will generally pay higher interest yields than any sweep vehicle,” he wrote in an email.

Peter Crane, whose Crane Data tracks money-market fund returns, said the cash sweep yield Fidelity is offering is within spitting distance of the average 2.12% in his firm’s index of 100 retail money-market funds.

“It’s a shocker,” he said.

I encourage readers to consolidate their assets at Fidelity. Low fees, strong investments in technology and this new money market account show that Fidelity is competing hard to keep customers happy. Read more about why Fidelity is #1 here.

 

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com