Fidelity does not currently offer a standalone high-yield savings account

Fidelity, the investment and brokerage firm, does not have its own HYSA product. If you hold a Fidelity brokerage account or retirement account, you cannot move money into a Fidelity-branded high-yield savings account the way you could with banks like Marcus, Ally, or American Express Personal Savings.

However, Fidelity does offer cash management tools within its existing accounts that function similarly to savings accounts. These tools hold your uninvested cash and pay interest, though the rates and features differ from standalone HYSAs offered by banks and online-only financial institutions.

The distinction matters because Fidelity's cash options are designed to work alongside investing, not as standalone savings products. If you want a dedicated high-yield savings account separate from any brokerage or investment account, you would need to open one with a different institution.

Key Takeaways

  • Fidelity does not offer a standalone HYSA under its own brand or through a partner bank.
  • Fidelity's cash management features within brokerage accounts pay interest on uninvested cash, but rates and terms are set by Fidelity and may differ from dedicated HYSA products.
  • If you need a dedicated high-yield savings account separate from investing, you would open one with a bank or online financial institution, not through Fidelity.
  • Fidelity's cash options are most useful if you already hold a brokerage or retirement account and want to earn interest on money you are not currently investing.

How Fidelity's cash management works instead

When you open a Fidelity brokerage account, any cash you deposit but do not invest sits in a default cash sweep option. Fidelity automatically moves this uninvested cash into a money market fund or bank sweep program that pays interest. The specific option depends on your account type and Fidelity's current offerings.

Fidelity offers several cash sweep choices, including the Fidelity Government Money Market Fund and sweep arrangements with partner banks. You can choose which option you prefer, and the interest rate varies by product. These rates are not always as high as rates offered by standalone HYSAs, and they change based on Fidelity's decisions and market conditions.

The key difference from a standalone HYSA is that this cash is held within your Fidelity brokerage account. You are not opening a separate savings account; you are choosing where your uninvested cash sits while you hold your Fidelity account. If you close your Fidelity account, the cash moves with it.

Interest rates on Fidelity cash options

Fidelity does not publish a single "HYSA rate" because it offers multiple cash sweep options, each with its own rate. Money market funds offered through Fidelity pay a yield that changes daily based on the underlying fund's holdings and market conditions. Bank sweep programs pay rates set by the partner banks, which also change over time.

To find the current rates on Fidelity's cash options, you would log into your Fidelity account or contact Fidelity directly. Rates are not fixed and will shift as interest rates in the broader economy move. Comparing Fidelity's rates to standalone HYSAs requires checking both at the same time, since both change frequently.

If earning the highest possible interest rate on savings is your primary goal, you may want to compare Fidelity's current cash sweep rates against rates offered by dedicated HYSA providers before deciding where to hold your money.

FDIC protection and safety of cash at Fidelity

Cash held in Fidelity's money market funds is not FDIC-insured because money market funds are securities, not bank deposits. However, money market funds are considered low-risk investments and are regulated by the Securities and Exchange Commission.

Fidelity's bank sweep programs, where cash is moved to partner banks, typically offer FDIC insurance up to the standard limit of $250,000 per depositor per bank. If you have cash in multiple sweep banks through Fidelity, each bank account is insured separately up to $250,000. Fidelity's website shows which banks participate in its sweep program and how much FDIC coverage applies.

Standalone HYSAs at banks are also FDIC-insured up to $250,000. The protection level is the same whether you use Fidelity's bank sweep or open a separate HYSA elsewhere, but the structure is different.

When Fidelity's cash options make sense

Fidelity's cash management features are most useful if you already have a Fidelity brokerage account and regularly hold uninvested cash. For example, if you contribute to a taxable brokerage account but do not invest the money when ready, or if you sell investments and wait before buying again, Fidelity's cash sweep ensures that money earns interest rather than sitting idle.

Fidelity's cash options are less useful if you want a dedicated savings account separate from any brokerage or investment account. If your goal is to keep savings completely separate from investing, or if you do not plan to open a Fidelity brokerage account, a standalone HYSA from a bank or online financial institution would be a better fit.

Some people use both: a standalone HYSA at a bank for emergency savings or short-term goals, and Fidelity's cash sweep for money held within their brokerage account. The choice depends on your situation and how you organize your accounts.

Alternatives to Fidelity for a dedicated HYSA

If you want a standalone high-yield savings account, you would open one with a bank or online financial institution. Common options include Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, Discover Bank, and many others. These institutions offer HYSAs as their primary product, not as a feature within a larger brokerage account.

Standalone HYSAs typically offer higher interest rates than Fidelity's cash sweep options, though rates vary by institution and change frequently. They are FDIC-insured and designed specifically for saving money, not for holding cash between investment transactions.

You can hold both a standalone HYSA and a Fidelity brokerage account at the same time. Many people do this to keep their savings and investing separate while still earning interest on both.

Frequently Asked Questions

Can I transfer money from a Fidelity HYSA to my brokerage account?

Fidelity does not offer a standalone HYSA, so there is no separate account to transfer from. If you hold cash in a Fidelity brokerage account's cash sweep, you can move that cash into investments within the same account whenever you choose.

Does Fidelity pay interest on money market accounts?

Fidelity's money market funds pay a yield, and Fidelity's bank sweep programs pay interest through partner banks. Both pay interest on uninvested cash held within a Fidelity brokerage account. The rate depends on which cash option you choose and changes over time.

Is Fidelity's cash sweep FDIC insured?

Fidelity's money market funds are not FDIC-insured because they are securities. Fidelity's bank sweep programs are FDIC-insured up to $250,000 per depositor per bank. Check Fidelity's website to see which banks are included in the sweep program and how much coverage applies to your cash.

What is the difference between Fidelity's cash sweep and a standalone HYSA?

A standalone HYSA is a separate bank account designed for saving. Fidelity's cash sweep is a feature within a brokerage account that holds uninvested cash. Standalone HYSAs often offer higher rates and are easier to access if you do not want to open a brokerage account.