What the Cash Plus Core Position is and why you might change it
The Cash Plus Core Position in Fidelity accounts is the default place where uninvested cash sits — money that hasn't been put into stocks, bonds, or other securities. By default, Fidelity puts this cash into the Fidelity Government Money Market Fund (SPAXX), which is a very stable, low-risk holding that earns a small amount of interest.
You might want to change this if you're looking for a different interest rate, a different type of money market fund, or a specific cash management option that better matches your financial goals. Some investors prefer higher-yield options, while others want to keep cash in a specific fund for strategic reasons.
The process differs slightly depending on whether you have a brokerage account, an IRA, or a 401(k), but the basic steps are similar across all account types.
Key Takeaways
- Your Cash Plus Core Position is the default holding for uninvested cash in your Fidelity account, and you can change it through account settings.
- The change applies only to new cash that settles in your account going forward, not to cash already held in the current core position.
- Common alternatives include other money market funds, sweep options, or Fidelity's cash management products, each with different interest rates and features.
- You make the change in the Account Settings or Brokerage Settings section of your Fidelity account, under the Cash Management or Core Position tab.
- Changes typically take effect within one to two business days, though the exact timing depends on your account type and Fidelity's processing schedule.
How to change the core position on a Fidelity brokerage account
Log into your Fidelity account online or through the mobile app. From the Account menu, select Account Settings, then look for Brokerage & Trading or Cash Management depending on your account layout.
Find the section labeled Core Position or Cash Management. Click the link to edit or change your core position. Fidelity will show you a list of available options — typically including different money market funds, sweep options, or cash management vehicles. Select the one you want, review the details (including current interest rates and fund objectives), and confirm your choice.
Once you confirm, the change is saved immediately, but it only affects cash that settles after the change takes effect. Any cash already sitting in your old core position stays there until you manually move it or it's used for a purchase.
Changing the core position in an IRA or retirement account
The process is nearly identical for IRAs and other retirement accounts, but the menu path may be slightly different. Log in, go to Account Settings, then select the specific retirement account you want to modify from the dropdown menu if you have multiple accounts.
Navigate to Cash Management or Core Position settings. The available options in a retirement account may be more limited than in a taxable brokerage account — some money market funds or sweep options are not available inside IRAs due to tax or regulatory rules. Review what's available, select your new core position, and confirm.
Keep in mind that changing the core position in a retirement account does not trigger any tax consequences, since you're simply moving cash from one place to another within the same account type.
Understanding the available core position options
Fidelity typically offers several choices for your core position. The Fidelity Government Money Market Fund (SPAXX) is the default and invests in short-term U.S. Treasury securities and other government obligations. The Fidelity Treasury Money Market Fund (SPAXX) is similar but focuses exclusively on Treasury instruments.
Other options may include Fidelity Cash Management products, which sweep your cash into interest-bearing accounts at partner banks, often offering higher rates than money market funds. Some accounts also offer access to sweep programs that automatically move cash into various money market funds or bank deposit accounts based on your preferences.
Interest rates on these options change frequently and vary based on current market conditions. Before you change your core position, check the current yield on each option — Fidelity displays this information on the core position selection page. A higher yield sounds attractive, but also review the fund's expense ratio and objectives to make sure it matches your goals.
What happens to cash already in your old core position
When you change your core position, the change does not automatically move existing cash out of the old fund. Cash that's already sitting in your previous core position stays there until you take action. You have two choices: leave it where it is (it will continue to earn whatever that fund pays), or manually transfer it to your new core position.
To manually move existing cash, go to your holdings, find the old core position fund, and sell your shares. The proceeds will settle as cash, and depending on your settings, that new cash may go into your new core position. Alternatively, you can use Fidelity's "Exchange" feature to swap shares of one fund directly for another without triggering a sale.
This matters most if the interest rate difference between your old and new core position is significant. Moving a large cash balance from a low-yield fund to a higher-yield one can make a real difference over time, but the decision is yours to make.
Timing and when the change takes effect
Changes to your core position typically take effect within one to two business days. During that window, any new cash that settles in your account will go into your new core position. Cash that settles before the change is processed will go into your old core position.
If you're waiting for a deposit, dividend, or sale to settle and you want it to land in a specific core position, check the settlement date and plan your timing accordingly. Settlement dates are usually one to two business days after a transaction, so you may have a small window to make your change if you want to catch a specific deposit.
If you change your mind after making the change, you can switch back to your original core position or pick a different one at any time. There are no penalties or restrictions on how often you change it.
Why your core position matters for your overall strategy
Your core position is where "dead money" sits — cash that's not yet deployed into investments. If you're a long-term investor who rarely holds cash, the difference between a 0.01% yield and a 4% yield might not matter much. But if you keep a significant emergency fund or cash reserve in your Fidelity account, or if you're building up cash to make a large purchase, the choice of core position can add up.
Some investors also use core position changes as part of a tactical strategy. For example, if you think the market is about to drop and you want to hold more cash temporarily, switching to a higher-yield core position makes sense. If you're confident in the market and expect to deploy cash quickly, the core position matters less.
Review your core position choice once or twice a year, especially if interest rates have changed significantly. Fidelity's rates update regularly, and what made sense a year ago might not be optimal today.
Frequently Asked Questions
Can I have different core positions in different Fidelity accounts?
Yes. Each account — whether it's a brokerage account, IRA, or 401(k) — has its own core position setting. You can set one core position for your taxable account and a different one for your IRA if you want. This gives you flexibility to tailor each account to your specific needs.
What if I want to move my cash to a specific mutual fund instead of a money market fund?
The core position setting is limited to money market funds and cash management products. If you want to hold a specific mutual fund, you'll need to manually buy shares of that fund rather than relying on the automatic core position. Any cash left over after that purchase will still go into your core position.
Does changing my core position affect my tax situation?
No, changing the core position itself does not create any tax event. However, if you manually move existing cash from one fund to another by selling shares, that could trigger a taxable gain or loss in a taxable account. In a retirement account like an IRA, moving cash between funds has no tax impact.
What if I don't want any core position at all?
You cannot eliminate the core position entirely — Fidelity requires all accounts to have a default place for cash to settle. However, you can choose a core position with a very low balance requirement or one that suits your needs, and then manually move most cash into investments as it arrives.
How often should I review my core position choice?
Review it at least once a year, or whenever interest rates change significantly. Fidelity publishes current yields on its website, so you can compare your current core position to other available options in a few minutes. If a better option has emerged, making the switch takes just a few clicks.