What SPAXX Is and How It Works in Your Fidelity Account

SPAXX is Fidelity's money market fund, not a savings account

SPAXX (Fidelity Government Money Market Fund) is a mutual fund that holds short-term government debt and cash-like securities. It is not a bank savings account, and it does not earn interest the way a savings account does. Instead, it pays a dividend yield that changes daily based on what the fund holds and current market rates.

Fidelity uses SPAXX as the default "sweep" vehicle for cash in many brokerage accounts. That means when you deposit money or sell a stock, the cash automatically moves into SPAXX rather than sitting idle. You can also move money into SPAXX manually if you want to hold cash without buying individual securities.

The fund is considered very low-risk because it holds only government securities with short maturities — usually 90 days or less. However, "low-risk" does not mean "no risk" or "may provide return." The value of your shares can fluctuate slightly, and the dividend rate can drop to near zero if market conditions change.

Key Takeaways

SPAXX is a money market mutual fund that holds government debt, not a bank deposit account, so your money is not FDIC-insured.
The dividend rate changes daily and is not may provide; it has been as low as 0.01% and as high as 5% depending on Federal Reserve policy and market conditions.
Money in SPAXX is available to trade or withdraw immediately, with no lock-in period or penalty.
SPAXX is the automatic destination for cash in most Fidelity brokerage accounts, but you can move money out or into other funds at any time.

How the dividend rate works and what you actually earn

SPAXX pays a dividend yield, not interest. The yield is expressed as an annual percentage but is calculated and paid daily. If the fund's current yield is 4.5% per year, you earn roughly 0.012% per day on your balance (4.5% divided by 365 days). That amount is added to your account each day and automatically reinvested into more SPAXX shares.

The yield is not fixed. Fidelity publishes the current yield on the SPAXX fund page, and it changes based on what securities the fund manager buys and what those securities pay. When the Federal Reserve raises interest rates, money market yields typically rise. When rates fall, yields fall with them. During 2022 and 2023, SPAXX yields rose sharply as the Fed raised rates; in 2020 and 2021, yields were near zero.

You can see your current SPAXX balance and the yield it is earning in your Fidelity account dashboard. The actual dollars you earn appear as a dividend credit each day, usually in amounts under $1 for typical account balances.

Why SPAXX is not the same as a bank savings account

The most important difference is insurance. Money in a bank savings account is protected by the FDIC up to $250,000 per account holder per bank. Money in SPAXX is not. SPAXX is a mutual fund held in a brokerage account, and brokerage accounts are protected by SIPC (Securities Investor Protection Corporation), which covers up to $500,000 per account but works differently than FDIC insurance and does not cover market losses.

A second difference is that SPAXX shares can fluctuate in value, though the fluctuations are tiny. The fund is designed to maintain a $1 share price, but the actual value can move to $0.995 or $1.005 depending on market conditions. This is called "breaking the buck" when it falls below $1, which is extremely rare but has happened in market crises.

A third difference is that SPAXX is not a deposit. You own shares of a mutual fund. If Fidelity itself failed, your SPAXX shares would be protected as customer assets, but the protection works through liquidation and transfer, not through insurance.

When SPAXX is useful and when it is not

SPAXX works well as a temporary holding place for cash you plan to invest soon, or for money you want to keep liquid but earning something. Because the yield changes with market rates, it can be competitive with high-yield savings accounts when rates are high, but it lags when rates are low. In late 2023 and early 2024, SPAXX yields were around 5%, which matched or beat many savings accounts. In 2021, SPAXX yielded 0.01%, far below savings accounts.

SPAXX is not useful if you need FDIC insurance or if you want a may provide rate. It is also not useful if you are trying to avoid market risk entirely — the share price can move, even if slightly. For money you absolutely cannot afford to lose and need to stay stable, a bank savings account or money market account is safer.

Many people leave SPAXX alone and never think about it. If you are a long-term investor who deposits money and buys stocks or funds, SPAXX is just the waiting room for your cash. But if you are holding a large sum and want to understand what it is earning, checking the SPAXX yield and comparing it to savings account rates makes sense.

How to move money in and out of SPAXX

You can move money into SPAXX by transferring cash from your bank, or by selling stocks or funds and letting the proceeds land there automatically. You can move money out by buying a security, transferring to your bank account, or moving to another fund within Fidelity. All of these transactions settle immediately or within one business day.

If you want to stop using SPAXX as your default cash location, you can change your account settings in Fidelity to direct new cash to a different money market fund or to a Fidelity cash management account. However, money already in SPAXX stays there until you move it.

SPAXX fees and expenses

SPAXX has an expense ratio of 0.42% per year, which means Fidelity deducts that percentage from the fund's returns to cover management costs. This is higher than some competing money market funds, but it is built into the yield you see quoted — the 4.5% or 5% figure already accounts for the fee.

There are no transaction fees to buy or sell SPAXX shares, and no minimum balance. You can hold any amount from $1 to millions.

Frequently Asked Questions

Is my money in SPAXX safe?

SPAXX holds very safe securities — U.S. government debt — but it is not FDIC-insured. Your shares are protected by SIPC if Fidelity fails, but not against market losses. The fund is designed to be stable, but the share price can move slightly. For absolute safety and insurance, a bank savings account is better.

Can I lose money in SPAXX?

Unlikely, but technically possible. The share price can fall below $1 if interest rates rise sharply or if the securities in the fund decline in value. This is rare. More commonly, you "lose" money by earning a very low yield when rates are low — you do not lose principal, but you earn less than inflation.

Why is SPAXX the default for my cash?

Fidelity uses SPAXX as the automatic destination for uninvested cash because it is a money market fund that earns a yield. This keeps your cash working instead of sitting idle. You can change this setting in your account preferences if you prefer a different fund or cash account.

How often does the SPAXX yield change?

The yield changes daily based on the securities the fund holds and their current rates. You can see the current yield on Fidelity's website. The yield you see is the most recent seven-day average, not a may provide of future returns.

Should I move my money out of SPAXX into a savings account?

Compare the current SPAXX yield to your bank's savings account rate. When SPAXX yields are high (4% or above), it is often competitive. When yields are low, a high-yield savings account may pay more. Also consider whether you need FDIC insurance — if you do, a savings account is the right choice regardless of rate.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.