Fidelity mySmart Cash Account

As the Federal Reserve cut interest rates to the bone, banks reduced benefits, mainly interest rates they offer account holders, too, sometimes at an even faster pace. One of the examples is the Fidelity mySmart Cash Account.

A little over a year ago when Fidelity launched its mySmart Cash Account, the offering was very attractive: Unlimited ATM fee reimbursements, unlimited check-writing, and a hard-to-beat 6.30% yield. When I first heard of the account, it was praised as the bast checking account.

Not so now.

I recently went back to Fidelity’s website to check out what the mySmart Cash Account is currently offering and I have to say that I am a little disappointed, especially with the yield: a miserable 0.20% APY, though other benefits of account seems to remain intact:

• No initial deposit required to open an account
• No minimum monthly balance required
• No monthly account maintenance fee
• Automatic ATM fee reimbursement
• Free online Fidelity BillPay
• Free unlimited checkwriting

Without any doubt, the offering is still quite appealing. If you frequent traveler who use a lot of out-of-network ATMs, then the myCash Account could be a big plus because it has no limit on ATM fee reimbursements. You can get cash from any ATM machine with Visa, PLUS, or STAR logo on it and Fidelity will reimburse the ATM fee charged by the ATM owner. Though many banks also credit ATM fees charged by other banks, there’s often a monthly limit on how much you can get back.

With all these benefits, you have to be aware that mySmart Cash Account isn’t a checking account, like those you get from banks. Instead, it is a really a brokerage account that’s designed to make managing your cash easier, though it works as a checking account. If you have a brokerage account with Fidelity, then you can easily transfer money between mySmart Cash Account and your Fidelity brokerage account for security trading.

Another thing you need to keep in your mind is that Fidelity doesn’t provide FDIC insurance coverage (nowadays, this is the first thing you should check when considering a bank account). However, your money in the myCash Account is protected. The way it works is that cash balance in the account will be swept to a interest-bearing account at a third party bank (currently only SunTrust Bank and Fifth Third Bank are eligible to receive cash from Fidelity) and from there you will get FDIC insurance for your money.

Are you interested in mySmart Cash Account?

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