Class I shares of the institutional MMFs FIGXX, FISXX (similar to FZFXX), and FSIXX (similar to FDLXX) can be opened at Merrill Edge with a $1 min. Shares can then be transferred in kind to Fidelity. This lets you get around the $1M min Fidelity would require if you opened a position there. Once opened, you can add any amount to these funds.
https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/ICCRateSheet.pdfDifferences between owning these funds at Merrill and at Fidelity:
- Purchases and div reinvestments at Merrill must be in whole dollar amounts (remaining pennies of divs at Merrill go into your core account)
- Intra-day purchases are possible at Merrill (earn divs starting day of purchase) if bought before 11:45 (FSIXX) or 1:45 (others)
Is it worth the one-time set of hoops to cut the ER in half (0.42% to 0.21%)? That may depend on whether you already have an account at Merrill. If not, you'll have to open one for this purpose.
Comments
I am currently using FZDXX in my Fidelity IRA. Seems like I can pick up 4-5 basis points
by buying FIGXX at Merrill and transferring to Fidelity. Can I do better?
These guys have become worse than a Govt office.
I did not ask for margin.
Merrill is good for a very narrow set of reasons, incl the MM. That is why I only have long term holdings there. I saw there was small uninvested cash and thought I would buy the ETF. Otherwise, I would not bother with them.
I was opening the CMA to buy Fidelity MM to transfer to Fidelity.
Rightly or wrongly.
(This from a BoA IT SVP.)
Fidelity told me they were fine with the transfer in, they were fine with my purchasing additional shares, that it was Merrill undoing the original ACAT transfer.
Merrill confirmed a rule of thumb on in-kind transfers: if a receiving institution (here, Fidelity) accepts shares being transferred, then a transfer will go through. However, upon checking the rep said Merrill does not allow the transferring of MMF shares into or out of Merrill.
The rep is having Merrill check into whether this is just policy or some legal/contractual constraint. The bottom line is that I was lucky that Merrill let the shares transfer out initially. So I am set but this maneuver may not work for others.
It also leaves me wondering: if this is a Merrill (or legal) rule, then why wasn't the initial transfer stopped automatically? And why did it take Merrill two weeks to discover the supposed transgression?
Very good questions!
Wait, I have less than 1% in MM and I only concentrate on how to make money, which will make me a lot more than the difference between these funds.
P.S.: probably a temporary glitch but I was not able to place a MM order in my Merrill account yesterday or today. After three tries, I called the CS rep who then had to connect me to a trading specialist who was able to place the buy order. If fact, I first did the online chat who told me they can not place the trade for me and that I need to call CS.
At other brokerages I have I can call and be connected to the trader without having to go through a generic Rep first.
I shall let you know what happens next time at Fidelity.
May be ask to convert your account to an ATP account (you can continue to use the web account.)
Merrill website says it is a same day settlement (fund). Today (Saturday), I placed a trade to sell $10,000 of the fund and tried to place a buy order something else. My buy order was rejected (not allowed to submit) saying I do not have enough money to place the buy order, which I took it to mean that I have to wait for the sell MM order to settle and cash becomes available before I can place the buy order.
Is the above your experience as well (i.e., you have to wait for MM fund sell order to settle before being able to place a buy order at Merrill)?
(The fund is however Cash Equivalent for Cash Covered Puts, FWIW.)
(A Merrill Rep on Friday said I could buy anything that settles on Monday and then liquidate FIGXX (same day settlement) on Monday to satisfy the buy order. Upon my request, he confirmed his guidance with the team that exclusively deals with Money Market funds (evidently, we are not allowed to speak with this internal team.))
Evidently, Merrill website recognizes FIGXX as cash equivalents only during regular trading hours and not during the weekends - per their Rep. I was able to place a buy order today without liquidating FIGXX first.