Fidelity money market rates

Compared to the 3.05% APY (3.01% simple interest rate) that you can get from DollarSavingsDirect, Fidelity offers the following 7-day yields:

• Fidelity Municipal Money Market (FTEXX): 0.24% federal tax-free, equivalent to %0.33 at the 28% tax bracket
• Fidelity New York Municipal Money Market (FNYXX): 0.18% federal and New York tax-free, equivalent to %0.30 at the 28% tax bracket
• Fidelity California Municipal Money Market (FCFXX): 0.02% federal and New York tax-free, equivalent to %0.03 at the 28% tax bracket
• Fidelity Cash Reserves (FDRXX): 1.13%
• Fidelity Select Money Market (FSLXX): 1.17%
• Fidelity Money Market (SPRXX): 1.21%

According to Crane Data, the top retail money market fund yield is Touchstone Money Market at a 7-day yield of 1.67%. Touchstone also has the top institutional money market fund yield, but even that is only 2.23%.

Why are the money market fund yields so low relative to what a number of banks are offering? Basically because they do not have FDIC protection and are forced to be far more conservative than they were in the past.

Incidentally, EverBank has a money market account that earns 2.73% APY for the first year and offers a 3.51% APY new account "bonus" rate for the first three months. They are also offering 2.40% APY for a checking account over $50,000.

-- Jack Krupansky