Pay Attention to Your Cash

Is Your Cash Working for You?

Watercolor of Port Aransas, Texas by Cass Grange

May 2025

Hello Megan,

You probably review your investment statements regularly—but are you giving the same level of attention to your cash?

Brokerage account cash options

In today’s shifting interest rate environment, where you park your cash matters more than ever. Many brokerage account default sweep (core) positions offer disappointing yields. For instance, Schwab’s core money fund yields just 0.05%. To earn more, investors often need to take action—manually moving cash into higher-yielding money market funds.

Fidelity recently updated the default core position in non-retirement accounts to FCASH, which currently yields around 2.1%. However, Fidelity money market funds have significantly higher yields—approximately 4.1% at present. If you’re holding a substantial cash balance, we evaluate cash options that may offer higher yields.

Certificates of deposit

Certificates of deposit (CDs) also require close attention. That great rate you locked in last year? It may have dropped significantly upon renewal—often without clear notice from the bank. One client was surprised to find her 4.5% CD had auto-renewed at just 0.05%. Monitoring CD maturities and rates—and contacting your bank before the renewal deadline—is critical.

Brokerage money market fund vs. bank money market account

It’s also important to distinguish between a Fidelity money market fund and a bank money market account. Fidelity’s funds typically offer competitive yields, but they are not FDIC insured. In contrast, bank money market accounts are insured up to $250,000 per depositor, but they often offer lower returns.

FDIC insurance limits

Additionally, some clients unknowingly exceed FDIC insurance limits in a single bank or across multiple banks. We can help you review your cash holdings, optimize yields, and ensure proper diversification to stay within coverage limits.

Short-term safety vs. purchasing power

Cash may feel safe, but low returns can quietly erode its purchasing power over time. We can help align your cash strategy with your financial goals. To explore your options, simply reply to this email to schedule a meeting with your advisor. Not a client? We are happy to talk to you about this or any other questions you have.

Teens Learn how Financial Abuse is Linked to Domestic Abuse at Texas Advocacy Project's TAP

Bleckley and Sharon Dobbs recently represented Watercolor Financial as a sponsor of Texas Advocacy Project's (TAP) Teen Ambassadors of Hope program.

To help prevent dating violence, TAP's Teen Ambassadors program has trained over 600 teens on healthy relationships, teen dating violence, positive social media presence, and leadership skills. You can learn more here.

Over one in three women will experience domestic abuse, and financial abuse occurs in a shocking 99% of those cases. Texas Advocacy Project is a non-profit law firm that provides free legal service, along with supportive social services, to victims of dating and domestic violence, child abuse, stalking and human trafficking across Texas.

Watercolor champions the importance of building financial independence and is proud to partner with TAP to ensure safety, economic stability, and justice.

Tax Planning - Please send us your 2024 tax returns

The Watercolor Financial team made an investment in technology and training over the past three years so we can help you recognize tax planning opportunities. Our firm offers annual tax planning as part of our comprehensive financial planning service. Roth conversions, charitable giving and retirement plan contributions are just some of the opportunities that are easy to overlook.

Once you file your taxes, please securely upload your tax return in PDF format here

Access your reports - Visit our web page for links to Fidelity (for access to statements and tax documents) and to the Orion portal (for access to performance reports and billing statements): Watercolor Financial website.

Q2 2025: Quarterly Market Guide

Please review this quarter's market guide by clicking here. We encourage all of our clients to review the straight-forward, easy-to understand guide written by Rafael Villagran, CIO of Genesia Investments and part of our investment team at Watercolor Financial.

ADV P2 Firm Brochure | Form CRS

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