Cash management is no longer simple. With interest rates above 5%, where you park your money matters again. Yet many Fidelity users still keep their funds in SPAXX or FDRXX because it feels safe. The truth? It’s safe but inefficient. The fdrxx vs spaxx matchup is a distraction from better alternatives like SGOV and Treasury Bills.
Safety vs Return
All four options are government-backed, so risk is virtually zero. The difference comes from fees and structure. SGOV’s ultra-low expense ratio lets you earn close to the actual Treasury yield, while SPAXX and FDRXX skim off a portion through fund costs.
Comparing Yields
Right now, SGOV and 3-month T-Bills pay more than SPAXX or FDRXX by roughly half a percent. That difference is real money on large balances and makes the fdrxx vs spaxx debate largely academic.
Ease of Use
Buying SGOV is as simple as purchasing a stock in your brokerage account. T-Bills can be bought directly through TreasuryDirect or brokers. You retain liquidity while earning more.
The Tax Angle
Don’t forget state tax savings. SPAXX and FDRXX earnings are fully taxable; Treasuries are not. That boosts your net return even further.
Final Word
The next time you compare fdrxx vs spaxx, remember they’re two sides of the same coin—safe but inefficient. Moving to SGOV or T-Bills lets you capture today’s high rates without taking any extra risk.