Cash under a Mattress is Silly
Fidelity thought it would be a good idea to turn off monthly statements for the UTMA accounts and make them quarterly instead. During a live chat with a Fidelity Representative, I noted that I have been receiving and reviewing the UTMA statements monthly for about three years. They agreed to reverse this setting so that the statements would be monthly.
As I was thinking about this, I realized the “cash” positions in all six accounts were not earning interest. Even though the dollars are small, having their “core” holding earning 0% makes no sense. Therefore, I entered buy orders for all six accounts to purchase Fidelity’s mutual fund FDRXX. The current 7-day yield for this fund is 1.63% and the expense ratio is 0.38%. This is the same fund that I use for other accounts that hold cash. The default core accounts that Fidelity offers have a higher expense ratio and a lower yield.
Jesus even acknowledged that letting wealth sit idle was foolish. He used this idea in a parable illustration. Matthew 25:27 “Then you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest.”
Pay attention to the small details. Always review your monthly statement, or at least read the first page that generally summarizes what is on the remaining pages.