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Re: vanguard vs fidelity

Posted: Fri Jun 01, 2018 4:06 pm
by sophie
Fidelity is very easy to deal with in almost every respect, EXCEPT for their habit of holding onto inbound transfers for a full week (sometimes more) before they "settle". It's maddening and unnecessary. I called them about it once and they mumbled something about it being a legal requirement.

Interestingly, that doesn't apply to automated investments. Fund purchases happen the same day that the funds are deducted from my bank account. If you make frequent transfers, maybe you could get around the "settle" time by setting up an automated transfer into the core account. Set it for some small amount and then just edit it (and change the date) when you want to make a real transfer.

Re: vanguard vs fidelity

Posted: Fri Jun 01, 2018 5:52 pm
by dualstow
Funny, someone is complaining about slowness at Vanguard on the bogleheads forum, and others are noting that it does not apply to automated investments.

Re: vanguard vs fidelity

Posted: Sat Jun 02, 2018 9:33 pm
by thisisallen
My experience at Fidelity is different than what is being discussed. A rep walked me thru a bond purchase (I was not charged anything for her service). Prior to speaking with her I had initiated a transfer and she was able to use it to purchase the bond. And on top of that she was able to initiate another transfer for a small amount to cover the extra that was required to complete the purchase. Perhaps it has something to do with the connection with the rep?

Edited 4 June to replace a word that the auto spell checker got wrong.

Re: vanguard vs fidelity

Posted: Mon Jun 04, 2018 1:28 pm
by dualstow
Sorry to hear that. I have little dealings with them these days. I used to put money into a solo 401(K) every year in person, but they annoyed me. (Ok, and my accountant talked me out of it. Don't ask, it's already in some other thread).

Vanguard is a bit clunky, and they have no physical branches, but it's where my money is for the most part.

Re: vanguard vs fidelity

Posted: Mon Jun 04, 2018 3:04 pm
by thisisallen
Interestingly enough, doesn’t it happen in so many fields of life that people have different experiences (success vs failure, results achieved more quickly vs more slowly, etc) trying to accomplish the same thing? This leads me to believe that there is a more subtle and more powerful influence at work. Call it karma, the fruit of one’s past actions, or whatever. It definitely helps me understand/appreciate anecdotal experiences.

Re: vanguard vs fidelity

Posted: Mon Jun 04, 2018 9:37 pm
by thisisallen
But that's the point - you're not a big a. So then why do these different outcomes happen to different people? Has to be something else going on...

Re: vanguard vs fidelity

Posted: Mon Jun 04, 2018 9:56 pm
by sophie
Pugchief, sounds like you've been unlucky. I have gotten a lot of help over the phone from Fidelity - even walked me through a trick to contribute to my solo 401K using my bank's billpay. It's just that holding onto transfers for 5 day thing that's irritating, and I guess the reps didn't have answers for you because they really can't defend that policy.

Vanguard has better fund options though, no doubt about it.

Re: vanguard vs fidelity

Posted: Wed Jun 06, 2018 6:13 am
by sophie
Fidelity now uses a select set of its money market accounts for core accounts, and you can pick the one you want & switch at will.

Their treasury-only MM isn't one of the options, but FZFXX is. Half of this is repurchase agreements, the other half is Treasuries. SEC yield is 1.4%. I wouldn't want to keep too much cash in there, but it's a nice alternative to the Ally savings account - especially if some of the interest is exempt from state/local tax. Anyone know if that's the case?

Re: vanguard vs fidelity

Posted: Wed Jun 06, 2018 12:24 pm
by barrett
sophie wrote:
Wed Jun 06, 2018 6:13 am
Fidelity now uses a select set of its money market accounts for core accounts, and you can pick the one you want & switch at will.

Their treasury-only MM isn't one of the options, but FZFXX is. Half of this is repurchase agreements, the other half is Treasuries. SEC yield is 1.4%. I wouldn't want to keep too much cash in there, but it's a nice alternative to the Ally savings account - especially if some of the interest is exempt from state/local tax. Anyone know if that's the case?
Beware of the .42% expense ratio on FZFXX though. Alas, with the ER taken into account at Fidelity, there are no great cash options... at least none that I have found so far.

Re: vanguard vs fidelity

Posted: Wed Jun 06, 2018 12:36 pm
by sophie
Thanks MangoMan!

After tax, this fund is very close to Ally's savings account. Nice. Taxes on interest is just hellacious. My little Lending Club experiment was a bit of a disaster because of this: it netted about $700 on my tiny experimental investment which sounds good until you realize that all but about $30 of it went to pay taxes.

And, now I know why Harry Browne advocated cash as the #1 candidate for tax-advantaged accounts. This is a good time to buy gold in taxable and convert gold ETFs in tax advantaged to T bills.

Re: vanguard vs fidelity

Posted: Wed Jun 06, 2018 2:34 pm
by Dieter
barrett wrote:
Wed Jun 06, 2018 12:24 pm
sophie wrote:
Wed Jun 06, 2018 6:13 am
Fidelity now uses a select set of its money market accounts for core accounts, and you can pick the one you want & switch at will.

Their treasury-only MM isn't one of the options, but FZFXX is. Half of this is repurchase agreements, the other half is Treasuries. SEC yield is 1.4%. I wouldn't want to keep too much cash in there, but it's a nice alternative to the Ally savings account - especially if some of the interest is exempt from state/local tax. Anyone know if that's the case?
Beware of the .42% expense ratio on FZFXX though. Alas, with the ER taken into account at Fidelity, there are no great cash options... at least none that I have found so far.
Vanguards Treasury MM (VUSXX) has .09% expense ratio. 50k minimum (which is why it doesn't show up in most lists; VG by default doesn't list funds with 50k+ minimums. I found it by accident -- Google search for why VG does NOT have a Treasury MM.... Hah! It might have had a lower minimum 10 years ago.)

Current yield of 1.77%

Just have $200k+ in your PP portfolio..

STT fund plus with other laddered cash another options. But possibky closest "pure" option outside of purchasing TBills yourself?

Re: vanguard vs fidelity

Posted: Wed Jun 06, 2018 3:30 pm
by stuper1
If I understand correctly, you can start with $50k+ in VUSXX and then later drop well below $50k without any problem, as long as: (a) this is in a retirement account (e.g., IRA, Roth IRA, 401k), or (b) you have at least $50k of total assets invested with Vanguard. So, you could open a PP with just slightly over $50k in VUSXX and soon thereafter use 75% of the money to buy stocks/bonds/gold.

Re: vanguard vs fidelity

Posted: Thu Jun 07, 2018 6:28 am
by sophie
stuper1 wrote:
Wed Jun 06, 2018 3:30 pm
If I understand correctly, you can start with $50k+ in VUSXX and then later drop well below $50k without any problem, as long as: (a) this is in a retirement account (e.g., IRA, Roth IRA, 401k), or (b) you have at least $50k of total assets invested with Vanguard. So, you could open a PP with just slightly over $50k in VUSXX and soon thereafter use 75% of the money to buy stocks/bonds/gold.
Are you sure you can do that??

VUSXX is outstanding but alas not available at Fidelity. I didn't know it had reopened. If so, it's the best "online savings account" available!! But, it has to be possible for the balance to drop below the $50K minimum. Do you know if a employer retirement account at Vanguard counts toward the $50K total assets invested requirement?

Re: vanguard vs fidelity

Posted: Thu Jun 07, 2018 9:22 am
by stuper1
I'm not sure. I would think so if the employer account is held directly at Vanguard. I don't think it would apply if you held VUSXX through another brokerage.

Re: vanguard vs fidelity

Posted: Thu Jun 07, 2018 11:05 pm
by jhogue
MangoMan wrote:
Wed Jun 06, 2018 6:41 pm
So the T-bills I purchased are zero coupon, i.e., they were sold at a discount and mature at $1000 in 3 months. Does anyone know if you hold these over Dec 31/Jan1, is there imputed interest that tax has to be paid on, or how does that work tax-wise?
The IRS taxes phantom income on zero coupon bonds annually. You can, however, buy zeroes in tax deferred accounts (which I have done), and their interest is not taxed by the federal government. Also, don't forget that regardless of what kind of account in which you hold them, T-bills are exempt from state and local taxes, which effectively increases their tax equivalent yield.

Re: vanguard vs fidelity

Posted: Fri Jun 08, 2018 8:55 am
by jhogue
MangoMan wrote:
Fri Jun 08, 2018 7:55 am
jhogue wrote:
Thu Jun 07, 2018 11:05 pm
MangoMan wrote:
Wed Jun 06, 2018 6:41 pm
So the T-bills I purchased are zero coupon, i.e., they were sold at a discount and mature at $1000 in 3 months. Does anyone know if you hold these over Dec 31/Jan1, is there imputed interest that tax has to be paid on, or how does that work tax-wise?
The IRS taxes phantom income on zero coupon bonds annually. You can, however, buy zeroes in tax deferred accounts (which I have done), and their interest is not taxed by the federal government. Also, don't forget that regardless of what kind of account in which you hold them, T-bills are exempt from state and local taxes, which effectively increases their tax equivalent yield.
That's what I thought, thanks. But if you hold them in a tax deferred account, you lose the state tax exemption. I guess I'll find out how complicated it is April 15. Usually, the big brokers make reporting pretty easy.
Hmmm...
If I read the finance buff.com correctly it appears that SOME states (including IL) exempt income from an IRA distribution from state taxes. Is that right??
See:
https://thefinancebuff.com/deduct-and-c ... tions.html

Ugh. State taxes regarding tax deferred accounts are getting more complicated all the time. Some have an exemption. Some have a minimum age. Some have a cap on the exemption, etc., etc., etc.,...

Re: vanguard vs fidelity

Posted: Fri Jun 08, 2018 11:41 am
by jhogue
Tax simplification: yet another reason to buy I bonds!

With I bonds, you get 30 years of tax deferral outside the increasing complications of an IRA. And that means no RMDs after age 70 ½.

Besides that, in a rising interest rate environment a ladder of I bonds is the best guaranteed protection against inflation. Currently, I-bonds are yielding 2.52%, with a fixed income component (real yield) of +0.3%. Should the Fed raise interests again, I bonds’ variable rate will reset twice per year.

I do like STTs in taxable, and Treasury zeroes in tax deferred accounts, but only after I fill my quota of I bonds.

Re: vanguard vs fidelity

Posted: Fri Jun 08, 2018 12:30 pm
by Kriegsspiel
jhogue wrote:
Fri Jun 08, 2018 8:55 am


Hmmm...
If I read the finance buff.com correctly it appears that SOME states (including IL) exempt income from an IRA distribution from state taxes. Is that right??
See:
https://thefinancebuff.com/deduct-and-c ... tions.html

Ugh. State taxes regarding tax deferred accounts are getting more complicated all the time. Some have an exemption. Some have a minimum age. Some have a cap on the exemption, etc., etc., etc.,...
From what I can gather, Pennsylvania does not exempt traditional IRA contributions from state income tax, which kinda blows.

Re: vanguard vs fidelity

Posted: Fri Jun 08, 2018 1:54 pm
by jhogue
MangoMan wrote:
Fri Jun 08, 2018 11:44 am
Hogue, you are to I-bonds what Mathjak is to Fidelity Insight. A relentless cheerleader. :P
Nah, I actually think that I bonds are the worst form of Cash equivalent, except for all others.

Besides, Medium Tex holds the tenured chair in I Bond Cheerleading. I still laugh to myself when I think about him parading around in a suit made of paper I bonds.

Re: vanguard vs fidelity

Posted: Fri Jun 08, 2018 3:07 pm
by Kriegsspiel
jhogue wrote:
Fri Jun 08, 2018 1:54 pm
I still laugh to myself when I think about him parading around in a suit made of paper I bonds.
"C'mon! Vince could go wearing a t-shirt and get laid!"
"Yea and you could go wrapped in bearer bonds I-Bonds and STILL not get laid, put the fucking pajamas back Turtle."

Re: vanguard vs fidelity

Posted: Fri Jun 08, 2018 5:08 pm
by thisisallen
Following the bouncing ball here...
if tax deferral is not an issue right now then is it best to buy I bonds or 1 yr t-bills or what?
Thx

Re: vanguard vs fidelity

Posted: Fri Jun 08, 2018 5:37 pm
by Dieter
IBonds rock if can lock up the funds for a year.

Actually beat inflation before (deferred) taxes; no state taxes (same as STT); tax free if spend on qualified education or a couple other things.

IBonds (2.52%) slightly higher than current 1 year TBill rate.

Inflation protection.
Limited to $10k per SSN per year.
Hard locked in for a year (I think). 3-Month penalty if withdraw before 5years.

Slightly higher yield than Vangiards STT adm fund (which has principle risk - 2.2yr duration)

For deep cash, IBonds are hard to beat.

Re: vanguard vs fidelity

Posted: Sat Jun 09, 2018 1:01 pm
by jhogue
thisisallen wrote:
Fri Jun 08, 2018 5:08 pm
Following the bouncing ball here...
if tax deferral is not an issue right now then is it best to buy I bonds or 1 yr t-bills or what?
Thx
I think of Cash as the most customized and personalized part of the HBPP. Both I bonds and and 1 yr T-bills are US Treasury issued debt, so they are equally as safe and stable as a Uncle Harry's proverbial Treasury money market fund.

But I bonds and 1 year T-bills do have different features and therefore can play different roles in each individual investor's Cash strategy. I bonds are not liquid until they are one year old, so I only use I bonds for Deep Cash, with funds I don't need for at least 2-3 years. 1 year T-bills are completely liquid from the day you buy them to their date of maturity. Currently, I use T bills as a backstop for money market funds.

Re: vanguard vs fidelity

Posted: Sat Jun 09, 2018 1:52 pm
by thisisallen
Very good, actionable replies about handling these things as cash. Appreciated

Re: vanguard vs fidelity

Posted: Sat Jun 09, 2018 5:19 pm
by sophie
Sort of like cash. Strong emphasis on 'deep cash', as in you never want rebalance out of them. Take them into retirement and cash them in when you're ready to deal with the tax implications. I use 1/3 of total cash as my rule of thumb, so I don't buy I bonds every year.