If you keep cash in a Fidelity brokerage account, you may be deciding between FDLXX and SPAXX.
Both are Fidelity money market mutual funds designed to provide income while maintaining a stable $1 share price.
The main difference is what they invest in and how their income may be taxed.
FDLXX focuses on U.S. Treasury securities, while SPAXX invests in a broader mix of government-related securities and repurchase agreements.
FDLXX may appeal to investors who want Treasury-focused cash holdings and potential state income tax savings.
SPAXX may be more convenient for investors who already use it as their Fidelity account’s core position.
Neither fund is FDIC-insured, and neither guarantees that you will never lose money.
In this guide, we’ll compare FDLXX vs. SPAXX, including yields, expenses, taxes, liquidity, risks, and how to decide which fund fits your cash needs.
FDLXX vs. SPAXX: Quick Comparison
| Feature | FDLXX | SPAXX |
|---|---|---|
| Full name | Fidelity Treasury Only Money Market Fund | Fidelity Government Money Market Fund |
| Fund type | Government money market fund | Government money market fund |
| Primary investments | U.S. Treasury securities | U.S. government securities and repurchase agreements |
| Objective | Income, liquidity, and principal stability | Income, liquidity, and principal stability |
| Share price target | $1.00 | $1.00 |
| Expense ratio | 0.42% | 0.42% |
| Federal income tax | Generally taxable | Generally taxable |
| State income tax | Treasury income may qualify for exemption | Depends on the qualifying income portion |
| FDIC insurance | No | No |
| Core position availability | Depends on account | Available as a core position in eligible Fidelity accounts |
| Best suited for | Investors prioritizing Treasury exposure and potential state tax savings | Investors prioritizing convenient cash management |
Expense ratios are based on Fidelity’s published figures as of June 29, 2026. Fund features, account eligibility, and tax treatment should be verified before investing.
What Is FDLXX?
FDLXX is the Fidelity Treasury Only Money Market Fund.
It invests primarily in U.S. Treasury securities and seeks to provide current income while maintaining liquidity and stability of principal.
Treasury securities include instruments such as Treasury bills, notes, and other obligations issued by the U.S. government.
The fund normally invests at least 99.5% of its total assets in cash and U.S. Treasury securities.
It also normally invests at least 80% of its assets in Treasury securities.
Why investors consider FDLXX
1. Treasury-focused investments
FDLXX focuses on U.S. Treasury obligations rather than using the broader mix of government-related investments found in some other money market funds.
2. Potential state income tax benefits
Interest from qualifying U.S. Treasury obligations is generally exempt from state and local income taxes.
This can make FDLXX attractive to investors who pay state income tax.
However, the exact tax benefit depends on the fund’s qualifying income, your state’s rules, and your individual tax situation.
3. Cash management
FDLXX seeks to maintain a $1 share price and provides access to a portfolio of short-term investments.
It can be useful for cash that you want to keep invested in a Treasury-focused money market fund.
What to know before choosing FDLXX
FDLXX is a mutual fund, not a bank deposit. It does not receive FDIC insurance.
It may also require a purchase transaction rather than automatically holding your uninvested cash as your account’s core position.
Check your account’s available core choices and the fund’s transaction requirements before relying on it for everyday cash access.
What Is SPAXX?
SPAXX is the Fidelity Government Money Market Fund. It seeks to provide current income while preserving capital and liquidity.
The fund invests in government securities, cash, and repurchase agreements backed by government securities. Its portfolio is not limited to direct U.S. Treasury obligations.
SPAXX is widely used in Fidelity brokerage accounts as a core position, depending on account type and eligibility.
Why investors consider SPAXX
1. Convenient cash management
When SPAXX is your account’s core position, eligible cash balances can be held in the fund without requiring you to place a separate purchase order for every deposit.
2. Government-focused investments
SPAXX invests in government-related instruments and seeks to maintain a stable $1 share price.
3. Simple account management
Investors who already use Fidelity for brokerage transactions may prefer keeping their cash in the account’s core position rather than managing another money market fund separately.
What to know before choosing SPAXX
SPAXX is not FDIC-insured. Its government-related holdings do not make it identical to a bank savings account.
Its state tax treatment may also differ from FDLXX. Some SPAXX income may qualify for state tax exemption, but the qualifying percentage depends on the fund’s holdings and the applicable tax rules.
FDLXX vs. SPAXX: Which Pays a Higher Yield?
Money market fund yields change with short-term interest rates and portfolio conditions. A fund that pays more today may not pay more next month.
Fidelity’s institutional daily pricing data listed the following figures for September 28, 2026:
| Metric | FDLXX | SPAXX |
|---|---|---|
| 7-day yield | 3.47% | 3.48% |
| Net asset value | $1.00 | $1.00 |
| Expense ratio | 0.42% | 0.42% |
Source: Fidelity Institutional daily pricing, September 28, 2026.
At that snapshot, SPAXX had a yield advantage of 0.01 percentage points. That difference is small and can change as the funds’ yields move.
How much would you earn on $10,000?
Using those yields as an illustration:
| Investment | Approximate annualized income |
|---|---|
| $10,000 in FDLXX at 3.47% | $347 |
| $10,000 in SPAXX at 3.48% | $348 |
| Difference | $1 |
These figures assume the quoted yields remain unchanged for a full year. Actual income will vary, and the figures are before taxes.
The takeaway: Do not choose between FDLXX and SPAXX based on a one-basis-point yield difference alone. Consider taxes, account convenience, and the funds’ investment strategies.
FDLXX vs. SPAXX: Which Is Better for Taxes?
Taxes are one of the most important differences between these funds.
Both funds generally generate income that is taxable at the federal level. However, qualifying income from direct U.S. Treasury obligations is generally exempt from state and local income taxes.
Because FDLXX focuses on Treasury securities, it may offer a larger qualifying state-tax-exempt income portion than SPAXX.
That does not mean every dollar distributed by FDLXX is automatically exempt from state income tax. The actual amount depends on the fund’s annual income composition and your state’s rules.
Example: How state taxes can change the result
Suppose you invest $50,000 in a money market fund and receive $1,750 in annual income.
Assume, for illustration, that 95% of the income qualifies for a state income tax exemption. Your state income tax rate is 5%.
The potentially exempt income would be:
$1,750 × 95% = $1,662.50
The potential state tax savings would be:
$1,662.50 × 5% = $83.13
This is an illustrative calculation, not a statement about either fund’s actual tax-exempt percentage.
Your actual savings depend on the fund’s published tax information, your state, and your tax circumstances.
How to check the state tax treatment
Before filing your taxes:
- Find the fund’s annual tax information on Fidelity’s website.
- Check the percentage of income attributable to qualifying U.S. government obligations.
- Review your state’s rules for exempting that income.
- Apply the qualifying percentage to the relevant distributions.
- Keep the fund’s tax documents with your records.
Some states have specific requirements for the percentage of a fund’s assets that must be invested in qualifying government obligations. Do not assume that the rules are identical in every state.
FDLXX vs. SPAXX: Which Is Safer?
Both funds are designed to maintain a stable $1 share price, but neither guarantees that result.
FDLXX’s Treasury-focused strategy and SPAXX’s government-focused strategy both involve short-term securities. Their portfolios, however, are not identical.
A money market mutual fund can lose value. It is also different from an FDIC-insured bank account.
What about the risk of losing money?
The funds seek to preserve the value of your investment, but investors should understand that:
- The $1 share price is an objective, not a guarantee.
- Money market funds are not bank deposits.
- They are not insured by the FDIC or another government agency.
- Income can decline when short-term interest rates fall.
- Fund expenses reduce the income available to investors.
If you need money for an immediate bill or an emergency, consider whether a bank deposit account offers the access and insurance you need.
FDLXX vs. SPAXX: Which Is Better for an Emergency Fund?
The right choice depends on how you use your emergency savings.
An emergency fund should be accessible when an unexpected expense arises. That could include a medical bill, car repair, job loss, or urgent home repair.
When FDLXX may make sense
FDLXX may be worth considering if:
- You already use Fidelity for cash management.
- You want Treasury-focused money market exposure.
- You live in a state where qualifying Treasury income receives favorable tax treatment.
- You understand how to buy and sell the fund in your account.
When SPAXX may make sense
SPAXX may be worth considering if:
- It is already your Fidelity account’s core position.
- You value simple cash management.
- You want to avoid managing a separate fund purchase.
- You prefer to keep your uninvested brokerage cash in the existing core position.
Should you keep your entire emergency fund in either fund?
Not necessarily.
Consider keeping the portion you may need immediately in an accessible bank account. You can evaluate money market funds for additional reserves if you understand their risks and how quickly you can access the proceeds.
The right balance depends on your expenses, job stability, other liquid assets, and comfort with investment risk.
For more detail, read our guide to SGOV vs. SPAXX for an emergency fund.
Can You Use FDLXX as Your Fidelity Core Position?
FDLXX and SPAXX do not necessarily serve the same operational role in a Fidelity account.
SPAXX can serve as a core position in eligible accounts. FDLXX may need to be purchased separately, depending on your account and available options.
If you want to hold FDLXX, check the following:
- Confirm that the fund is available in your account.
- Review any minimum investment or transaction requirements.
- Understand how uninvested cash is held before you purchase the fund.
- Check the settlement and withdrawal process.
- Make sure enough cash remains available for pending transactions.
Do not assume that selling a money market fund and withdrawing cash work exactly like withdrawing from a bank checking account.
FDLXX vs. SPAXX: Which Should You Choose?
Your decision should depend on your priorities rather than a small difference in current yield.
| Your priority | What to consider |
|---|---|
| Convenient Fidelity cash management | SPAXX, if available as your core position |
| Treasury-focused investments | FDLXX |
| Potential state income tax savings | Compare each fund’s qualifying income percentage |
| Emergency savings | Consider accessibility, insurance, and investment risk |
| Highest current yield | Compare the latest yields before investing |
| Simplicity | Consider the fund already used by your account |
For investors who value a simple Fidelity cash position, SPAXX may be convenient. For investors who want Treasury-focused holdings and may benefit from state tax treatment, FDLXX deserves a closer look.
Neither choice is universally better.
Frequently Asked Questions
Is FDLXX better than SPAXX?
It depends on your priorities. FDLXX focuses on Treasury securities and may provide state tax benefits. SPAXX may offer simpler cash management when used as your account’s core position.
Is FDLXX tax-free?
No. FDLXX income is generally taxable at the federal level. Qualifying income from U.S. Treasury obligations may be exempt from state and local income taxes, subject to applicable rules.
Is SPAXX state-tax-free?
Not necessarily. A portion of SPAXX income may qualify for state tax exemption. The qualifying percentage and state treatment depend on the fund’s income composition and your state’s rules.
Does FDLXX have a higher yield than SPAXX?
Not always. Yields change over time. Compare the latest published 7-day yields before making a decision.
Are FDLXX and SPAXX FDIC-insured?
No. Both are money market mutual funds, not FDIC-insured bank deposits.
Can I lose money in FDLXX or SPAXX?
Yes. Both funds seek to maintain a stable $1 share price, but neither guarantees that the share price will never fall.
Can I use FDLXX for emergency savings?
You can consider it for part of your emergency savings, but account access and investment risk matter. Keep money needed immediately in an account that provides suitable access and protection.
Should I switch from SPAXX to FDLXX?
Before switching, compare current yields, the state-tax-exempt income percentage, transaction requirements, and your account’s core position. A small yield difference alone may not justify a change.
Final Verdict: FDLXX vs. SPAXX
FDLXX and SPAXX both provide ways to hold cash in a Fidelity investment account, but they have different portfolio strategies and account-use considerations.
FDLXX may be attractive to investors who prioritize Treasury exposure and potential state income tax savings. SPAXX may be more convenient for investors who want their uninvested cash to remain in an eligible Fidelity core position.
Before choosing, compare the latest yields and expense information, check your state’s tax rules, and confirm how the fund works in your account.
For many investors, the most useful question is not simply which fund pays more today. It is which fund fits their cash needs, tax situation, and preferred account setup.
Financial disclaimer: This article is for educational purposes only and is not individualized investment, tax, or legal advice. Money market mutual funds are not FDIC-insured and can lose value. Review each fund’s current prospectus and consult a qualified tax professional about your situation.
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