If you keep uninvested cash in a Fidelity brokerage account, you may be wondering whether SPAXX or FZFXX is the better place to hold it.
Both are Fidelity money market mutual funds designed to provide income while maintaining liquidity and seeking to preserve capital.
The biggest difference is their investment strategy.
SPAXX invests in a broader mix of U.S. government securities and government-collateralized repurchase agreements, while FZFXX focuses on U.S. Treasury securities and related repurchase agreements.
That difference can affect state income tax treatment, although both funds generally generate income subject to federal income tax.
As of October 13, 2026, Fidelity’s published pricing data showed a 7-day yield of 3.50% for SPAXX and 3.53% for FZFXX. The difference was small: just 0.03 percentage points.
Both funds also reported a 0.42% expense ratio in their published fund details.
So, should you choose SPAXX or FZFXX? The answer depends on your account’s core position, your state’s tax rules, and whether you value convenience or Treasury-focused investments.
This guide compares the funds’ yields, expenses, holdings, tax treatment, liquidity, and risks to help you make an informed decision.
SPAXX vs. FZFXX
Quick Comparison
Compare yields, investment strategy, taxes, and convenience before choosing a Fidelity money market fund.
| What matters | SPAXX Government Money Market Fund | FZFXX Treasury Money Market Fund |
|---|---|---|
| 7-day yield | 3.50% As of Oct. 13, 2026 | 3.53% As of Oct. 13, 2026 |
| Investment focus | U.S. government securities and government-collateralized repurchase agreements | U.S. Treasury securities and related repurchase agreements |
| Expense ratio | 0.42% | 0.42% |
| Initial minimum | $0 | $0 |
| State tax potential | Some income may qualify, depending on the fund’s income composition and state rules | Qualifying Treasury income may be exempt from state and local income taxes |
| Core position | Commonly available in eligible Fidelity accounts | Availability depends on account type and current options |
| FDIC-insured? | No | No |
| Best fit | Convenient brokerage cash management | Treasury-focused holdings and potential state tax benefits |
You want convenient brokerage cash management, especially if SPAXX is already your core position.
You prefer Treasury-focused investments and want to evaluate potential state income tax savings.
Important: Yields can change. Figures shown are dated October 13, 2026, and should be checked against current Fidelity disclosures. Both funds seek to maintain a stable $1 share price, but neither guarantees it or provides FDIC insurance. Actual state tax treatment depends on qualifying income and your state’s rules. Verify fund details with Fidelity .
Source: Fidelity’s published fund information. Yield figures are dated October 13, 2026, and can change. Verify the available core positions and current terms for your specific account.
What Is SPAXX?
SPAXX is the Fidelity Government Money Market Fund. Its objective is to provide as high a level of current income as is consistent with preserving capital and maintaining liquidity.
The fund normally invests at least 99.5% of its total assets in cash, U.S. government securities, and repurchase agreements that are fully collateralized by cash or government securities.
It also normally invests at least 80% of its assets in U.S. government securities and repurchase agreements for those securities.
SPAXX is widely used as the core position in eligible Fidelity brokerage accounts.
A core position functions like the account’s cash hub.
Eligible deposits and proceeds can be held there until you use the money to buy investments, make a withdrawal, or complete another transaction.
Why investors choose SPAXX
1. Convenient cash management
If SPAXX is your account’s core position, uninvested cash can be held in the fund without requiring you to place a separate buy order each time money enters the account.
That convenience is useful if you regularly deposit money, sell investments, or keep cash available for future purchases.
2. Competitive money market income
SPAXX earns income from its portfolio of short-term government-related investments. Its yield changes with market conditions and the income generated by the fund.
3. Simple brokerage account management
Investors who already use SPAXX as their core position may prefer to leave it in place rather than manage another money market fund separately.
What are SPAXX’s disadvantages?
SPAXX is not a bank savings account and is not FDIC-insured. Its goal of maintaining a stable $1 share price is not a guarantee.
Its portfolio also includes certain government-related securities and repurchase agreements rather than focusing exclusively on direct Treasury obligations. That distinction can matter when evaluating state income tax treatment.
What Is FZFXX?
FZFXX is the Fidelity Treasury Money Market Fund. It seeks to provide current income while maintaining liquidity and preserving capital.
Unlike SPAXX, FZFXX focuses on U.S. Treasury securities and related repurchase agreements.
Treasury bills, notes, and other qualifying Treasury obligations are issued by the U.S. Department of the Treasury. Interest attributable to qualifying direct Treasury obligations is generally exempt from state and local income taxes.
That makes FZFXX worth considering for investors who pay state income tax and want Treasury-focused cash investments.
Why investors choose FZFXX
1. Treasury-focused investments
FZFXX concentrates on U.S. Treasury securities and related repurchase agreements rather than the broader range of government securities held by SPAXX.
Investors who specifically want Treasury exposure may prefer this strategy.
2. Potential state tax savings
Qualifying Treasury interest is generally exempt from state and local income taxes. Depending on your state and the fund’s annual income composition, FZFXX may offer a tax advantage.
However, you should never assume that every dollar distributed by the fund is automatically state-tax-free. The actual qualifying amount and your state’s rules matter.
3. No minimum initial investment
Fidelity’s published fund information lists no minimum initial investment for FZFXX.
This makes it accessible to investors who want Treasury-focused money market exposure without needing a large starting balance.
What are FZFXX’s disadvantages?
FZFXX may not be the default cash position in your Fidelity account.
Availability depends on your account type and the core positions Fidelity offers.
If you purchase it as a regular mutual fund rather than holding it as your core position, you may need to place a separate buy or sell order.
Its yield can also change, and it is not FDIC-insured.
SPAXX vs. FZFXX: Which Has the Higher Yield?
Yield is often the first thing investors compare when deciding between money market funds.
Fidelity’s pricing data dated October 13, 2026, showed the following:
| Metric | SPAXX | FZFXX |
|---|---|---|
| 7-day yield | 3.50% | 3.53% |
| Net expense ratio | 0.42% | 0.42% |
| Net asset value | $1.00 | $1.00 |
| Initial investment minimum | $0 | $0 |
Source: Fidelity Institutional — Money Market Pricing and Performance.
FZFXX had a yield advantage of 0.03 percentage points, equivalent to three basis points.
That is a small difference. It does not necessarily mean FZFXX will continue to pay more, and it should not be the only factor in your decision.
How much income could you earn?
| Investment Balance | SPAXX at 3.50% | FZFXX at 3.53% | Difference |
|---|---|---|---|
| $5,000 | $175.00 | $176.50 | $1.50 |
| $10,000 | $350.00 | $353.00 | $3.00 |
| $25,000 | $875.00 | $882.50 | $7.50 |
| $50,000 | $1,750.00 | $1,765.00 | $15.00 |
| $100,000 | $3,500.00 | $3,530.00 | $30.00 |
Note: These are annualized estimates before taxes, assuming the reported 7-day yields remain unchanged for a full year. Actual income will vary with market rates and fund performance.
These figures are annualized illustrations before taxes. They assume the reported yields remain unchanged for an entire year. Actual income will vary as rates and fund holdings change.
Is FZFXX worth switching to for the higher yield?
For a $10,000 balance, the difference in this example is approximately $3 per year before taxes.
That is unlikely to justify a complicated account change on yield alone. But if you hold a larger balance or can benefit from state tax savings, FZFXX may deserve a closer look.
The better approach is to compare your after-tax income and account convenience rather than choosing solely on a small difference in today’s yield.
SPAXX vs. FZFXX: Expense Ratios
Fidelity’s published fund details list a 0.42% expense ratio for both SPAXX and FZFXX.
| Investment balance | Approximate annual expenses at 0.42% |
|---|---|
| $5,000 | $21 |
| $10,000 | $42 |
| $25,000 | $105 |
| $50,000 | $210 |
| $100,000 | $420 |
These are illustrative estimates assuming a constant balance. Fund expenses are reflected in the fund’s results rather than usually appearing as a separate charge to your account.
Because the expense ratios are the same in the figures reviewed, the expense ratio alone does not favor either fund.
Do not subtract the expense ratio from the published 7-day yield a second time when estimating income: the fund’s yield calculation already reflects fund expenses.
SPAXX vs. FZFXX: Which Is Better for Taxes?
Taxes are one of the most important differences between these two funds.
Both generally generate income that is taxable at the federal level. However, the state tax treatment of distributions can differ because the funds hold different types of investments.
SPAXX tax treatment
SPAXX invests in U.S. government securities and government-collateralized repurchase agreements.
Some income may qualify for state and local tax exemption, but you should not assume that all of its distributions receive the same treatment as direct Treasury interest.
The actual qualifying percentage depends on the fund’s annual income composition and applicable state rules.
FZFXX tax treatment
FZFXX focuses on Treasury securities and related repurchase agreements.
Interest from qualifying direct U.S. Treasury obligations is generally exempt from state and local income taxes. This may give FZFXX an advantage for investors who pay state income tax.
The actual benefit depends on the portion of the fund’s distributions that qualifies, your state, and your personal tax circumstances.
Example: How state taxes could affect your choice
Suppose you invest $50,000 and use the October 13 yields for illustration.
- SPAXX estimated annualized income: $1,750
- FZFXX estimated annualized income: $1,765
- FZFXX’s gross income advantage: $15
Now assume, purely for illustration, that $1,600 of FZFXX’s annual income qualifies for a state income tax exemption and your state income tax rate is 5%.
Potential state tax savings would be:
$1,600 × 5% = $80
In this example, the potential tax benefit would be greater than the $15 gross yield difference. But this is not a forecast of actual savings. The qualifying income amount is hypothetical, and SPAXX may also have qualifying income.
How to verify the tax advantage
Before filing your tax return:
- Download Fidelity’s annual tax information for SPAXX and FZFXX.
- Find the percentage of income attributable to qualifying U.S. government obligations.
- Review your state’s rules for exempting that income.
- Calculate the potential tax savings using your applicable state tax rate.
- Keep the relevant tax documents with your records.
If you hold these funds inside a tax-advantaged retirement account, the state tax exemption may not provide the same immediate benefit. The account’s own tax rules still apply.
SPAXX vs. FZFXX: Which Is Safer?
Both funds are designed to provide income, liquidity, and capital preservation, but neither is risk-free.
SPAXX invests in government securities and fully collateralized repurchase agreements. FZFXX focuses on Treasury securities and related repurchase agreements.
FZFXX’s Treasury focus can make it attractive to investors who want to limit exposure to other types of government-related securities. However, both funds are money market mutual funds, not insured bank deposits.
Can you lose money in SPAXX or FZFXX?
Yes. Both funds seek to maintain a stable $1 share price, but neither guarantees that the price will never fall.
Their short-term holdings generally have limited interest-rate sensitivity, but investors should still understand the funds’ risks and read their current prospectuses.
Are SPAXX and FZFXX FDIC-insured?
No. Neither fund is FDIC-insured.
The government backing of certain securities held by a fund does not mean the fund’s shares are guaranteed by the U.S. government.
If your priority is deposit insurance and immediate access to cash, compare these funds with an eligible FDIC-insured bank account.
SPAXX vs. FZFXX: Which Is Better for an Emergency Fund?
An emergency fund should be available when you need it for an unexpected expense, such as a car repair, medical bill, or temporary loss of income.
Both funds may be useful for certain cash-management purposes, but your decision should depend on how quickly you need the money and whether you are comfortable using a money market mutual fund.
When SPAXX may make sense
SPAXX may be suitable if:
- It is already your Fidelity account’s core position.
- You value convenient cash management.
- You regularly deposit, withdraw, or invest money through Fidelity.
- You prefer not to place separate orders for your cash balance.
When FZFXX may make sense
FZFXX may be worth considering if:
- You want Treasury-focused money market investments.
- You pay state income tax and may benefit from qualifying Treasury income.
- You are comfortable managing the fund as a separate investment if it is not your core position.
- Its current yield and tax treatment fit your circumstances.
Should you keep your entire emergency fund in either fund?
Not necessarily.
Money you might need immediately can be kept in an accessible bank account with appropriate deposit insurance. Money market funds can be considered for other cash reserves if you understand their risks and transaction arrangements.
For a broader comparison of cash options, read our guide to SPAXX vs. SGOV vs. HYSA.
Can You Use FZFXX as Your Fidelity Core Position?
This is an important practical question.
SPAXX is commonly used as a core position in eligible Fidelity brokerage accounts. FZFXX may also be available as a core position in certain eligible accounts, but availability depends on the account type and Fidelity’s current options.
Before moving your money, check the core position settings in your own account.
If FZFXX is available as your core position, the operational difference may be smaller than you expect. If it is not, you may need to purchase and sell the fund separately.
Before making a change:
- Open your Fidelity account’s cash or core position settings.
- Check which core positions are available.
- Review the current yield and expense information for both funds.
- Confirm how purchases, redemptions, and withdrawals work.
- Check the latest tax information if state tax treatment matters to you.
Do not assume that every Fidelity account offers the same core position choices.
SPAXX vs. FZFXX: Which Should You Choose?
The right choice depends on your priorities.
| Your priority | What to consider |
|---|---|
| Convenient cash management | SPAXX, especially if already your core position |
| Treasury-focused investments | FZFXX |
| Potential state income tax savings | Compare the qualifying income percentages of both funds |
| Higher yield in the latest figures reviewed | FZFXX, by a small margin |
| Lower expense ratio | Neither had an advantage in the published figures reviewed |
| Immediate access to insured cash | An eligible FDIC-insured bank account |
| Emergency savings | Consider accessibility, insurance, and investment risk |
My take
For investors who value convenience, SPAXX is often the straightforward choice when it is already the account’s core position.
For investors who want Treasury-focused holdings and may benefit from state income tax treatment, FZFXX deserves a closer look.
FZFXX’s yield was only slightly higher in the latest pricing data reviewed. That difference alone may not justify changing your setup. But if your state tax situation makes Treasury income more attractive, calculating your after-tax results could reveal a more meaningful difference.
The best choice is the one that fits your cash needs, account setup, and tax situation—not simply the fund with the highest yield today.
Frequently Asked Questions
Is FZFXX better than SPAXX?
FZFXX may be better for investors who prioritize Treasury-focused investments and potential state tax benefits. SPAXX may be more convenient if it is already the core position in your Fidelity account. Neither fund is universally better.
Does FZFXX pay more than SPAXX?
Fidelity’s published pricing data dated October 13, 2026, showed a 3.53% 7-day yield for FZFXX and 3.50% for SPAXX. The difference was small, and future yields may differ.
Is FZFXX state-tax-free?
Qualifying interest from U.S. Treasury obligations is generally exempt from state and local income taxes. However, you should check Fidelity’s annual tax information and your state’s rules to determine how much of FZFXX’s income qualifies.
Is SPAXX state-tax-free?
Some SPAXX income may qualify for state tax exemption, but the treatment depends on the fund’s income composition and your state’s rules. Do not assume that all SPAXX distributions are state-tax-free.
Are SPAXX and FZFXX FDIC-insured?
No. Both are money market mutual funds, not FDIC-insured bank deposits.
Can SPAXX or FZFXX lose money?
Yes. Both funds seek to maintain a stable $1 share price, but neither guarantees that investors will never lose money.
Can I switch from SPAXX to FZFXX?
You may be able to buy FZFXX or select it as a core position if your account is eligible. Check your account’s available options, transaction requirements, and tax implications before making a change.
Final Verdict: SPAXX vs. FZFXX
SPAXX and FZFXX are both Fidelity money market mutual funds, but they differ in their investment strategies and potential state tax treatment.
SPAXX offers convenient cash management in eligible Fidelity accounts and invests in a broader range of government-related securities. FZFXX focuses on Treasury securities and may be attractive to investors who want Treasury exposure and potential state tax savings.
As of October 13, 2026, FZFXX had a slightly higher reported 7-day yield, but the difference was only 0.03 percentage points. Both funds reported a 0.42% expense ratio.
Before switching, compare the latest yields, verify your core position options, and review the annual tax information for both funds.
For many investors, convenience will favor keeping SPAXX as the core position. For investors who prioritize Treasury exposure and state tax treatment, FZFXX may be worth evaluating.
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. Yields and fund details can change. Review Fidelity’s current prospectuses and consult a qualified tax professional about your circumstances.
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