If you have cash sitting in a Fidelity brokerage account, you may be deciding between FDLXX and SGOV.
Both invest primarily in short-term U.S. Treasury securities, making them popular options for investors who want income without taking on the volatility of stocks or long-term bonds.
However, they work differently.
FDLXX is a Treasury money market mutual fund designed to maintain a stable $1 share price, while SGOV is an exchange-traded fund that buys and sells throughout the trading day.
Both can provide exposure to short-term Treasury investments, but their yields, tax reporting, cash-access procedures, and price behavior differ.
For investors in states with income taxes, both funds may offer state tax benefits on qualifying Treasury income.
The actual benefit depends on the income each fund reports as eligible for exemption.
As of October 16, 2026, Fidelity reported a 3.56% 7-day yield for FDLXX. The latest iShares fund page available for this comparison reported a 3.70% 30-day SEC yield for SGOV as of October 1, 2026.
These figures use different measurement periods, so they should not be treated as a precise same-day yield comparison.
In this guide, we’ll compare FDLXX vs. SGOV, explain the tax differences, show how the income could add up, and help you decide which option may fit your cash needs.
FDLXX vs. SGOV: Quick Comparison
FDLXX vs. SGOV
Compare yields, fees, liquidity, taxes, and key features.
| Feature | FDLXX Fidelity Treasury Only | SGOV iShares Treasury ETF |
|---|---|---|
| Full name | Fidelity Treasury Only Money Market Fund | iShares 0-3 Month Treasury Bond ETF |
| Investment type | Money market mutual fund | Exchange-traded fund |
| Main investments | U.S. Treasury securities and cash | U.S. Treasury securities with remaining maturities of 0–3 months |
| Latest yield figure reviewed | 3.56% 7-day yield · Oct. 16, 2026 | 3.70% 30-day SEC yield · Oct. 1, 2026 |
| Expense ratio | 0.42% gross, as of June 29, 2026 | 0.09% |
| Share price behavior | Seeks to maintain $1.00 per share | Market price fluctuates during trading |
| Distribution frequency | Generally monthly | Monthly |
| Trading hours | Fund orders follow Fidelity’s transaction procedures | Trades on an exchange during market hours |
| State tax benefits | Qualifying Treasury income may be exempt | Qualifying Treasury income may be exempt |
| FDIC-insured | No | No |
| Best suited for | Investors wanting Treasury-focused money market cash | Investors wanting exchange-traded Treasury exposure |
Note: Yields are measured over different periods and are not directly comparable. Yields change over time. Verify current figures, expenses, and state tax treatment with the fund providers. Neither investment is FDIC-insured, and SGOV’s market price can fluctuate.
Sources: Fidelity FDLXX fund page and iShares SGOV fund page. Yields are from different dates and use different calculations. Verify current figures before investing.
What Is FDLXX?
FDLXX is the Fidelity Treasury Only Money Market Fund. It seeks to provide current income while maintaining liquidity and preserving capital.
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 U.S. Treasury securities.
These holdings include Treasury bills and other qualifying Treasury obligations. Rather than buying individual Treasury bills yourself, you can invest in a professionally managed portfolio through a mutual fund.
Why investors choose FDLXX
1. Treasury-focused investments
FDLXX focuses on U.S. Treasury securities rather than a broader portfolio of government-related investments. That can appeal to investors who want their cash invested primarily in Treasury obligations.
2. Potential state income tax savings
Interest attributable to qualifying U.S. Treasury obligations is generally exempt from state and local income taxes. FDLXX may therefore be attractive to investors who pay state income tax.
The actual exemption depends on the fund’s reported qualifying income and the rules in your state.
3. A stable share price objective
FDLXX seeks to maintain a $1 share price. This can make it easier to track the amount held in the fund without the daily market-price fluctuations typical of ETFs.
However, the fund cannot guarantee that it will always maintain that price.
What are FDLXX’s disadvantages?
FDLXX’s gross expense ratio is 0.42%, which is higher than SGOV’s 0.09% expense ratio.
The difference does not automatically mean FDLXX is the worse investment. Money market funds and ETFs have different structures, trading procedures, and cash-management features.
FDLXX also is not FDIC-insured. If you want to use it for emergency savings, you should understand how purchases, redemptions, and withdrawals work through your Fidelity account.
What Is SGOV?
SGOV is the iShares 0-3 Month Treasury Bond ETF, managed by BlackRock’s iShares.
The fund seeks to track an index of U.S. Treasury securities with remaining maturities of zero to three months. It gives investors exposure to short-term Treasury bills through a security that trades on a stock exchange.
Instead of placing mutual fund orders through Fidelity’s mutual fund system, you buy and sell SGOV shares through your brokerage account during market hours.
Why investors choose SGOV
1. A lower expense ratio
SGOV’s expense ratio is 0.09%. That is considerably lower than FDLXX’s 0.42% gross expense ratio.
For investors holding substantial balances over time, the cost difference is worth considering.
2. Intraday trading
SGOV can be bought or sold during exchange trading hours. This gives you more control over the price and timing of your trade than a mutual fund that processes orders at its applicable end-of-day net asset value.
The trade-off is that you must sell shares to turn the investment into cash.
3. Short Treasury maturities
SGOV invests in Treasury securities with remaining maturities of up to three months. Very short maturities generally limit interest-rate sensitivity compared with longer-term bond ETFs.
That can make it useful for investors who want short-term Treasury exposure while keeping interest-rate risk relatively low.
What are SGOV’s disadvantages?
SGOV’s market price can fluctuate throughout the trading day. You might sell shares for slightly less than you paid, even if the fund’s underlying Treasury securities are performing as expected.
You also need to account for trading costs, bid-ask spreads, and settlement timing.
SGOV is not a bank deposit and is not FDIC-insured.
FDLXX vs. SGOV: Which Has the Higher Yield?
Yield is one of the first things investors compare, but the measurement matters.
FDLXX’s 7-day yield reflects recent money market fund income under a standardized calculation. SGOV’s 30-day SEC yield is a standardized measure based on a different reporting period and methodology.
Because the figures are not identical measures, comparing them directly can be misleading.
Latest reported yields
FDLXX vs. SGOV: At a Glance
| Metric | FDLXX | SGOV |
|---|---|---|
| Reported yield | 3.56% | 3.70% |
| Yield type | 7-day yield | 30-day SEC yield |
| Reporting date | Oct. 16, 2026 | Oct. 1, 2026 |
| Expense ratio | 0.42% gross | 0.09% |
Important: The yields use different measurement methods and reporting dates, so they are not directly comparable. Both yields and expenses should be verified with the fund providers.
Source: Official Fidelity and iShares fund pages.
SGOV’s reported yield was higher in this snapshot, but the different measurement periods mean it is not a reliable apples-to-apples comparison.
For a proper comparison, check the latest figures from both fund providers and review the same type of yield measure where available.
How much income could you earn?
To illustrate the difference in the reported figures, suppose you invest $10,000 and the quoted yields remain unchanged for a full year.
FDLXX vs. SGOV: Potential Earnings
Compare illustrative annual income at the reported yields.
| Investment Amount | FDLXX 3.56% yield |
SGOV 3.70% yield |
Difference SGOV − FDLXX |
|---|---|---|---|
| $5,000 | $178 | $185 | $7 |
| $10,000 | $356 | $370 | $14 |
| $25,000 | $890 | $925 | $35 |
| $50,000 | $1,780 | $1,850 | $70 |
| $100,000 | $3,560 | $3,700 | $140 |
These are simple annualized illustrations before taxes, not forecasts. They assume unchanged yields and balances for a full year, which will not necessarily happen.
The actual difference may be smaller or larger when the funds’ yields change or when comparable yield measures are used.
Does SGOV’s lower expense ratio make it the better choice?
Not necessarily.
SGOV has a lower stated expense ratio, but the most useful comparison is the income you actually receive after fund expenses and taxes, together with the convenience and risks of each structure.
FDLXX offers a stable-share-price objective and mutual fund redemption procedures. SGOV offers exchange trading and intraday price control.
The best choice depends on how you intend to use the money.
FDLXX vs. SGOV: Expense Ratio Comparison
Expense ratios can have a meaningful impact on returns, especially when you hold a large cash balance for an extended period.
FDLXX vs. SGOV: Expense Breakdown
See how the stated expense ratios affect costs at different investment balances.
| Investment Balance | FDLXX 0.42% gross |
SGOV 0.09% |
Annual Difference |
|---|---|---|---|
| $10,000 | $42.00 | $9.00 | $33.00 |
| $25,000 | $105.00 | $22.50 | $82.50 |
| $50,000 | $210.00 | $45.00 | $165.00 |
| $100,000 | $420.00 | $90.00 | $330.00 |
These figures are estimates based on the stated expense ratios and constant balances. They are not separate bills that you necessarily pay; fund operating expenses are reflected in fund performance.
The expense ratio is only one part of the cost of investing. SGOV investors may also incur trading costs or bid-ask spread costs. FDLXX transactions follow mutual fund procedures and may have different operational considerations.
Important: Do not subtract the expense ratio from the published yield a second time when estimating income. The quoted yield measures already account for fund expenses under their respective calculation methods.
FDLXX vs. SGOV: Which Is Better for Taxes?
Taxes are one of the most important reasons investors compare FDLXX and SGOV.
Both funds invest primarily in U.S. Treasury securities, and qualifying interest from direct Treasury obligations is generally exempt from state and local income taxes. The income is generally taxable at the federal level.
However, the exact percentage of each fund’s distributions that qualifies for state tax exemption should be checked using the fund’s annual tax information.
How FDLXX is taxed
FDLXX focuses on Treasury securities and seeks to invest in securities whose interest is exempt from state and local income taxes.
That can make it attractive to investors in states with income taxes.
But do not assume that every dollar of the fund’s distribution is automatically exempt. Use Fidelity’s annual tax reporting to determine the qualifying amount and check your state’s requirements.
How SGOV is taxed
SGOV also invests in short-term U.S. Treasury securities.
The portion of its distributions attributable to qualifying Treasury interest may be exempt from state and local income taxes. The actual percentage can vary, so investors should consult the fund’s annual tax information.
The fact that SGOV is an ETF does not automatically make its distributions more or less tax-efficient than FDLXX. What matters is the character of the income, your tax circumstances, and the rules that apply to you.
Example: How state tax savings could change the decision
Suppose you receive $3,600 in annual income from a Treasury-focused investment and 95% of that income qualifies for state income tax exemption.
If your state income tax rate is 5%, the potential state tax savings would be:
$3,600 × 95% × 5% = $171
This is an illustrative example, not a claim about either fund’s actual qualifying income percentage.
Your actual tax savings depend on the fund’s annual tax information, your state, and your individual circumstances.
How to verify your state tax benefit
- Download the annual tax information for FDLXX or SGOV.
- Find the percentage of distributions attributable to qualifying U.S. government obligations.
- Check your state’s rules for exempting that income.
- Calculate the potential savings using your state income tax rate.
- Keep the relevant tax documents for your records.
If you invest through an IRA or another tax-advantaged account, the state tax benefit may not provide the same immediate advantage. The account’s own tax rules still apply.
FDLXX vs. SGOV: Which Offers Better Liquidity?
Liquidity is not just about how quickly you can sell an investment. It is also about how easily you can access the money when you need it.
This is one of the biggest practical differences between FDLXX and SGOV.
FDLXX liquidity
FDLXX is a mutual fund. Transactions are processed according to Fidelity’s order procedures, generally at the applicable end-of-day net asset value.
The fund seeks to maintain a $1 share price, so its value is relatively straightforward to track. Fidelity’s Treasury money market funds do not impose a fee upon the sale of shares under their stated fund terms, but you should confirm the current redemption and account procedures.
If you want to use FDLXX for short-term cash management, check how the proceeds become available for withdrawals or other transactions in your account.
SGOV liquidity
SGOV trades on an exchange, so you can place a buy or sell order during market hours.
You can use a market order or a limit order, depending on your preferences and brokerage options. A limit order lets you specify the price you are willing to accept, although execution is not guaranteed.
After a sale, the proceeds generally settle on the standard U.S. securities settlement cycle, currently T+1 for most ETF trades. Your broker’s rules and account settings determine when the proceeds can be withdrawn or used for particular purposes.
Which is more liquid?
Both can be liquid investments, but they provide access in different ways.
- FDLXX: Mutual fund transactions processed under Fidelity’s procedures, with a stable-share-price objective.
- SGOV: Exchange trading with intraday pricing, but a market price that can fluctuate.
If you need money immediately for a bill, neither should automatically replace a checking account or an appropriate insured savings account.
FDLXX vs. SGOV: Which Is Safer?
Both funds invest primarily in U.S. Treasury securities, so they have relatively low credit risk compared with investments in corporate bonds.
However, neither fund is risk-free.
FDLXX risks
FDLXX seeks to maintain a stable $1 share price, but it cannot guarantee that outcome.
It is a mutual fund, not a bank deposit, and it is not insured by the FDIC or another government agency. Investors should review the fund’s prospectus and understand the risks associated with its holdings.
SGOV risks
SGOV’s short-maturity Treasury holdings generally limit interest-rate sensitivity, but its share price can fluctuate during trading.
If you sell shares at an unfavorable market price, you could receive less than you paid. The fund’s market price may also differ slightly from its net asset value.
Are either fund FDIC-insured?
No. Neither FDLXX nor SGOV is an FDIC-insured deposit account.
Although U.S. Treasury obligations are backed by the U.S. government, that does not mean the fund shares themselves are guaranteed or insured.
If your priority is insured cash rather than investment exposure, compare the funds with an eligible FDIC-insured bank account.
FDLXX vs. SGOV: Which Is Better for an Emergency Fund?
An emergency fund should be available when you need it for unexpected expenses such as a car repair, medical bill, or loss of income.
FDLXX and SGOV can be considered for some cash reserves, but the right choice depends on how quickly you may need the money.
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 value a stable-share-price objective.
- You may benefit from state tax treatment on qualifying Treasury income.
- You understand the fund’s redemption and withdrawal procedures.
When SGOV may make sense
SGOV may be worth considering if:
- You want short-term Treasury exposure through an ETF.
- You value a low expense ratio.
- You want to trade during market hours.
- You are comfortable with small market-price fluctuations.
- You understand the settlement process before withdrawing cash.
Should you keep your entire emergency fund in either fund?
Not necessarily.
Consider keeping the portion you might need immediately in an accessible bank account with appropriate deposit insurance. You may choose to hold additional reserves in a money market fund or short-term Treasury ETF if you understand the risks and transaction requirements.
For a broader comparison of cash options, read our guide to SGOV vs. SPAXX for an emergency fund.
You can also read SPAXX vs. SGOV vs. HYSA to compare a money market mutual fund, a Treasury ETF, and a high-yield savings account.
FDLXX vs. SGOV: Which Should You Choose?
The right choice depends on what you value most.
FDLXX vs. SGOV: Which Fits Your Needs?
Match your financial priorities with the option worth considering.
| Your Priority | What to Consider |
|---|---|
| Treasury-focused money market fund | FDLXX |
| Lower stated expense ratio | SGOV |
| Intraday trading | SGOV |
| Stable $1 share-price objective | FDLXX |
| Potential state tax savings | Compare the qualifying income percentages of both funds. |
| Cash management inside Fidelity | FDLXX may be convenient, depending on your account setup. |
| Immediate access to insured cash | Eligible FDIC-insured bank account |
| Emergency savings | Consider accessibility, insurance, and investment risk. |
My take
For investors who want to keep cash in a Fidelity brokerage account and value a stable-share-price objective, FDLXX may be the more convenient choice.
For investors who prefer exchange trading and want a lower-cost way to hold short-term Treasury exposure, SGOV is worth considering.
The tax comparison can be just as important as the yield. Both funds may offer state tax benefits on qualifying Treasury income, so check their annual tax information rather than assuming one is automatically more tax-efficient.
Before switching, compare the latest yields using consistent measures, calculate potential state tax savings, and consider how quickly you may need the money.
Frequently Asked Questions
Is FDLXX better than SGOV?
FDLXX may suit investors who prefer a Treasury money market mutual fund with a stable-share-price objective. SGOV may suit investors who prefer exchange trading and a lower stated expense ratio. Neither is universally better.
Does SGOV pay a higher yield than FDLXX?
The latest figures reviewed showed a 3.56% 7-day yield for FDLXX as of October 16, 2026, and a 3.70% 30-day SEC yield for SGOV as of October 1, 2026. These are different yield measures and reporting dates, so compare the latest official data before deciding.
Is FDLXX state-tax-free?
Qualifying income 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 FDLXX income qualifies.
Is SGOV state-tax-free?
The portion of SGOV distributions attributable to qualifying Treasury interest may be exempt from state and local income taxes. The qualifying percentage can change, so review iShares’ annual tax information.
Are FDLXX and SGOV FDIC-insured?
No. FDLXX is a mutual fund and SGOV is an ETF. Neither is an FDIC-insured bank deposit.
Can I lose money in FDLXX or SGOV?
Yes. FDLXX seeks to maintain a stable $1 share price but cannot guarantee it. SGOV’s market price fluctuates, and investors can lose money if they sell at an unfavorable price.
Does FDLXX pay monthly dividends?
FDLXX generally makes monthly distributions. The amount varies with the income generated by the fund and prevailing short-term interest rates.
Does SGOV pay monthly dividends?
SGOV generally distributes income monthly. The amount can change as Treasury bills mature and the fund reinvests at prevailing market rates.
Which is better for short-term savings?
FDLXX may be more convenient if you want a money market mutual fund inside Fidelity. SGOV may suit investors who prefer exchange trading. If you need insured cash immediately, an eligible bank account may be more appropriate.
Final Verdict: FDLXX vs. SGOV
FDLXX and SGOV both provide access to short-term U.S. Treasury investments, but their structures differ.
FDLXX is a money market mutual fund that seeks to maintain a $1 share price. SGOV is an ETF that trades throughout the day and has a lower stated expense ratio.
Both may provide state tax benefits on qualifying Treasury income. The actual benefit depends on each fund’s annual tax reporting and your state’s rules.
For many Fidelity users who want straightforward cash management, FDLXX is worth considering. For investors who prefer exchange trading and low-cost Treasury exposure, SGOV is a strong alternative.
Before choosing, compare the latest yields using the same measure, verify the tax treatment, and make sure the fund’s liquidity fits your needs.
Financial disclaimer: This article is for educational purposes only and is not individualized investment, tax, or legal advice. FDLXX and SGOV are not FDIC-insured deposits, and investors can lose money. Yields, expenses, and fund details can change. Review the current fund prospectuses and consult a qualified tax professional about your circumstances.
More Reads:
- What Is FDLXX? Yield, Tax Perks & Who Should Use It
- ACA Open Enrollment 2027: Key Dates, Premium Increases, and What Lost Subsidies Mean for You
- Tax Brackets Married Filing Jointly: Rates & Calculator Guide
- How to Avoid State Taxes on Treasury Interest: A Guide for U.S. Investors
- Treasury Bills vs. CDs: Which Is Right for Short-Term Savings?
