Fidelity’s Overdraft Protection for CMA Payments
Here’s a summary of the main problem and the solutions discussed:
- Main Problem: The user is seeking confirmation that monthly auto-pay transactions for the Fidelity Visa card from their Cash Management Account (CMA) will utilize self-funded overdraft protection and pull funds from their brokerage account as needed, since the CMA balance will often be lower than the required payment amount.
- Solution: Fidelity confirmed that as long as the funding account has sufficient funds, the self-funded overdraft protection will cover the payment, moving only the necessary amount to ensure the transaction goes through.
- Additional Details: Overdraft protection operates on a per-debit transaction basis, can draw from available cash and margin, and cannot use external bank accounts. If all funding accounts lack sufficient funds, the transaction will be declined.
Overall, the user received the assurance they needed regarding the functionality of the overdraft protection for their payments.
Here’s the full thread
Question regarding cash management accounts, Fidelity Rewards Visa Signature card payments and self-funded overdraft protection on the CMA.
I just recently got the Fidelity Visa card and added my existing CMA as a payment account for auto-pay. My CMA has the self-funded overdraft protection enabled via the Cash Manager and is linked to one of my brokerage accounts. Cash Manager is also set up to maintain a relatively small minimum balance because I want to keep the majority of spare cash in the SPAXX core position in the brokerage account.
Before I turn all this on and move credit card spending over to the new Fidelity Visa card I would like to get confirmation that the monthly auto-pay transactions for the Fidelity Visa from the CMA will utilize the overdraft protection and automatically pull funds from the linked brokerage account (assuming that the brokerage account always has sufficient funds) just like any other debit transaction.
This is because my CMA balance will almost always intentionally be lower than the required card payment and I want to ensure that payments will always go through and pull funds from my brokerage account as necessary.
Thanks for reaching out to us, @Hanuman. We’re happy to go over our self-funded overdraft protection with you.
The short answer is yes, as long as the funding account(s) has sufficient funds to cover the transaction.
For a quick review, self-funded overdraft protection provides emergency protection if a check, Bill Pay payment, or debit transaction exceeds the cash balance available in the Fidelity Cash Management Account core. Self-funded overdraft protection is offered through Fidelity Cash Manager.
Here are the specifics:
Fidelity Cash Manager Overdraft Protection moves only enough money from the funding accounts to the Fidelity Cash Management Account to cover the cash shortfall on a per-debit transaction basis.
• Overdraft protection draws on available cash, available margin, and noncore money market funds in the Fidelity funding accounts.
• Outside bank accounts cannot be used for overdraft protection
• Up to $99,999.99 per funding account per day can be transferred
• The minimum transfer amount a client specifies to maintain the minimum target balance does not apply to overdraft protection.
• If all the accounts in the funding hierarchy have insufficient funds available, no money is moved, and the charge is declined
Please keep in mind that the transaction may be rejected if overdraft protection is not set up correctly and a payment greater than the available balance of your funding account(s) is attempted.
More information on the Fidelity CMA and Fidelity Cash Manager can be found here: https://www.fidelity.com/cash-management/faqs-cash-management-account
Please let us know if you have more questions. We’re here to help! 🟢
Thank you. Exactly what I needed to know 🙏👍
That’s great to hear, @Hanuman! I’m glad I could help. Thanks for being a part of our community!
We’re here if more questions come up. 🟢