lhendricks92 said:
I'm well aware of the FNBO account, thanks.
Yep, didn't say you weren't.



Simple rate on the FNBO account is 5.84%.

Yep, I was the one who listed the yield conversion in this thread.


Opening another account that I'm going to close in 6 weeks for 14 basis points isn't worth it.

That's all that I was asking, no need for any abrasive responses.

However, you could have opened it months earlier and not just with 6 weeks to go. Where were you getting 5.7% two months ago?

lhendricks92 said:ScootyPuffSr said:no need for any abrasive responses.

interesting.

useless

^^^^That is exactly right for you.

I was just curious why buy 100 shares by making several online attempts and phone calls. That sounds like a hassle.

dolmar said:ScootyPuffSr said:^^^I'm a big alternate methods fan and I think Dolmar is incredibly valuable for bringing this to our attention.

That being said, just to play devil's advocate...why are you buying 5.7% 28 day *today*. FNBO will last for at least another 45 days. That 5.7% is fully state and federal taxable, right?

Was signing up for an FNBOD account too much of a hassle and you already had Fido?

Again, I think these are an interesting product and I have over $50K at Fido. Just curious why you are making the jump now on a 28 day reset.

Scooty reason I use ARS/VRDN/Repo/Discount notes over opening accounts like FNBO is I dont want to waiste my time rate chasing. Also I have over $7 figures cash position and I dont trust these small banks with over FDIC limits. Also I get lots of benifits from Citigroup in form of a 5% checking accounts, free fed wires, free Quicken access including Quicken Bill Pay, free computer checks, unlimited ATM rebates, credit card waivers, 2 free corp Safety deposit boxes, 2400 TYP per month, etc all of which are worth more to me as thoses benifits are not taxable. So if I can get a rate of 5.60-5.90%(my Average return currently is about 5.78% so on $1 million we are talking about $58 bucks a month or about $700 a year and TYP are worth $288 if redemed for GC and more if returned for airlines tickets) vs a rate of 5.84% and rating chasing and hope I can continue to find 6% deals always. I just prefer to just stay at Citi and be able to sleep at night as everything I am buying in general is backed by Citi except ARS which I currently have $100k worth only at 5.81% and getting 1 consolidated statement showing all my assets.

Some people prefer to household accounts so they can get benifits like the ones I listed I get from Citi which make up for the loss of a couple of basis points.

ditto.

ScootyPuffJr said: was just curious why buy 100 shares by making several online attempts and phone calls. That sounds like a hassle.

only a one time hassle to place my first order. that FNBO thread is full of hassles far in excess of what i experienced.

reasons NOT to rate chase: no risk of hard pull, no extra 1099s, no collected balance vs ledger balance, etc. thought these were obvious.

Thinking about jumping into ARS via Fidelity and had a couple of questions...
1) Looking at 8/15 auctions ,the highest anticipated rate for AAA rated resets I see is 5.20% so there is nothing worth trying for tomorrow since its not close to the ~5.7% that you guys got a few days ago? Or do you just bid on them anyways and try to get the higher yields?
2) Does the $ need to be in core fund or will they liquidate FSLXX as necessary?
Thanks in advance.

lhendricks92 said:sushiosushi said:Thinking about jumping into ARS via Fidelity and had a couple of questions...
1) Looking at 8/15 auctions ,the highest anticipated rate for AAA rated resets I see is 5.20% so there is nothing worth trying for tomorrow since its not close to the ~5.7% that you guys got a few days ago? Or do you just bid on them anyways and try to get the higher yields?
2) Does the $ need to be in core fund or will they liquidate FSLXX as necessary?
Thanks in advance.

1) You can put in a limit order for the lowest rate you'll accept, so there's no risk of getting a crappy yield.

2) You don't need cash in the core to place the trade, but I was told you need to have enough cash in the core to settle the trade by the next business day. I placed my order with a $0 core balance, and they didn't auto-sell FSLXX.
I just read this very interesting alternate investment vehicle. Thanks dolmar.

I keep quite a huge chunk of cash in FSPXX (Fido CA AMT-free MMF) and VCTXX (Vanguard CA MMF). I am thinking of moving part of it into 7-day CA AMT-free ARS. From my understanding, the main pro is the higher yield. The MMF yields me around 3.3% APY after AMT while I can get a 3.5% rate after AMT (APY should be 3.6% or 3.7%? Where can I find a converter for this?).

The cons:

1. Less liquidity (if I need to liquidate on a non-reset day, I might experience a loss in principal). Also I don't have the convenience writing checks against a MMF. But a 7-day reset is a very short time that I can live with.

2. Less diversified than a MMF since a minimum of $25k is allocated to one issuer.

Anyone got any more to add?

Also, if I jump in, I will use Fidelity since I already have an account with them. My questions

1. Can anyone confirm that Fidelity would issue the proper tax-reporting forms at tax time?

2. After placing a trade, would Fido automatically sell my non-core MMF to pay for the ARS or do I have to sell the non-core MMF to pay for the ARS?

3. lhendricks92, you mention using a limit order. Is this for Fidelity? And presumably only if you have a huge trade (>$1m)?

Thanks.

lhendricks92 said:you're not actually placing a competitive bid. you'll get the prevailing auction coupon rate regardless, but you can specify a minimum rate you'll accept. doesn't have to be a huge order. (mine was 100K.)

they don't auto-sell non-core mmf to cover. (at least not on the day of the trade.) i manually placed a FSLXX sell order to cover the reset purchase the next day. so, actually i don't know if they would auto-sell on the settlement date. hmmmm....Just to add a datapoint...

I purchased a reset on Monday through Fidelity with no money in Core. FSLXX was automatically sold yesterday to cover the transaction.

This is contrary what I have repeatedly heard from the Fidelity phone reps, but it seems to automatically trigger the MM sell.

Edit to note: I have a cash account, not margin.

NorCalSci said:Further notes on my first Fidelity reset purchase:

1) Had to phone it in, as lhendricks92 posted. Experienced my longest hold time ever at Fidelity.
2) I bid the "expected rate" for $100K (minimum $50K lot) and I obtained $50K
3) There was an initial History event that showed the 50K purchase with an additional $29.95 "Interest" added in the location where commissions are usually noted
4) The first event was reversed the following day, and a new event for the same bond is listed without the "Interest"
5) My "Positions" page is properly updated, but with no info as to the reset rate.

I have to say I am a little concerned with the lack of any indication as to what the interest rate is (other than the 1.620% note rate listed with the security description). The only record of my "bid" might be the recorded phone conversation with the Fidelity trader (I understand they record all calls).

i didn't notice the disappearing commission on my order, but i might have missed the first posting.

good to know about the auto-sell. i suspected that might be the case, but i wanted to make sure i didn't screw up my first purchase.

i'm also a bit concerned about the lack of rate noted on the reset. perhaps this is because the rate continues to "reset" every X number of days?

lhendricks92 said:NorCalSci said:Further notes on my first Fidelity reset purchase:

1) Had to phone it in, as lhendricks92 posted. Experienced my longest hold time ever at Fidelity.
2) I bid the "expected rate" for $100K (minimum $50K lot) and I obtained $50K
3) There was an initial History event that showed the 50K purchase with an additional $29.95 "Interest" added in the location where commissions are usually noted
4) The first event was reversed the following day, and a new event for the same bond is listed without the "Interest"
5) My "Positions" page is properly updated, but with no info as to the reset rate.

I have to say I am a little concerned with the lack of any indication as to what the interest rate is (other than the 1.620% note rate listed with the security description). The only record of my "bid" might be the recorded phone conversation with the Fidelity trader (I understand they record all calls).

i didn't notice the disappearing commission on my order, but i might have missed the first posting.

good to know about the auto-sell. i suspected that might be the case, but i wanted to make sure i didn't screw up my first purchase.

i'm also a bit concerned about the lack of rate noted on the reset. perhaps this is because the rate continues to "reset" every X number of days?At least we are seeing the same thing when it comes to a missing rate. We'll keep our fingers crossed that Fidelity has this duck in a row.

As far as the auto-sell, hopefully it doesn't trigger manual intervention and tick them off. I have done some pretty wacky things with my Fidelity account and it always seems to find the right balance. This includes multiple buys and sells of the same security + Moneyline In + multiple Billpays + overemptying Core account to FSLXX, all in the same day. Either the Fund Manager who runs the Fidelity "Unsettled Activity" Mutual Fund is really smart, or they have a hell of a computer.

sushiosushi said:Tried for my first one this morning but didn't get it. Put in 5.65 but it settled at 5.55.
Thanks for all the help.Better luck next time. If you don't mind saying, how do you know how much it settled for, and what was the "Expected Rate" listed? The highest I saw "expected" for today was 5.45%. If you put in a bid higher than "expected" you are very cool for pushing the limits on your first try!

That might also encourage me to do the same next time...