Money Market Transactions

I've had a Fidelity money market for 13 years set up as a Cash Flow: Savings account. I never did connect into Fidelity for transaction download. Recently I did try to connect and Fidelity told me that I had to have an Investment account - which I then set up in Q05.

How do you handle the transactions for a money market account in a Quicken investment account? Is it all cash transactions? If you use investment transactions, you then can't write checks from the account. The price of all shares is always $1.

Thanks in advance

Art

Reply to
AR
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Hi, Art.

I'm not sure just what your question is. I've had a CMA (Cash Management Account) with Merrill Lynch for about 25 years. In addition to stocks, bonds, etc., like any other stockbroker account, it includes a money market feature, including check writing. For 20 years, I wrote CMA checks to transfer funds to my checking accounts in local banks. A few years ago, I arranged to make EFT transfers to and from my banks and I haven't written any CMA checks since then. At first, the money market feature was a "money market fund", a special kind of mutual fund with shares always valued at $1, as you described. A few years ago, ML switched to a "banking program"; now, cash is swept frequently into a captive bank account that pays money market rates, then transferred back into the regular brokerage account as needed to cover transfers out of the CMA.

As we discussed here recently, there is a difference between a money market FUND and a money market ACCOUNT. An MM fund pools shareholders' cash, earns income from it, and declares dividends to divvy up the profits. An MM account pays interest on the depositor's cash, with the interest rate varying based on the changing money market. An MM fund shareholder receives dividend income; an MM account holder receives interest income. When the fund/account is just a part of a larger brokerage account, there is no practical difference, only a technical one.

When I first got Quicken, about 15 years ago, I set up that ML account as an Investment Account - and it has survived that way through a dozen or so Quicken versions. ML has always reported transfers to and from the "MM fund"/"banking program account", and I've always ignored those transfers. So far as I'm concerned, the amount in the fund/account is "just more cash". My "cash" balance in the ML account is the total of the fund/account plus the small amount that has not yet been swept (or minus the occasional deficit). I've not written a CMA check since 1991, but I see that Q2005's Enter Transaction drop-down list includes a group of choices under Cash Transactions and the first one is Write Check. If I did write a check on this account, this is where I would try to enter it in Quicken 2005. I would not bother to record ML's transfer from the "banking program" to cover the check.

A likely source of confusion, of course, is the several meanings of the word "account". :>( I have a money market account within my ML account, which is an Investing Account in Quicken. And I transfer funds to/from my checking accounts, which are Cash Flow Accounts in Quicken.

RC

Reply to
R. C. White

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