Fidelity's Low-Key Money Market Fund is Outperforming

Fidelity Government Cash Reserves (FDRXX) has been quietly earning returns for investors, often without their knowledge. Despite the Federal Reserve's rate cuts over the past year, FDRXX has continued to perform well.

The fund invests in a rolling ladder of short-term Treasury bills, agency paper, and overnight repos backed by Treasuries. Its yield tracks the front end of the Treasury curve in near real-time, rising with Fed hikes and falling with rate cuts.

As of August 12, 2026, FDRXX's 3-month yield was 3.87%, generating over $150 per month in interest on a $50,000 cash balance. This is significantly higher than the FDIC national average 12-month CD rate of 1.68%.

Fidelity offers several government money market funds as core cash positions, each with its own characteristics. FDRXX is the default sweep for retirement and older brokerage accounts, while SPAXX is the default for newer taxable accounts. FDLXX leans more heavily into direct Treasury holdings, which can be beneficial for investors in high-tax states.