SPAXX vs HYSA: Which Should You Pick?
Should cash leave Fidelity's core for a bank? SPAXX gets no state-tax break in CA, CT or NY, so the yield is close to a wash; access and FDIC decide it. With a calculator.
SPAXX is the cash Fidelity holds for you by default; a high-yield savings account is a bank deposit. SPAXX yielded 3.33% on August 31, 2026 and reports about half its income as state-tax-exempt government securities. The catch is that California, Connecticut and New York require a fund to hold 50% in government obligations at every quarter end before any of it is exempt, and SPAXX missed that for 2025.
Quick answer
Close to a wash on yield, so decide on access. In California, Connecticut and New York SPAXX gets no state-tax break, so any bank paying above 3.33% wins there after tax. In other taxing states the break applies to about half the income, and a bank needs roughly 3.46% to match at a 5% state rate. On one modeled $50,000 against a 3.40% bank the gap ran about $20 a year, in the bank’s favor in California and Washington and in SPAXX’s favor in a 5% state. Keep the cash that funds purchases in SPAXX; move the cash that just sits only if the bank clears the threshold. For yield inside Fidelity, SGOV or FDLXX beat both.
| SPAXX | HYSA | |
|---|---|---|
| What it is | Government money market fund | Bank deposit |
| Yield (dated) | 3.33% 7-day, Aug 31 2026 | Varies by bank; you enter it |
| Expense ratio | 0.42% (already in the yield) | None |
| 2025 income from US gov't securities | 50.90% | 0% |
| CA / CT / NY exemption | None (missed the quarterly test) | None |
| Insurance | None; SIPC covers the broker | FDIC, $250k per depositor per bank |
| Access | Same-day at Fidelity | Instant at own bank; ACH 1-3 days otherwise |
Who should pick which
Keep SPAXX for cash that funds Fidelity purchases, and for anyone who values one fewer account over about $20 a year.
Pick the bank for stored cash when its APY clears SPAXX’s threshold at your rates, which in California, New York and no-tax states is simply above 3.33%, and when FDIC insurance is worth something to you.
Pick neither if the goal is yield: SGOV or FDLXX inside Fidelity beat SPAXX after tax, most of all in the three states above.
Does this decision matter?
Figures are each issuer’s published numbers on the dates shown. The government-securities percentage is for tax year 2025 and is republished each January.
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