SPAXX vs FDRXX (October 2026): 3.49% vs 3.56% 7-Day Yield
Written & reviewed by Hans Goldstein, EA, independent licensed insurance producer · CA license 4273294 · NPN 20602398Admitted to practice before the IRS
Yields, expenses and holdings re-checked against fundresearch.fidelity.com on October 3, 2026 · Reviewed
Short answer
FDRXX paid slightly more: a 3.56% 7-day yield versus 3.49% for SPAXX on October 2, 2026, per Fidelity. Both are Fidelity government money market funds with no minimum and a $1.00 target price, and the 0.07-point gap is mostly cost: FDRXX's gross expense ratio is 0.37%, SPAXX's 0.42%. FDRXX does not hold more Treasuries than SPAXX, so it is not the better pick for state tax.
Money market fund vs MYGA, after tax
What $100,000 earns in 5 years: money market fund vs MYGA, after tax
Rates used: Money market fund 3.76%, the highest 7-day yield we tracked (VUSXX, fund sites, September 23, 2026); yields change daily; change it to the rate you are offered. MYGA 5.95%, the best A-rated rate we track as of October 13, 2026: Delaware Life Pinnacle Plus 5-year (AM Best A-, negative outlook, 7/31/2026), $100,000 and up, effective October 6, 2026 (Delaware Life rate sheet).
| Money market fund, interest taxed every year | $115,550 |
|---|---|
| MYGA, tax-deferred, before tax | $133,507 |
| MYGA after paying tax on all the interest at withdrawal | $126,136 |
| Tax deferral alone adds about | $674 |
| MYGA ahead of the money market fund, after tax | $10,586 |
Assumes 22% federal and 0% state income tax, no withdrawals, rates held for the whole term. MYGA interest is taxed as ordinary income when you withdraw it, not as capital gains. Gains taken before age 59 1/2 can owe a 10% IRS penalty, and cashing out early can cost a surrender charge. In an IRA both grow tax-deferred, so the edge there is the rate alone. A MYGA is backed by the issuing insurer's claims-paying ability and your state's guaranty association up to its limits, not the FDIC. General education, not tax, legal or financial advice.
SPAXX vs FDRXX side by side
| SPAXX | FDRXX | |
|---|---|---|
| Full name | Fidelity Government Money Market Fund | Fidelity Government Cash Reserves |
| 7-day yield (10/02/2026) | 3.49% | 3.56% |
| Expense ratio, gross | 0.42% (as of 06/29/2026) | 0.37% (as of 01/29/2026) |
| Minimum to invest | $0 | $0 |
| Portfolio net assets (08/31/2026) | $461.3 billion | $245.2 billion |
| Weighted average maturity (09/22/2026) | 39 days | 36 days |
| Average annual return 1 / 3 / 5 / 10 yr (08/31/2026) | 3.49% / 4.27% / 3.42% / 2.11% | 3.56% / 4.31% / 3.46% / 2.15% |
| Redemption fee | None (Fidelity government fund) | None (Fidelity government fund) |
What each fund holds
| Holding (08/31/2026) | SPAXX | FDRXX |
|---|---|---|
| U.S. Treasury bills | 32.51% | 27.57% |
| U.S. Treasury coupons | 7.97% | 8.24% |
| Direct Treasury total | 40.48% | 35.81% |
| Agency fixed-rate securities | 8.78% | 8.90% |
| Agency floating-rate securities | 19.50% | 19.94% |
| U.S. government repurchase agreements | 33.53% | 36.50% |
| Net other assets | -2.29% | -1.15% |
The state-tax angle depends on direct U.S. government income, not on the fund's name. Fidelity publishes the percentage for each fund after year-end; repurchase agreements, a third of both portfolios, generally do not qualify. For a resident of a no-income-tax state the two funds are close substitutes and the cheaper one wins.
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Other Fidelity money market funds (October 2, 2026)
| Fidelity fund | Type | 7-day yield (10/02/2026) | Gross expense | Minimum |
|---|---|---|---|---|
| FDRXX Government Cash Reserves | Government | 3.56% | 0.37% | $0 |
| SPRXX Money Market Fund | Prime | 3.56% | 0.42% | $0 |
| FZFXX Treasury Money Market Fund | Treasury | 3.53% | 0.42% | $0 |
| SPAXX Government Money Market Fund | Government | 3.49% | 0.42% | $0 |
| FDLXX Treasury Only Money Market Fund | Treasury | 3.49% | 0.42% | $0 |
| FZDXX Money Market Fund Premium Class | Prime | 3.68% | 0.36% (0.30% net) | $100,000 |
- The whole Fidelity lineup sat between 3.49% and 3.68%. Expense ratios of 0.37% to 0.42% on most funds explain why they trail lower-cost funds elsewhere (Vanguard's VUSXX paid 3.82% at 0.07% on October 2, 2026).
- The Fed raised its target to 3.75% to 4.00% on September 16, 2026. Money fund yields follow within weeks because these funds hold paper maturing in about 36 to 39 days on average.
- How to switch: in many accounts the core position can be changed in the account features settings; the list offered depends on account type.
FDRXX vs. a 5-year MYGA: $250,000 math
| $250,000 for 5 years | FDRXX at 3.56% | 5-yr MYGA at 5.50% |
|---|---|---|
| Rate | Variable, resets daily | 5.50%, fixed for the term |
| Tax on earnings | Every year | Deferred until withdrawn |
| Value after 5 years, after 24% federal tax | ~$285,700 | ~$308,300 (tax paid at the end) |
| Protection | Not FDIC insured; seeks $1.00 NAV | Insurer claims-paying ability + state guaranty association (limits vary by state) |
| Getting out early | Daily liquidity | Surrender charge above the free-withdrawal amount; IRS 10% penalty before 59½ |
About $22,600 more after federal tax on the MYGA (24% bracket, state tax ignored). The FDRXX column assumes today's yield holds for five years; a money market yield resets daily, so that flatters it. For money you may need inside two years, or that must stay FDIC insured, the MYGA is the wrong tool. MYGA benchmark: carriers rated A or better topped out around 5.50% to 6.05% on 5-year compound-interest MYGAs, per public carrier rate sheets, October 14, 2026. Rates vary by state, premium and carrier.
Current MYGA rates · Annuity vs CD · HYSA vs money market fund
FZFXX vs SPAXX (and FDRXX)
FZFXX, the Fidelity Treasury Money Market Fund, sits between the two on yield and ahead of both on state tax. On October 2, 2026 it paid 3.53%, against 3.49% for SPAXX and 3.56% for FDRXX, with the same 0.42% gross expense ratio as SPAXX and a $0 minimum. On August 31, 2026 it held 63.86% direct Treasury securities, far more than either government fund, so a larger share of its income can be exempt from state tax.
| SPAXX | FDRXX | FZFXX | |
|---|---|---|---|
| Type | Government | Government | Treasury |
| 7-day yield (10/02/2026) | 3.49% | 3.56% | 3.53% |
| Gross expense ratio | 0.42% | 0.37% | 0.42% |
| Minimum | $0 | $0 | $0 |
| Best for | Default core cash | Most yield, no state-tax angle | Taxed states |
Is switching from SPAXX to FDRXX worth it?
For a small balance, barely. Example: at the October 2, 2026 yields, $250,000 earns about $175 a year more in FDRXX than in SPAXX before tax (0.07 points). The switch takes a few minutes where your account type allows a different core position. In a high-tax state, compare FZFXX or the Treasury-only FDLXX on an after-state-tax basis first, using how state tax works on Treasury interest. If the balance is $100,000 or more, FZDXX paid 3.68% the same day, as a prime fund.
From my desk: how I compare this to locked rates
The SPAXX-or-FDRXX question is worth a few minutes, but it is a 0.07-point decision. The bigger lever I look at on a Fidelity account is how much of the core balance has not moved in a year, because that is money earning a daily-reset rate, taxed every year.
Example: $250,000 held five years at FDRXX’s 3.56% (assumed constant) ends near $285,700 after 24% federal tax. A 5-year MYGA at 5.50% (low end of the A-rated range on October 14, 2026) ends near $308,300, with tax deferred until withdrawal, a surrender charge for early exit, and the rate backed by the claims-paying ability of the issuing insurer. I do not sell or advise on money market funds; this is the insurance side of the comparison.
SPAXX vs FDRXX: FAQ
Which pays more, SPAXX or FDRXX?
FDRXX, slightly. On October 2, 2026 Fidelity reported a 7-day yield of 3.56% for FDRXX (Fidelity Government Cash Reserves) and 3.49% for SPAXX (Fidelity Government Money Market Fund). FDRXX's gross expense ratio is 0.37% versus 0.42% for SPAXX, which accounts for most of the gap.
What is the difference between SPAXX and FDRXX?
Both are Fidelity government money market funds that invest at least 99.5% of assets in cash, U.S. government securities and fully collateralized repurchase agreements, both have a $0 minimum and both seek a $1.00 share price. FDRXX is cheaper (0.37% vs 0.42% gross) and smaller ($245 billion vs $461 billion in net assets on August 31, 2026).
Does FDRXX hold more Treasuries than SPAXX?
No, not as of August 31, 2026. Direct Treasury holdings (bills plus coupons) were 40.48% of SPAXX and 35.81% of FDRXX; FDRXX held more government repurchase agreements (36.50% vs 33.53%). An earlier version of this page said the opposite.
Is SPAXX or FDRXX exempt from state tax?
Partly, and it changes every year. Only income from direct U.S. government obligations can be state-exempt; repurchase-agreement income generally is not. Fidelity publishes each fund's percentage of income from U.S. government obligations after year-end for tax filing. Some states, including California, also require a fund to meet a minimum-holdings test before any of it passes through.
Can I switch my Fidelity core position from SPAXX to FDRXX?
In many Fidelity accounts you can change the core position in the account features settings, and the choices offered depend on the account type. If FDRXX is not listed for your account, it is not available as that account's core position.
What is FZFXX?
Fidelity Treasury Money Market Fund. On October 2, 2026 its 7-day yield was 3.53%, with a 0.42% gross expense ratio and a $0 minimum; on August 31, 2026 it held 63.86% direct Treasury securities (bills and coupons) plus 38.98% repurchase agreements.
Are SPAXX and FDRXX FDIC insured?
No. They are money market funds, not bank deposits. Each seeks to preserve a $1.00 share price but cannot guarantee it.
My take
FDRXX is the slightly cheaper and slightly higher-yielding of Fidelity's two government core funds, and neither holds meaningfully more Treasuries than the other. The difference is about 0.06% a year. For money that can sit five years, the bigger decision is fixed versus floating, not SPAXX versus FDRXX.
Hans Goldstein is an independent licensed insurance producer (CA license 4273294, NPN 20602398). He is not affiliated with Fidelity, does not sell money market funds or other securities, and gives no advice on them. Fund data is copied from the fund company's website as of the dates shown. Money market funds are not FDIC insured and can lose value. Past performance does not predict future results. MYGA figures are illustrations, not quotes.
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Disclosure
This article is general educational information, not personalized financial, tax, or legal advice. All rates, IRS limits, Social Security PIA factors, IRMAA brackets, FDIC/NCUA coverage, and state guaranty fund coverage figures are current as of the publication date and subject to change. IRMAA brackets and Roth/Traditional IRA limits cited reflect IRS guidance for 2026 and may be updated by the IRS or SSA; confirm current figures at irs.gov and ssa.gov before acting. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated annuity carriers; he does not sell bank CDs, money market funds, or Treasury securities and is not affiliated with any bank, brokerage, or government agency discussed. No compensation has been received from any third party in connection with this article. Bank CDs are FDIC-insured deposit products; credit union share certificates are NCUA-insured; money market funds are SEC-regulated investment products with no FDIC coverage; Treasuries are direct obligations of the U.S. government; MYGAs are insurance contracts backed by carrier balance sheets and state guaranty associations. These are different product categories with different protections, tax treatments, and trade-offs. Always confirm current rates and tax law with the issuer or a CPA before acting.