Maximize Your Savings with a SPAX Account and Earn More While You Learn to Invest

Many people hesitate to start investing because they want to learn first without risking their money. If you’ve ever thought, “I want to invest but I’m not ready to make big moves,” you’re not alone. A smart way to begin is by growing your money safely while you learn the ropes. One option that often gets overlooked is the SPAX account offered by Fidelity Investments. It allows your money to earn a higher interest rate than a typical checking or savings account, without requiring you to actively invest right away.

This post explains how a SPAX account works, why it can be a better place to park your money than traditional bank accounts or treasury bonds, and how it fits into your journey toward becoming a confident investor.

SPAX account dashboard showing competitive interest rates

What Is a SPAX Account?

A SPAX account is a type of brokerage account feature provided by Fidelity Investments. It stands for Fidelity Government Money Market Fund (SPAX). Unlike a regular checking or savings account, a SPAX account invests your money in short-term government securities, which are very low risk. This allows it to offer a higher annual percentage yield (APY) than most bank accounts.

You don’t have to actively buy or sell investments in this account. Simply opening a brokerage account with Fidelity and placing your money in the SPAX option means your funds start earning interest right away. It’s like having a savings account with a much better return.

Why Choose a SPAX Account Over a Checking or Savings Account?

Most checking and savings accounts offer very low APYs, often below 1%. This means your money grows very slowly, barely keeping up with inflation. In contrast, a SPAX account currently offers around 4% APY, which is a significant improvement.

Here’s why this matters:

• Higher returns without extra risk: SPAX invests in government securities, which are backed by the U.S. government, making them very safe.

• No need to actively manage investments: Your money grows automatically without you having to pick stocks or bonds.

• Easy access to funds: Unlike some investments, you can withdraw money from a SPAX account quickly if needed.

• Better than treasury bonds for short-term savings: Treasury bonds often offer about 3.5% APY but require you to lock your money for years to get full interest. SPAX pays interest regularly without long waits.

  
  

How Does SPAX Compare to Treasury Bonds?

Treasury bonds are a popular low-risk investment, but they come with some drawbacks for beginners or those who want flexibility:

• Long maturity periods: Bonds can take 10, 20, or 30 years to mature.

• Interest payments may be infrequent: You might have to wait months or years to receive full interest.

• Lower APY for short-term bonds: Shorter-term treasury bonds usually pay less than 3.5% APY.

  
  

SPAX accounts avoid these issues by investing in short-term government securities that mature quickly and pay interest regularly. This means your money keeps working for you without long waits or complicated management.

How to Use a SPAX Account While Learning to Invest

If you’re new to investing, a SPAX account is a great place to start. Here’s how you can use it effectively:

1. Open a brokerage account with Fidelity: This is free and straightforward.

2. Deposit money into your SPAX account: Transfer funds from your bank account.

3. Let your money grow safely: You don’t have to do anything else while you learn investing basics.

4. Study investing strategies: Use this time to read books, watch tutorials, or take courses.

5. Start investing gradually: When you feel ready, you can move money from SPAX into stocks, ETFs, or other investments.

   
   

This approach lets you build your confidence without losing potential earnings from your savings.

Practical Example: Growing $10,000 in a SPAX Account

Imagine you have $10,000 sitting in a savings account with a 0.5% APY. After one year, you’d earn about $50 in interest.

Now, if you put that same $10,000 into a SPAX account earning 4% APY, you’d make approximately $400 in interest in one year. That’s eight times more just by switching where you hold your money.

Over time, this difference grows even larger, especially if you add more money regularly or reinvest your earnings.

Things to Keep in Mind

• SPAX is not a guaranteed return: While it invests in safe government securities, the APY can fluctuate based on market conditions.

• It’s not FDIC insured: Unlike bank accounts, brokerage accounts are not insured by the Federal Deposit Insurance Corporation. However, Fidelity provides strong protections and the underlying investments are low risk.

• Check fees and terms: Fidelity does not charge fees for SPAX, but always review your account terms.

• Use it as part of a broader plan: SPAX is great for short-term savings and learning, but long-term investing will require other strategies.

  
  

Final Thoughts on Growing Your Money While Learning to Invest

Starting your investment journey can feel overwhelming. Using a SPAX account lets you keep your money safe and growing faster than a typical bank account while you build your knowledge. It offers a practical way to earn more interest without taking on risk or needing to make immediate investment decisions.

If you want to maximize your savings and prepare for investing, consider opening a Fidelity brokerage account and using the SPAX option. It’s a smart step that helps your money work harder for you from day one.

Next step: Open a brokerage account, move some funds into a SPAX account, and start learning about investing at your own pace. Your future self will thank you.

Best Regards,

Stock Market Charlie