I’ve been stashing some idle cash in Fidelity’s SPAXX money market fund. With yields of near 5% in 2023 and 2024, it’s been a safe, liquid place to park cash — better than leaving money idle in a checking account.
But those days are over. The Fed just cut rates by 25 basis points — the first trim in over a year — bringing the funds rate down to 4.00%–4.25%.
And Jerome Powell all but promised more cuts before year-end. Translation: those safe, liquid money market yields look headed lower. So it’s time to park that cash elsewhere.
Money Always Flows Where It’s Treated Best
When the Fed hiked rates in 2022–23, money market funds were the belle of the ball. Trillions of dollars rushed in because, let’s face it, 5% with no risk beats sweating through stock market volatility.
But money is a fickle date. As yields shrink, it will leave SPAXX and friends behind in search of better treatment. Where does it go next? Straight into dividend stocks that offer yields competitive with SPAXX — but with the kicker of rising payouts over time.
Here’s the reality check:
- Money markets don’t raise payouts. They fall in line with the Fed, period.
- Dividend growth stocks do. They pay you today, boost those payments year after year, and give you principal upside potential.
Here are the official calendar-year total returns for SPAXX through August 31, 2025:
| Year | SPAXX Return | 3-Mo Treasury Bill |
|---|---|---|
| 2025 (YTD) | 2.68% | 2.97% |
| 2024 | 4.92% | 5.45% |
| 2023 | 4.78% | 5.26% |
| 2022 | 1.31% | 1.50% |
| 2021 | 0.01% | 0.05% |
| 2020 | 0.26% | 0.58% |
| 2019 | 1.84% | 2.25% |
| 2018 | 1.47% | 1.86% |
| 2017 | 0.51% | 0.84% |
| 2016 | 0.04% | 0.27% |
| 2015 | 0.01% | 0.03% |
Here’s what I’ve collected from Fidelity’s SPAXX money market fund so far in 2025. These payouts came from a cash balance ranging between $170,000 and $195,000 during the year, depending on how much cash I had available from my option trades.
| Date | Dividend Collected |
|---|---|
| January 31, 2025 | $573.81 |
| February 28, 2025 | $523.81 |
| March 31, 2025 | $555.70 |
| April 30, 2025 | $458.81 |
| May 30, 2025 | $550.60 |
| June 30, 2025 | $606.77 |
| July 31, 2025 | $640.63 |
| August 29, 2025 | $650.56 |
As you can see, SPAXX has been a reliable payer, throwing off hundreds of dollars every month. But that steady income is tied directly to the Fed — and with rates now moving lower, those payouts are set to shrink.
That’s the problem: money markets can only tread water while dividend growth stocks can actually swim. They don’t just pay you today, they raise those payouts tomorrow — and that’s where my idle cash is heading next.
The Takeaway
SPAXX was a sweet deal while it lasted. But the Fed’s move is the writing on the wall: those near-5% returns are yesterday’s story.
As money market yields vanish, that cash is going to stampede toward dividend payers that actually treat investors better. That’s why I’m peeling out of SPAXX and into high-quality dividend growers right now — before the crowd shows up.
Good investing!
Greg Patrick
P.S. The first place I’m looking for ideas is in Jason Fieber’s personal portfolio. Just days ago, he added to a high-yield telecom stock he calls a “bond proxy” — a household name that stands to benefit as rates come down and debt gets cheaper. I already own this stock and am considering adding more as well. I’m also looking at a few of Jason’s other purchases…
- Jason just boosted his stake in a financial technology company with nearly 100% recurring revenue and sky-high client retention.
- He also initiated and then doubled down on a financial data and software provider that just sold off more than 40% from its highs.
- He increased his position in a leading display technology innovator at the center of the OLED revolution.
- He continued building his stake in a semiconductor packaging and test provider investing billions into U.S. onshoring.
If you want to know the exact stocks Jason is buying — and get an alert every time he makes a trade — you can join his Patreon for just $8/month. You’ll also get full access to his entire portfolio (valued at $807,561.72 as of September 2025) and the analysis behind every move. Click here to check it out.
Source: Dividends & Income
