Choosing the right brokerage firm is a cornerstone of successful investing. With a myriad of options available, each boasting unique features and fee structures, making an informed decision can feel overwhelming. Fidelity Investments consistently ranks among the top choices for investors of all levels in the United States.
This comprehensive review delves into Fidelity’s diverse account offerings, transparent fee schedule, and the wide array of investment products available. We’ll explore the platforms, tools, and resources designed to empower investors, helping you determine if Fidelity aligns with your financial goals and investing style.
Understanding Fidelity Investments: A Legacy of Trust
Founded in 1946, Fidelity Investments has grown into one of the largest and most diversified financial services companies globally. Headquartered in Boston, Massachusetts, it serves millions of individual investors, businesses, and institutions. Fidelity has built a reputation for providing a wide range of financial products and services, combined with robust research tools and a commitment to low costs.
Their longevity in the industry speaks volumes, navigating numerous market cycles while continuously adapting to the evolving needs of investors. They manage trillions of dollars in assets, highlighting the significant trust placed in them by their clientele. This scale allows Fidelity to invest heavily in technology and customer support, offering a comprehensive ecosystem for managing finances.
Fidelity Account Types: Options for Every Investor
Fidelity excels in offering a broad spectrum of account types, catering to various financial objectives, from general investing and retirement planning to education savings and cash management.
Brokerage Accounts
- The Fidelity Account® (Individual or Joint): This is the standard taxable brokerage account. It provides flexibility for buying and selling a wide range of securities like stocks, bonds, ETFs, mutual funds, and options. There are no minimums to open an account and no maintenance fees.
- Business Accounts: Fidelity offers specialized accounts for businesses, including corporate, partnership, and sole proprietorship options.
Retirement Savings Accounts (IRAs and More)
Fidelity is particularly strong in the retirement space, offering numerous tax-advantaged options:
- Traditional IRA: Contributions may be tax-deductible, and investments grow tax-deferred until withdrawal in retirement.
- Roth IRA: Contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free.
- Rollover IRA: Consolidate assets from former employer-sponsored plans like 401(k)s or 403(b)s into a single IRA.
- SEP IRA: Designed for self-employed individuals and small business owners.
- SIMPLE IRA: Another retirement plan option for small businesses.
- Self-Employed 401(k): A retirement plan for self-employed individuals and small business owners, potentially allowing for higher contribution limits than SEP or SIMPLE IRAs.
- Inherited IRA/Roth IRA: For beneficiaries inheriting retirement assets.
Fidelity also provides extensive resources and guidance for managing retirement accounts and planning for the future.
Managed Accounts & Robo-Advisors
For investors seeking professional management:
- Fidelity Go®: Fidelity’s robo-advisor service. It offers automated portfolio management based on your goals and risk tolerance. There’s no advisory fee for balances under $25,000 and a flat 0.35% annual advisory fee for balances of $25,000 or more. Requires a $0 minimum to open an account but $10 to start investing.
- Fidelity Personalized Planning & Advice: A hybrid model combining digital tools with access to a team of financial advisors. Requires a $25,000 minimum investment and charges a gross advisory fee of 0.50% per year.
- Fidelity Wealth Management: Comprehensive financial planning and investment management for high-net-worth individuals, typically requiring a minimum of $250,000 in investable assets. Fees vary based on assets under management.
Education Savings
- Fidelity 529 College Savings Plan: Tax-advantaged accounts designed specifically for saving for education expenses (K-12 tuition and higher education). Investment options vary by plan.
- Custodial Accounts (UGMA/UTMA): Allows adults to manage investments for a minor until they reach the age of majority. These are taxable accounts.
Other Account Options
- Fidelity Cash Management Account: An alternative to traditional checking accounts, offering features like checkwriting, debit card access, BillPay, and FDIC insurance on cash balances (up to applicable limits), all with no account fees or minimums.
- Health Savings Account (HSA): A tax-advantaged account for individuals with high-deductible health plans (HDHPs) to save for healthcare expenses. Fidelity HSAs offer investment options.
Account Comparison Overview
| Account Type | Primary Use | Tax Advantage | Typical Minimum |
|---|---|---|---|
| The Fidelity Account® | General Investing | No (Taxable) | $0 |
| Traditional IRA | Retirement Savings | Tax-Deferred Growth, Possible Deduction | $0 |
| Roth IRA | Retirement Savings | Tax-Free Growth & Qualified Withdrawals | $0 |
| Fidelity Go® | Automated Investing | Depends on underlying account (e.g., IRA or taxable) | $0 ($10 to invest) |
| 529 Plan | Education Savings | Tax-Free Growth & Qualified Withdrawals (Federal) | Varies by plan ($0 for Fidelity plans) |
| Cash Management | Spending & Saving | No (Interest is taxable) | $0 |
| HSA | Healthcare Savings/Investing | Triple Tax Advantage (Contributions, Growth, Withdrawals for qualified expenses) | $0 |
Fidelity’s Investment Offerings: A Diverse Menu
Fidelity provides access to a vast universe of investment products, ensuring investors can build well-diversified portfolios aligned with their strategies.
- Stocks: Buy and sell stocks listed on major U.S. exchanges. International stock trading is also available in numerous markets (though often with higher fees).
- ETFs (Exchange-Traded Funds): A wide selection of ETFs from Fidelity and other leading providers, covering various asset classes, sectors, and strategies.
- Mutual Funds: Access to thousands of mutual funds, including Fidelity’s own highly-regarded family of funds. This includes actively managed funds and index funds. Notably, Fidelity offers several ZERO expense ratio index mutual funds.
- Bonds and Fixed Income: Invest in individual bonds (corporate, municipal, Treasury) or bond funds and ETFs.
- Options: Trade options contracts, available for approved accounts. Fidelity offers multiple levels of options trading permissions based on experience and risk tolerance.
- Fractional Shares (Stocks & ETFs): Fidelity’s “Stocks by the Slice” allows investors to buy and sell fractional shares of thousands of U.S. stocks and ETFs for as little as $1. This lowers the barrier to entry for owning shares of high-priced companies.
- Certificates of Deposit (CDs): Access to brokered CDs from various banks.
- Precious Metals: While not directly offered for physical holding in brokerage accounts, investors can gain exposure through ETFs or mutual funds focused on precious metals.
- Cryptocurrency: Fidelity Digital Assets® offers custody and trading services for institutional investors. For retail investors, access is currently limited, primarily through specific crypto-focused ETFs or mutual funds where available, or via the Fidelity Crypto® account (available in certain states) which allows direct trading of Bitcoin and Ethereum.
Dissecting Fidelity’s Fees and Commissions
Cost is a critical factor when choosing a broker. Fidelity has embraced the trend towards lower fees, making it an attractive option for cost-conscious investors.
Trading Commissions
- Online U.S. Stock, ETF, and Options Trades: $0 commission. This is a major advantage and aligns Fidelity with other large discount brokers.
- Options Contract Fee: While the commission is $0, there is a standard per-contract fee of $0.65.
- Broker-Assisted Trades: Placing trades via a Fidelity representative typically incurs a fee (e.g., $32.95 per trade).
- International Stock Trades: Commissions and fees apply and vary depending on the market.
Mutual Fund Fees
- Fidelity Funds: Many Fidelity mutual funds can be bought and sold with no transaction fee directly through Fidelity.
- FundsNetwork® Transaction Fee Funds: Fees may apply when buying certain non-Fidelity funds that participate in the FundsNetwork program.
- FundsNetwork® No Transaction Fee (NTF) Funds: Thousands of non-Fidelity funds are available with no transaction fee. However, short-term trading fees may apply if held for less than a specified period (often 60 days).
- Expense Ratios: All mutual funds and ETFs charge an annual operating expense ratio, which is deducted from the fund’s assets. Fidelity offers its own funds with very competitive expense ratios, including the notable Fidelity ZERO Total Market Index Fund (FZROX), Fidelity ZERO Large Cap Index Fund (FNILX), Fidelity ZERO Extended Market Index Fund (FZIPX), and Fidelity ZERO International Index Fund (FZILX), which have 0% expense ratios.
- Loads: Fidelity generally focuses on no-load funds, but some funds available on the platform may carry sales charges (loads).
Account Fees
Fidelity stands out for its lack of many common account fees:
- Account Maintenance Fees: Generally $0 for retail brokerage and retirement accounts.
- Low Balance Fees: No fees for low balances in standard accounts.
- Account Transfer (Outgoing): Fidelity does not charge a fee to transfer assets out to another institution (ACATS transfer), which is a significant customer-friendly policy compared to many competitors who charge $50-$100.
- Account Closure Fees: No fees to close an account.
Other Potential Fees
- Wire Transfers: Fees typically apply for outgoing wire transfers. Incoming wires are usually free.
- Paper Statements/Confirms: Fees may apply if you opt for paper delivery instead of electronic.
- Margin Rates: If borrowing on margin, interest charges apply based on the debit balance and prevailing rates. Fidelity’s margin rates are generally competitive, particularly for larger balances.
- Managed Account Fees: As mentioned earlier, Fidelity Go®, Personalized Planning & Advice, and Wealth Management services have advisory fees based on assets under management.
Fee Summary Table
| Fee Category | Typical Fidelity Cost | Notes |
|---|---|---|
| Online US Stock/ETF Trades | $0 | Commission-free |
| Options Trades | $0 commission + $0.65/contract | Standard contract fee applies |
| Mutual Fund Transaction Fees (Fidelity Funds) | $0 | For online trades via Fidelity |
| Mutual Fund Transaction Fees (NTF Funds) | $0 | Short-term trading fees may apply |
| Account Maintenance Fee | $0 | For most retail accounts |
| Outgoing ACATS Transfer | $0 | Customer-friendly policy |
| Fidelity Go® Advisory Fee | $0 ($25k) | Annual fee on managed assets |
| Expense Ratios (Funds/ETFs) | Varies (includes 0% options) | Charged by the fund, not directly by Fidelity |
Fidelity’s Trading Platforms and Tools
Fidelity offers a suite of platforms and tools designed for different types of investors:
- Fidelity.com: The main website is robust and comprehensive, suitable for most investors. It provides account access, trading capabilities, extensive research, planning tools, and educational content. The sheer volume of information can sometimes feel overwhelming for absolute beginners, but it’s generally well-organized.
- Active Trader Pro®: A downloadable desktop platform designed for active traders. It offers customizable layouts, advanced charting, real-time data streaming, multi-leg options trading tools, and sophisticated order types. It’s available free for customers meeting certain criteria (e.g., based on trading activity or assets).
- Fidelity Mobile App: A well-rated mobile app available for iOS and Android. It allows users to monitor accounts, place trades (including fractional shares), deposit checks, access research, and manage watchlists on the go.
- Research and Education: This is a significant strength for Fidelity. They provide proprietary research alongside reports from numerous third-party providers (like Argus, Refinitiv, McLean). Educational resources include articles, webinars, videos, and courses covering various investing and financial planning topics. Their investment analysis tools, like stock screeners and portfolio analysis features, are powerful.
Customer Service and Support
Fidelity generally receives high marks for customer service. They offer multiple channels for support:
- Phone Support: 24/7 phone support is available for general inquiries and trading assistance.
- Online Chat: Secure chat with representatives is available through the website.
- Email Support: Secure messaging options within the platform.
- Investor Centers: Fidelity maintains a network of physical branches across the U.S., offering in-person consultations and support, a benefit not provided by all online brokers.
The availability of 24/7 support and local branches provides peace of mind and accessibility for many investors.
Pros of Investing with Fidelity
- Low Costs: $0 commissions for online U.S. stock, ETF, and options trades, plus access to ZERO expense ratio index funds. No common account fees.
- Wide Range of Accounts: Extensive selection covering brokerage, retirement, education, managed, and cash management needs.
- Diverse Investment Selection: Access to stocks, ETFs, bonds, options, thousands of mutual funds (including top performers), fractional shares, and international markets.
- Robust Platforms and Tools: Powerful website, dedicated active trader platform, highly-rated mobile app, and excellent research resources.
- Strong Customer Support: 24/7 phone support, online chat, and a network of physical branches.
- Reputable and Established: Decades of experience and a strong reputation in the financial services industry.
- Fractional Shares: Makes investing in high-priced stocks more accessible.
- Excellent Retirement Services: Strong focus on retirement planning tools, resources, and account options like IRAs and 401(k) rollovers.
Cons of Investing with Fidelity
- Platform Complexity: The website’s wealth of information can be initially intimidating for new investors.
- Cash Sweep Yields: Interest rates paid on uninvested cash in brokerage accounts may be lower than some online high-yield savings accounts or specific competitor offerings.
- Fees for Some Services: While core trading is free, fees apply for broker-assisted trades and some non-core services like wire transfers.
- International Trading Costs: Fees and commissions for trading directly on international exchanges can be higher than domestic trades.
Who is Fidelity Best For?
Fidelity is a versatile broker suitable for a wide range of investors in the United States:
- Beginner Investors: Attracted by $0 minimums, fractional shares, educational resources, and access to ZERO expense ratio funds. The platform might require a slight learning curve.
- Retirement Savers: Excellent choice due to the variety of IRA options, rollover support, planning tools, and low-cost fund choices.
- Cost-Conscious Investors: Benefit from $0 commissions and the absence of many typical account fees.
- Mutual Fund and ETF Investors: Gain access to a vast selection, including Fidelity’s own highly-rated and low-cost funds.
- Active Traders: Can utilize the robust Active Trader Pro platform and competitive options pricing (though other platforms might specialize even more heavily in derivatives).
- Investors Seeking Research: Fidelity provides some of the best research and analysis tools available from a major broker.
- Investors Wanting In-Person Support: The branch network is a key differentiator from online-only brokers.
Final Thoughts
Fidelity Investments offers a compelling package for nearly every type of investor. Its commitment to $0 commissions on core trades, the elimination of common account fees, and the introduction of ZERO expense ratio index funds make it an industry leader in value. Coupled with a massive selection of account types, diverse investment products, top-tier research, powerful trading platforms, and strong customer support (including physical branches), Fidelity presents a well-rounded and highly competitive offering.
While the sheer breadth of its platform might seem daunting initially for absolute novices, the available resources and support can help overcome this. The strengths, particularly in retirement services and low-cost investing options, far outweigh the minor drawbacks for most users. If you are seeking a reliable, full-service brokerage firm with a strong track record and a focus on providing value, conducting a thorough Fidelity Investments Review through resources like FINRA’s BrokerCheck alongside this overview confirms its status as a top contender worthy of strong consideration for your investment needs.
