Tag: Fidelity

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Investing, Reviews

Fidelity Investment Review: One of the Biggest Names in Investing – But is it Right for You?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Fidelity Investment Review

Fidelity Investments is one of the largest investment companies in the world and known for its comprehensive brokerage service. Fidelity aims to be your one-stop shop for all financial services and provides a plethora of investment products, including mutual funds, retirement accounts, stocks, exchange traded funds (ETFs), bonds, 529 plans, and more.

In this review, we’re going to cover Fidelity and what it offers you, the investor.

You’ll learn about:

  • How Fidelity investment works
  • How much Fidelity costs
  • The fine print
  • Pros and cons
  • How Fidelity stacks up against the competition

Getting Set Up and Transferring Accounts

Opening a new account with Fidelity is designed to be a quick and efficient process. The process can be completed online, and it takes only a few minutes to fill out your basic information, assign a beneficiary, and set up ACH information to transfer money to and from your bank.

After everything is set up, you’ll be able to easily make deposits and trades.

If you need to transfer a brokerage account or roll over an existing IRA, or need another type of account, you can also set up everything online. You can speak with a customer service representative if you need additional assistance. The transfer process should take about a week on average if you are prompt about submitting all your documents and information.

Fidelity currently has an offer in which new customers who roll over their IRA to Fidelity can receive up to a 10% match. The match starts at 1% for transfers ranging from $10,000 to $49,000 and goes up from there.

Costs and Other Fees

There is a minimum deposit of $2,500 to open a brokerage account with Fidelity. There is no minimum deposit requirement for IRA rollovers. To open a Roth or traditional IRA, customers must either meet the minimum deposit requirement of $2,500 or set up monthly recurring deposits for a minimum of $200.

Options trades are $7.95 per trade plus $0.75 per contract.

Commissions for stock trades are $7.95 per trade (with unlimited shares and unlimited trades) and $32.95 for broker-assisted stocks and ETFs. Fidelity has more than 85 commission-free ETFs.

Fidelity also has more than 10,000 mutual funds. NTF (no transaction fee) non-Fidelity funds are $0 on purchase and $49.95 upon redemption (if held for less than 60 days). Some non-Fidelity funds come with transaction fees of $49.95 per purchase and $0 upon redemption. The mutual fund annual low-balance fee is $12 per fund if your mutual fund balance falls below $2,000.

Fine Print

Fidelity’s costs and fees are pretty clear and easy to find on its website, but it’s important to read the fine print and understand some of the firm’s specific rules and requirements.

For example, there is a $100 fee per stock certificate transfer and shipping. While there is no annual fee or inactivity fee, there is a $50 fee for closing your account.

There are also trading platform restrictions to consider. Fidelity has a few trading platforms and tools that may restrict some customers. For their Active Trader Pro platforms, customers need to trade at least 36 times in a 12-month period. There are other advanced tools on that platform, such as Recognia, which is only available to traders who place at least 120 trades per year.

Investors interested in online trading have quite a few options with Fidelity, but they need to make sure they fully understand the requirements and restrictions so they can optimize the platform they choose.

Fidelity Mobile

Like other online investment brokers, Fidelity has a mobile trading app that allows you to connect your mobile devices. With the mobile platform you can monitor and manage your portfolio on the go, manage your workplace accounts, trade, contribute to your IRA, and more.

Pros and Cons

Pro: Affordable trades. Even though they aren’t the lowest prices, Fidelity offers affordable pricing on trades.

Cons: Requirements and restrictions for traders. If you don’t trade often, you may not find Fidelity’s advanced platforms like Active Trader Pro (that requires you to make 36+ trades per year) useful.

Pro: Mobile platform. The mobile platform is convenient and allows you to manage your account on the go.

Cons: Investment minimum. Fidelity’s $2,500 minimum investment for a brokerage account is higher than other competitors, making it more difficult for investors to get started if they don’t have a lot of money.

Pro: Commission-free ETFs. Many of Fidelity’s funds are commission-free, and it has a wide variety of more than 85 ETFs. On the other hand, commissions are high ($49.95-$75) to purchase other non-Fidelity mutual funds.

Con: Annual fee. Customers who aren’t as active need to make sure their mutual fund balance doesn’t fall below $2,000 or they’ll be subjected to a $12 low-balance fee. It’s not much, but it can be avoided.

Pro: Great customer service. Fidelity has scored great reviews regarding their customer service, which is important to customers who have questions or may need support in the future. Fidelity offers phone support 24/7, a live chat feature, email support, and more than 180 branches. Customers who qualify for Fidelity’s Active Trader Services also get 24/7 support from trading specialists.

Other Online Investment Brokers

Scottrade

Scottrade is another online investment broker with more than 500 local branches. They offer services similar to Fidelity, except they charge a flat fee of $7 per trade, which is lower than Fidelity’s $7.95 per trade. If you place a trade through a broker, the commission is a flat $32. The opening minimum investment is the same as Fidelity at $2,500, and the minimum opening balance for a retirement account is $500.

Scottrade doesn’t charge for streaming quotes, and they offer more than 14,500 mutual fund options – 3,000 of which do not carry a transaction fee. Gaining access to Scottrade’s advanced platform (ScottradeELITE) requires meeting some steep requirements. For example, investors must have a $25,000 account balance or more than 9 stock/option trades during the previous three months.

TradeKing

TradeKing is another low-cost broker that provides flexible investment opportunities to customers. It offers $4.95 commission stock trades and $0.65 per contract. TradeKing also offers Forex trading, along with a $50,000 virtual account that lets you try it out before you take the reins on your own.

The best thing about TradeKing is that there is no minimum amount to open an account. On the other hand, the service charges an annual inactivity fee of $50 if your account is left dormant and no trades have been made for 12 months, and the combined value of your household accounts is less than $2,500. Both criteria need to be met in order for TradeKing to apply the $50 annual fee, but it is something to watch out for.

Vanguard

Vanguard is a leading provider of mutual funds and ETFs that are high-quality and low-cost. There are no commissions when you buy and sell low-cost Vanguard mutual funds and ETFs. However, if you buy and sell the same Vanguard ETF in a Vanguard Brokerage Account more than 25 times in a 12-month period, you may be restricted from purchasing that particular ETF for the next 60 days.

To open an IRA with Vanguard or roll over an existing IRA, the minimum deposit requirement is $1,000.

Vanguard’s Standard account, which is available to those with less than $50,000 in Vanguard accounts, charges $7 for the first 25 trades and $20 for subsequent trades. You need to have $50,000 to $500,000 in your Vanguard accounts in order to take advantage of unlimited trading.

Low-cost Online Investment Platforms

If you’re a novice investor looking for a way to experiment at a low cost, check out our review of low-cost and free investing platforms.

Who Fidelity Investments Is Best For

Fidelity is a top contender for online brokerage services. It’s a great option for more advanced traders who can take advantage of Fidelity’s platforms like Active Trader Pro, along with beginners, who will be able to rely on Fidelity’s quality and dependable customer service.

The retirement account matching program is an added perk if you choose to roll over your IRA.

If the minimum investment of $2,500 is doable for you and you prefer a large range of investment options and affordable trading fees, Fidelity is certainly worth looking into further.

 

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Chonce Maddox
Chonce Maddox |

Chonce Maddox is a writer at MagnifyMoney. You can email Chonce at chonce@magnifymoney.com

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Earning Cashback

Fidelity Rewards Visa Signature Credit Card: Are there easier 2% cash back options?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Fidelity® Rewards Visa Signature® Card

Banks are able to give customers credit card rewards thanks to interchange fees. Typically, banks charge merchants a two percent interchange fee for the convenience of swiping a credit card. Then the banks incentivize customers to apply for and use a card by offering some of that interchange fee in the form of a reward.

Knowing this, we often caution people to be wary of cash back rewards over two percent. So when you see a deal for 5% cash back – your bogus radar should go off. Sure, you might receive 5% for a quarter, but there is often lots of red tape, earning limits and categories that don’t even apply to your spending habits. If you aren’t doing home improvement work, how often are you really going to Home Depot?

How it works

The Fidelity Rewards Signature Visa offers 2% cash back on all purchases with no limits and no annual fee anywhere Visa is accepted (which includes Costco).

But there is a catch: you have to have a Fidelity account if you want the full 2% back.

The cash back goes into an eligible Fidelity account, which could be a brokerage account, a cash management account, a retirement account or a Fidelity-managed 529 account, and you can set up the account to automatically deposit the rewards each month you reach 5,000 points worth of rewards (the minimum you can redeem).

Any other way of using your rewards like statement credit, gift cards, or travel won’t guarantee you the full 2% rewards rate that depositing rewards into your Fidelity account offers.

The good news is you don’t need any money at all to open the account. Fidelity’s ‘cash management‘ account is basically a no fee checking account where your cash back rewards can be deposited, though you’ll get better rates from a good online savings account.

How it stacks up

Citi® Double Cash Card – 18 month BT offer

The Fidelity Card receives the highest amount of cash back available without strings and rotating categories. The only other card currently offering similar cash back is the Citi Double Cash Card, though if you have heavy spending in certain categories there are other rewards cards that can earn you more.

People have various strategies for their credit cards, so see if your style is below and whether this card is right for you.

  • One is enough: If you’re overwhelmed at the prospect of having too many credit cards in your wallet, then this credit card is hard to be beat. You won’t consistently earn higher than 2% cash back with any other card.
  • Bonus game: If you’re a rewards seeker dedicated to finding the best sign-on bonus, then this card is going to disappoint you. There is no bonus to sign up, though a prior version of the card that was an American Express offered $50 if you spend $500 in the first 60 days.
  • Bring on the categories: Some people actually like gaming the category system to maximize their spending habits. Perhaps you carry one card for gas, another for groceries and a third for travel. Odds are all these cards only get 1% cash back in non-category spending, so you might as well add Fidelity Investment Rewards to your line-up for all other purchases.

When Fidelity would lose to Citi Double Cash back:

  • You have to have a Fidelity account for 2%: This may be a deal breaker for some people who don’t want to take the time to set up a new account. You could simply set up a cash management account and then consistently transfer your cash back over to another bank account, but that also takes an extra step.
  • This is managed by US Bank: While Apple Pay and other modern features are available, US Bank isn’t known for having the best online interface for customers. Citi isn’t perfect either, but If all you want is 2% back and have no loyalty to Fidelity, you might prefer the Citi website and Citi Double Cash.
  • Stricter approval: Fidelity has historically considered total assets under management in their underwriting, so if you’re not already a Fidelity customer, you may not see the same credit line you could receive from Citi. Additionally, US Bank pulls your scores from two lesser known credit bureaus (SageStream, formerly known as IDA, and Advance Resolution Services, “ARS”) which may have a different history for you than the major bureaus. Citi typically uses one of the major bureaus that’s easy to keep track of. Our sense is you’ll  likely be rejected with a credit score under 700, but you could have a chance with Citi.

When Fidelity beats Citi Double Cash:

  • Costco acceptance: If you’re a Costco member, the Fidelity card is a Visa, which is the official payment at Costco as of April, 2016. This is one of the best choices if you’re a Costco shopper looking for rewards.
  • Automatic redemption: You can link your Fidelity account so that every month that you rewards balance reaches 5,000 points or more ($50 in rewards), the rewards are automatically deposited.

Fine Print

As with all financial products, you need to pay close attention to the fine print. We do like that this card offers 2% cash back with no hoops to jump through and no rotating categories. There is also no annual fee and foreign transactions have a 1% fee.

However, there are a few things to look out for.

  1. You have to be a Fidelity customer or open a Fidelity account in order to be eligible for this card.
  2. The interest rate for cash advances is much higher than that for purchases, but you really shouldn’t be using this card if you’re carrying a balance
  3. Your credit line might be based in part on investable assets – so if you don’t have anything invested with Fidelity, you may receive a lower credit line.
  4. Don’t expect 2% forever: Fidelity is committed for now to 2% based on its recent switch from American Express to Visa, but we wouldn’t be surprised if in a few years the cash back level is reduced or just reduced for those without assets under management. But right now, it’s a good deal. You can always search for another 2% cash back card, if and when Fidelity changes the rules.

In conclusion

We’re fans of this card for offering 2% cash back, but it may not be the best fit for you unless you’re an existing Fidelity customer. Those with 401(k)s, IRAs or other accounts already linked to Fidelity could help fund their futures with this cash back card.

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on Fidelity’s secure website

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Bargains and Deals, Fine Print Alert, News

Is the Fidelity IRA Match a Gimmick? There Are Better Deals

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Fidelity just announced a novel way to attract your IRA retirement money: a match on your contributions for three years if you roll over money to Fidelity from a competitor.

But is it Fidelity IRA match the best deal for rolling over your money?

Here’s how it works

When you roll over money from a non-Fidelity IRA account, you’ll get a match on all of your new contributions for the next three years if you use this link to handle the rollover.

There are five tiers of matching:

  • 1% for rollovers of $10,000
  • 1.5% for rollovers of $50,000
  • 2.5% for rollovers of $100,000
  • 5% for rollovers of $250,000
  • 10% for rollovers of $500,000

You can contribute up to $5,500 to an IRA each year ($6,500 if you’re over age 50) and you can earn up to $1,950 in matching over the 3 years.

Here’s an example:

Let’s say you have $100,000 sitting in an IRA and you roll it over to Fidelity.

Then you contribute as follows, earning the 2.5% match on the contributions because you rolled over $100,000.

  • Year 1: Contribute $5,500, get a $138 match
  • Year 2: Contribute $4,000, get a $100 match
  • Year 3: Contribute $5,000, get a $125 match

That’s $363 in extra money Fidelity is adding to your account.

There may be better deals

Unless you’re doing a really large rollover for the bigger matches, you might earn more with a simple one time bonus.

For example, Fidelity itself has these lucrative one time bonuses via a different promotion:

$200 for rollovers of $50,000 – $99,999

On a rollover of $50,000, you’d earn only $165 from the ‘match’ bonus if you contribute $5,500 each year

$300 for rollovers of $100,000 – $249,999

On a rollover of $100,000 you’d earn $248 from the ‘match’ bonus if you contribute $5,500 each year

$600 for rollovers of $250,000 – $499,000

On a rollover of $250,000 you’d earn $825 from the ‘match’ bonus if you contribute $5,500 each year

$1,200 for rollovers of $500,000 – $999,000

On a rollover of $500,000 you’d earn $1,650 from the ‘match’ bonus if you contribute $5,500 each year

$2,500 for rollovers of $1,000,000

On a rollover of $1,000,000 you’d earn $1,650 from the ‘match’ bonus if you contribute $5,500 each year

Other major brokers like Schwab, Ameritrade, and ETrade offer similar one time deals.

And if you are a die hard maximizer, you could rollover your money each year to a new broker and collect bonuses each time. That would earn you substantially more than the Fidelity ‘match’ bonus could over 3 years.

But all in, while the idea of rewarding new contributions to your IRA each year is a great one as it reinforces good behavior, the actual rewards are sub-par in many cases. Do a little math first to make sure you’re not short changed.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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