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Updated on Thursday, January 14, 2021
The Fidelity Account is a low-cost brokerage account offered by Fidelity Investments that allows investors to trade U.S. stocks, exchange-traded funds (ETFs) and options online with $0 commission fees. Fractional share trading is also available through the Fidelity mobile app.
The account is a standout for its fee structure and range of investment choices. Broker-assisted trades are pricey, but otherwise, there are few downsides. This Fidelity review is designed to help you decide if it’s the right brokerage for you.
|Sign-up bonus||None currently available|
- What Fidelity offers and who it’s for
- Fidelity fees and costs
- Fidelity investing tools and research
- Fidelity user experience
- Fidelity investor education
- Fidelity security
- Alternatives to Fidelity to consider
What Fidelity offers and who it’s for
Fidelity is a full-service online brokerage that offers an extensive range of investment Options, including stocks, Mutual funds, ETFs, Options and precious metals. Both beginning and more experienced investors may find Fidelity‘s low trading costs an attractive incentive for opening an individual or joint brokerage account. You also may choose to invest in an IRA or Solo (401)k through Fidelity to save for your retirement.
Fractional share trading is something else that sets Fidelity apart, as not all online brokerages offer this option. In terms of where Fidelity tends to fall short, cryptocurrency and futures trading aren’t included in the list of investment Options. And if you need a broker’s help to execute a trade, that means paying an added fee.
- Wide range of investment choices: Fidelity makes it relatively simple to build a diversified portfolio with its range of investment Options, which includes both Fidelity and non-Fidelity funds.
- Low-cost trading: Like a number of online brokerages, Fidelity has adopted a $0 commission fee model for online trades of U.S. stocks, ETFs and Options.
- No account minimum: While some brokerages require a larger minimum deposit to open an account, Fidelity allows you to get started with a $0 minimum.
- Extensive research tools: Fidelity is generous when it comes to providing investors with the research and analytical tools they need to make investment decisions.
- Broker-assisted trades will cost you: Getting broker assistance in executing a trade will require paying an additional fee.
- No crypto or futures: Investors who are interested in trading cryptocurrency or futures will need to look elsewhere.
- High mutual fund fees: Investing in non-Fidelity funds could trigger a steep trading fee.
- Holding period for initial withdrawals: While you can open and fund an account with Fidelity online in minutes, it can take up to 10 business days to verify banking information for withdrawals from your account.
Fidelity fees and costs
|Option trading fees||$0 + $0.65 per contract for online trades; $12.95 + $0.65 per contract for FAST trades (by phone); $32.95 + $0.65 per contract for broker-assisted trades|
|Stock trading fees||$0 for online trades of U.S. stocks; $12.95 for FAST trades (by phone); $32.95 for broker-assisted trades|
|ETF trading fees||$0 for online trades of U.S. stocks; $12.95 for FAST trades (by phone); $32.95 for broker-assisted trades|
|Mutual fund trading fees||$0 for Fidelity funds; $0 on purchase and $49.95 on redemption for no transaction fee non-Fidelity funds held less than 60 days; $49.95 per purchase and $0 at redemption for transaction fee non-Fidelity funds|
|Bond and CD trading fees||$0 for new issues, $1 per bond for secondary issues; $0 for online U.S. Treasury auctions and secondary issues; $19.95 for representative-assisted U.S. Treasury auctions and secondary issues|
|Account fees (annual, transfer, inactivity)||No annual fee, no transfer fees and no inactivity fees; only additional fees may be:|
Fidelity has followed the example of other online brokerages and moved toward commission-free trading for U.S. stocks, ETFs and Options when trading online. You can also trade Fidelity‘s impressive collection of Mutual funds with $0 commission fees.
You will, however, run into fees if you want to trade non-Fidelity funds. Again, you’ll pay $0 on purchase for no transaction fee funds from issuers other than Fidelity and $49.95 at redemption for funds held less than 60 days. Transaction fee non-Fidelity funds require a $49.95 fee per purchase but charge $0 on redemption.
Fidelity investing tools and research
Online trading tools
Fidelity‘s online trading platform includes monitoring tools to help investors:
- Track stock price movements and profit/loss positions in real time
- Research specific market sectors
- Execute trades
- Research individual securities
- Read the latest market news
- Chart their comprehensive financial picture
Investors have access to an ETF screener that allows them to compare more than 2,000 commission-free ETFs, along with mutual fund, stock and bond screeners. Fidelity aggregates investment news and reports from a variety of well-known sources, including Reuters, Zacks Investment Research and Argus Analyst.
Mobile trading tools
The Fidelity mobile app allows investors to track their portfolio on the go. The app, which is free to download for iPhone and Android, makes it easy to:
- Manage your portfolio and watch lists
- Execute trades
- Invest with fractional shares
- View balances and get real-time quotes
- Set up account alerts and notifications
- Save articles and take notes
The most notable feature of the Fidelity mobile app is the ability to trade fractional shares. Through fractional share investing, you can purchase more expensive stocks in smaller increments. With dollar-based investing from Fidelity, you can trade shares of more than 7,000 U.S. stocks and ETFs for as little as $1. That could be appealing to newer investors who are just getting started and don’t have a lot of money to put into the market.
Active Trader Pro
Active Trader Pro is Fidelity‘s dynamic online trading platform. To use Active Trader Pro, you have to request access through Fidelity. You may access this feature automatically if you trade 36 times or more in a rolling 12-month period. If you’re approved for Active Trader Pro, it’s free to use.
Once you download Active Trader Pro for PC or Mac, you’ll have access to tools and research that allow you to take an even deeper dive into trading. For example, the Trade Armor feature allows you to visualize risk and reward for a particular investment while tracking price movements. Real-time analytics make it easy to track technical indicators for stocks to identify trading opportunities.
As the name suggests, Active Trader Pro is designed for investors who take a more active approach to portfolio management. While it’s accessible for active Fidelity investors of any skill level, it may be a little overwhelming for a beginner.
Fidelity user experience
Between online and mobile investing, Fidelity makes investor accounts easily accessible. If you’re unfamiliar with the Fidelity website and its layout, however, you could get lost when moving between different pages. The mobile app, on the other hand, is easier to navigate as you move through different screens and tabs.
In terms of customer service, Fidelity offers support by phone, live chat and secure messaging. Phone support is available 24/7 by calling 800-343-3548. You can also use live chat to connect with Fidelity Support, but it may take time to be connected to a representative. During one attempt, we were put in the queue at number 24 in line.
We also called customer support, which responded promptly with a hold time of less than a minute. Likely, this will all depend on the volume of calls at the time of your attempt. The customer service representative we spoke with on the phone was knowledgeable and able to answer all of our questions, which included requesting information on minimum deposits and how to withdraw money from a brokerage account.
Fidelity investor education
The Fidelity Learning Center offers numerous educational resources to help investors shape their portfolio strategy. The educational tools on hand include:
- Live webinars
- On-demand webinars
- Weekly Fidelity classes for beginning investors
- Interactive coaching sessions
- Investment guides
While some online brokerages take a bare-bones approach to investor education, Fidelity equips you with plenty of tools to make informed decisions. These tools are free to access as a Fidelity customer, which is great if you don’t have a dedicated financial advisor yet because you’re unable or unwilling to pay a fee for professional investment advice.
The Securities Investor Protection Corporation (SIPC) insures against financial losses if a brokerage goes bankrupt. All Fidelity brokerage accounts have SIPC coverage, which extends to money market funds as well as other securities. The coverage limit is up to $500,000, including a $250,000 limit for cash held inside your brokerage account.
Fidelity uses a number of strategies to protect client accounts online. That includes the use of two-factor authentication to verify accounts, the ability to lock accounts to prevent money transfers, security text alerts and voice recognition through Fidelity MyVoice when accessing your account by phone.
Customer protection guarantee
Fidelity offers a Customer Protection Guarantee to reimburse investors for losses associated with unauthorized account activity. That includes both cash and securities held in Fidelity brokerage accounts. This coverage is automatic, but to use this benefit, you must contact Fidelity at 800-544-6666 as soon as you become aware of any suspicious or unauthorized activity.
Alternatives to Fidelity to consider
Fidelity could be a good fit for investors who want to make commission-free trades, invest with fractional shares or take advantage of Fidelity‘s extensive research and investment tools. It’s important, however, to consider where other brokerages might outshine Fidelity in terms of cost, investment Options and overall user experience. Here are two other Options to compare to Fidelity when opening a brokerage account.
Fidelity vs. Vanguard
Vanguard is a well-known name in the online brokerage space, thanks largely to its suite of low-cost index funds and ETFs. In terms of fees and account minimums, Fidelity and Vanguard are almost identical, though it will cost you slightly more per Options contract with the latter.
In terms of investment offerings, they’re similar, but the main point to consider is whether you lean more toward Fidelity funds or Vanguard funds. When it comes to user experience and investment tools, Fidelity has a slight edge with Active Trader Pro. Fidelity‘s website is also easier to navigate.
Fidelity vs. TD Ameritrade
Fidelity and TD Ameritrade are neck and neck in terms of investment costs and minimums, though you will need at least $2,000 to trade on margin with TD Ameritrade. But this brokerage does offer a few things Fidelity doesn’t, including cryptocurrency and futures trading, as well as multiple online trading platforms designed to meet different investors’ needs.
One other thing worth pointing out is that TD Ameritrade‘s broker-assisted trade fee is lower than Fidelity‘s, at $25 versus $32.95. Whether it makes sense to choose Fidelity over TD Ameritrade or vice versa may ultimately come down to which brokerage’s funds you prefer.
All information included in this profile is accurate as of 1/14/2021. For more information, please consult Fidelitys’s website.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.