Opening account at Fidelity for foreign residents, E.U. and non-U.S. citizens. Can international investors sign up with Fidelity without SSN?

If you are a foreign investor outside the U.S. who wants to take advantage of Fidelity’s services, you are out of luck because the broker is currently only available to those residing in the U.S. There is, however, a broker that offers discounted trading and is open to most foreign investors - ZacksTrade.

ZacksTrade Website

Open ZacksTrade Account

Who Qualifies for a Fidelity Account?

On their website, Fidelity indicates that you must have a valid Social Security Number (SSN) in order to open an account (Taxpayer Identification Numbers are not sufficient). This means that you must be a U.S. citizen or permanent resident with a legal address within the 50 U.S. States or Puerto Rico. The only way for a non-US citizen to get an SSN, and therefore be able to open a Fidelity account, would be if you have a valid U.S. visa.

What Are the Alternatives to Fidelity?

ZacksTrade offers investment accounts to residents of most countries. Requirements for opening account outside of the U.S. are fairly close to those in the U.S., and generally documentation for Proof of Address and Proof of Identity is required.

Buying or selling stocks and ETFs at ZacksTrade will cost you $0.01 per share with a $1 minimum per trade. Penny stocks (defined as anything trading below $1 per share) have a commission equal to 1% of the total trade value or $3, whichever is greater. This structure will work to your advantage if you have a smaller account or are trading high-priced stocks, but could be more expensive if you are a big penny stock investor. Mutual fund commissions are a flat $27.50 per trade.

Options

ZacksTrade charges $1 for the first contract of an options trade, and $0.75 for each additional contract. Surprisingly, they do not charge any fees for exercising options.

Bonds

If you want to trade fixed income securities in your ZacksTrade account, corporate and municipal bonds will cost you 0.10% of the face value plus $3 per bond if the face value is under $10,000. For trades where the face value is greater than $10,000, you will pay 0.025% of the face value plus $3 per bond. Treasury Bonds follow a similar commission structure where it’s 0.025% of the face value plus $3 per bond for trades under $1 million and 0.005% of face value plus $3 per bond for trades greater than $1 million in face value. Broker-assisted trades do not have any additional fees at Zacks.

Data Subscription Fees

One drawback that isolates ZacksTrade from most of the competition is that they charge you for data packages unless you are a frequent trader. Real-time U.S. stock and futures data costs $10 per month unless you trade at least $30 in commission per month. NYSE and Nasdaq data costs anywhere from $1 to $25 per month, depending on the data package. Data packages for foreign exchanges also have a monthly fee, but luckily bond data is free.

ZacksTrade Margin Rates

Debit Balance Margin Rate
$0 - $100,000 3.55%
$100,001 - $1,000,000 3.05%
$1,000,001 - $3,000,000 2.75%
$3,000,001+ 2.75%

If you like to use margin in your investment account, ZacksTrade offers relatively low margin rates. Their highest margin rate is currently 5.7%, which is for those borrowing $100,000 or less. Their margin rate drops down to 4.3% as the amount borrowed increases to $3million.

Withdrawal and Transfer Fees (ACH, Wire, Physical Check, ACAT)

Another charge that was surprising to us is that they only allow you one free ACH transfer per month, with each additional one costing $1. Almost all brokers offer free, unlimited ACH transfers, so this fee at ZacksTrade is disappointing. Withdrawing money by wire transfer will cost you $10, but there is no charge for incoming ACH or wire transfers. Withdrawal by physical check will incur a $4 processing fee. On the plus side, ZacksTrade doesn’t charge any ACAT fees for partial or full incoming or outgoing account transfers.

Account Minimums and Maintenance Fees

ZacksTrade doesn’t charge any maintenance or inactivity fees, however they do have a minimum required balance of $2,500 to open an account.

Regulatory and Clearing Fees

Just as with any broker, ZacksTrade will pass on to you any applicable regulatory and clearing fees that are incurred by trading in your account. These fees are unavoidable since they originate from regulating agencies, but they are pretty small, averaging a few pennies per trade for stocks, and a bit more for options and futures.


ZacksTrade

ADR Fees

Most ADRs incur fees from the custodian bank that holds and maintains the underlying entity’s shares on behalf of the ADR investors. These annual fees are generally between $0.01 and $0.03 per share and ZacksTrade will pass these on to you as soon as they are charged.

Other Less Common Fees

ZacksTrade also has some other unique fees that would only apply to a minority of traders. One such fee is an exposure fee for high risk accounts. ZacksTrade doesn’t say exactly how much this fee is or what their definition of a high risk account is but only that it applies to a small minority of their customer accounts and is determined based on those that hold an unusually large amount of risky positions (i.e. high short options exposure for example). The fee is in addition to any margin requirements, but can be avoided by adding more capital to your margin account.

ZacksTrade Fees Summary

ZacksTrade is an interesting broker from a fees perspective because they charge fees for a lot of things that are free at most other brokers (i.e. ACH withdrawals, real-time data) but at the same time they don’t charge fees for other actions that most other brokers would charge for (i.e. outgoing ACAT transfers). This is why understanding the different fees is particularly important when opening a ZacksTrade account.

Fidelity For Foreign Citizens Summary

In conclusion, if you are a non-US investor (and don’t hold a U.S. visa) you cannot currently open an account with Fidelity. ZacksTrade is a popular U.S. broker with great tools that offers international accounts to citizens of most countries.

ZacksTrade Website

Open ZacksTrade Account



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