Fidelity brokerage firm review: rating, fees and commissions, pros and cons, minimum requirements and promotion offers for opening new online account or IRA with the top discount stock broker.


Fidelity Rating:  Fidelity Investments rating

  • Stocks & ETFs: $0
  • Options: $0 + $0.65 per contract
  • Mutual Funds: $49.95

Overview of Fidelity Investments

Fidelity clients get to trade a large suite of securities with advanced software tools. And they get low commissions and fees to boot. This article will meticulously analyze the broker in important areas and then make some comparisons to major rivals.

Range of Investment Offerings

Fidelity Investments Rating

4 stars Fidelity offers equities, options, fixed-income investments (including certificates of deposit, UIT’s, and commercial paper), exchange-traded funds, closed-end funds, mutual funds, IPO’s, and precious metals. Products that are missing on this list include futures, options on futures, warrants, forex, and contracts for difference.

Security Research and Education

Fidelity Investments Rating

5 stars On Fidelity’s website, we found a treasure trove of learning materials. An educational section called Learning Center offers a very large collection of resources in article, video, webinar, infographic, and course format. Some of the webinars are recorded, while others are upcoming. The materials cover issues such as evaluating bond prices, how to sell covered calls, and how to perform technical analysis.

Fidelity Investing review
Security profile pages at Fidelity once again provide enormous amounts of data. Stock reports from third party analysts are available free of charge. During our investigation, we found numbers on earnings, dividends, SEC filings, price performance, and much more.

Pricing

Fidelity Pricing Rating

Fidelity charges $0 for stock and ETF transactions. Option contracts are 65 cents extra. The brokerage firm does not provide any discounts for frequent traders; although it does have a list of commission-free ETF’s. Fixed-income securities are $1 each with a $250 maximum commission. Treasury securities are free to trade.

All of these trading fees assume online transactions. Placing a trade over the phone with a human rep or AI tacks on additional charges.

A brokerage account comes with no annual fee or minimum deposit amount. Many of Fidelity’s fees have been eliminated during the past year. There isn’t a low-balance, closeout, or maintenance fee of any kind. Fidelity has gone so far as to do away with its ACAT transfer fee.

Mutual funds that have a transaction fee at Fidelity are $49.95 on the buy side; they are always free to sell. For some funds, the charge is $75. The broker also has a short-term trade fee for NTF funds. The holding period is 2 months, and the fee is $49.95.

Exchange-Traded Funds

Fidelity ETF Rating

Fidelity now offers more than 500 ETF’s without any commissions. Even better, the broker does not charge short-term redemption fees on these funds. Some of the fund families include Invesco, Fidelity, iShares, SPDR, and Legg Mason. Strangely, the broker’s ETF screener doesn’t have the ability to look exclusively for commission-free products. Commission status is sortable in results, however. Some of the available search criteria include distribution yield, volatility, shares outstanding, and sector.

An ETF center on the Fidelity site displays fund commentary, a map of economic sector funds, and a heat map of volume, net flows, and price performance.

ETF profile pages deliver the same great information that other security profiles offer. A comparison chart shows basic data of a fund against similar funds. Technical events are displayed, courtesy of Recognia. Analyst ratings and reports are available, courtesy of groups like Ned Davis and Morningstar.

Mutual Funds

Fidelity Mutual Funds Rating

In addition to its commission-free ETF’s, Fidelity has 3,626 mutual funds without any trade fees. Many of these will also have no load. In total, we found 10,263 funds that were open to new investments.

The broker’s mutual fund screener provides a lot of search variables. Some of the choices include socially responsible funds, asset class, manager tenure, turnover ratio, and Morningstar ranking. One feature Fidelity needs to add to its search engine is the ability to scan for no-load funds.

Fidelity Investments review
Fidelity offers a free service called Fund Picks. These are mutual funds that are pre-screened by the company’s investment advisors for their expected outperformance relative to peers.

A great addition Fidelity has recently added to this category is index mutual funds with a 0.00% expense ratio. These include FZILX, a global fund, and FNILX, a large-cap U.S. fund. On other funds, Fidelity has lowered expense ratios below Vanguard. Furthermore, all Fidelity mutual funds now have $0 minimum investment amounts.

Customer Service

Fidelity Customer Rating

Fidelity has joined the 21st century with a robo chat service. During our testing, it was able to answer some questions, but not all. While the robo system is up 24/7, a human chat service is available more limited hours, 7 days a week. Fidelity’s website has a unique tool that allows customers and guests to share their screen with a representative.

Over the phone, the brokerage house once again has both human reps and an automated system. Both are available around the clock, which is an advantage over the company’s chat service. The Fidelity website also has an internal messaging system.

For clients traveling outside the United States, Fidelity provides a long list of local phone numbers that can be used in a wide variety of countries to contact the broker.

More than 100 Fidelity branch locations are spread across many U.S. states. For clients who don’t live near one of these locations, the broker’s website has a lot of self-help features. It’s possible to sign up for bill pay, add or delete beneficiaries, download statements, change login information, sign up for text alerts, report a security problem, and much more.

Retirement and Education Planning

Fidelity IRA Rating

Besides taxable trading accounts, Fidelity also offers education and retirement accounts. We found 529 plans and UGMA/UTMA accounts. Coverdell accounts are not available.

On the retirement side, Fidelity offers a large selection of IRA’s including Traditional, Roth, Inherited, and Rollover varieties. Small businesses can open a SIMPLE or SEP plan. Fidelity no longer charges any fee to close an IRA. Also on tap is a self-employed 401(k) plan.

Fidelity’s website hosts many good resources on retirement topics. These include calculators that are able to figure required minimum distributions (RMD’s) and Social Security payouts. As we shall see shortly, the broker-dealer also offers investment advisors who can provide retirement planning for a fee.

Banking Features

Fidelity Banking Rating

Although Fidelity doesn’t operate a bank like some other brokerage firms, it does provide really good cash management features. The company’s Cash Management Account offers checks and a debit card free of charge. This account is a hybrid brokerage-bank account; Fidelity moves cash balances to FDIC-insured banks. This policy creates additional layers of insurance. Customers who prefer to use money market mutual funds with SIPC protection can opt for one of several funds. SPRXX is one we like. It has a current yield of 2.06%.

Another great feature of the CMA is unlimited ATM fee rebates. One caveat is that only charges that are incurred inside America are eligible.

Portfolio Management

Fidelity Management Rating

Fidelity clients who don’t have the time to manage their investments can hire one of the broker’s financial pros to do all the work. The cheapest option is a robo-advisory service. Called Fidelity Go, this option costs 0.35% with no minimum deposit requirement. The service is unique in the investment world by trading mutual funds instead of ETF’s; and all of the funds have a 0.00% expense ratio.

Old school services are also available. These range from 0.60% up to 1.70%, depending on the service. There is a minimum deposit requirement of $50,000, and some packages require half a million dollars. The advantage with going with a traditional service is that individual stocks and bonds are available. A working relationship with a human advisor is also part of some packages.

Website Trading

Fidelity Trading Rating

The first piece of software Fidelity offers its clients is its website. During our investigation, we found it easy to use. Fidelity’s trade bar is a little different than other brokers’. Instead of sitting at the bottom of the website, it pops up into the left side of the screen after a buy or sell button is clicked. The tool offers market, limit, stop, and trailing orders. There are several duration choices.

Charting on the site comes with several nice tools, including 30 technical indicators, 11 drawing tools, 3 company events, and 5 display options. There is a full-screen mode, and extended-hours price action can be shown. A chart can be exported, saved, or printed.

Some of the other highlights of the website include alerts, a watch list, and several option tools. An IPO center displays upcoming new offerings with links to participate. Full View is a platform that links non-Fidelity accounts to the Fidelity platform; it displays balances and transactions. There is no charge for the service.

Fidelity IPO

Mobile Platform

Fidelity App Rating

Fidelity clients can buy and sell securities (and do a lot more) on a mobile platform that’s compatible with Android, Kindle Fire, and Apple devices. Touch ID and Face ID are enabled for Apple devices.

During our research, we found multiple watch lists, the day’s market movers (top gainers, top losers, and most actives), data on sector performance, and information on what Fidelity customers are buying (and selling). Alerts can be set up on the app, and we especially liked on-demand videos courtesy of Bloomberg. Live streaming of Bloomberg is also available.

Fidelity App review
Charting on the app offers multiple graph styles, several technical indicators, comparisons, logarithmic and linear axes, horizontal viewing, and extended-hours price action. Up to five years of price data can be shown.

The app’s trading ticket offers limit, market, trailing, and stop orders. Duration choices include fill or kill, immediate or cancel, and on the open. A simple ticket can be chosen, which eliminates some of these choices. Mutual funds and options can also be traded on the platform.

As for money movement, there is a check deposit function, ACH transfers, bill pay, and a very unique connection to PayPal.

Fidelity Mobile review

Other Software

Fidelity Software Rating

Besides its website and mobile app, Fidelity offers a suite of other tools that do a great job of completing its technology offerings. A desktop platform named Active Trader Pro provides very advanced option tools with multi-leg strategies. We found a probability calculator, profit-loss diagrams, strategy ideas, an IV index, and the day’s biggest trades. There are no trading requirements or account minimums to use the software; and there’s also a demo mode.

Fidelity Trading review
Charting on ATP is very advanced with lots of tools. The graph image is sharper than what the website is capable of producing.

Fidelity also provides a platform for Apple Watch, an app for Apple TV, and an iMessage feature. The watch app can display a graph, issue alerts, and provide information on global indexes. The broker provides a skill for Amazon Echo devices, too. It can give quotes, market updates, and link to a Fidelity account.

Fidelity Trading review

International Trading

Fidelity International Trading Rating

Any taxable brokerage account at Fidelity is eligible for global trading of both stocks and bonds. The service is free of charge and provides access to more than 20 foreign markets with 16 foreign currencies. Some of the global exchanges are in Portugal, South Africa, Mexico, Hong Kong, Finland, and Australia. Real-time data at Fidelity is available on foreign securities. Commissions are quite a bit higher than the broker’s standard charge for trading domestic assets.

Comparison

Fidelity Comparison Rating

While Ally Invest offers a $3.95 equity commission to active traders, the broker doesn’t provide the same level of products and services that Fidelity does.

Merrill Edge requires at least $50,000 or 15 trades a quarter to use its desktop platform, but offers free trades with $50,000. TD Ameritrade has better tools than both brokers, imposes no account requirements, and charges $0 per trade.

Robinhood offers cryptocurrency trading, E*Trade offers futures contracts, and Interactive Brokers offers options on futures; all of which are missing at Fidelity.

The biggest threat to Fidelity comes from Firstrade. This broker offers $0 commissions on all stocks, ETF's, mutual funds and more and has a very good package of investment services.

Recommendations

Fidelity is a great full-service broker that will meet the needs of most traders. We especially like its investment advisory services, its free technology, and its great customer service. We also recommend Fidelity for new traders thanks to its great selection of educational materials. And we recommend Fidelity for investors interested in global opportunities.

Fidelity Review Summary

Budget traders may find a lower commission elsewhere; but they won’t find a better value or a better broker.


Firstrade


Fidelity Investments Commissions and Fees

InvestmentsPrice
Stocks and ETFs $0
Stocks and ETFs broker assisted $32.95
Stocks and ETFs FAST (automated service phone) $12.95
Options $0 + $0.65 per contract
Fidelity Mutual Funds$0
No Transaction Fee (NTF) Non-Fidelity Mutual Funds$0 on purchase. $49.95 on redemption if held less than 2 months
Transaction Fee non-Fidelity funds$49.95 per purchase.* $0 on redemption

Fidelity Investments IRA & Account Fees

FeeAmount
IRA Setup Fee$0
Annual IRA Fee $0, $25 for SIMPLE IRAs
IRA Termination Fee$0
Full Account Transfer Out$0
Partial Account Transfer Out$0
Outgoing Wire Fees (Domestic)$10 online, $15 through representative

* - per account for Fidelity IRAs (excluding SIMPLE IRAs), Fidelity Retirement Plan (Keogh) accounts.




Firstrade


Fidelity Investments reviewed by TopRatedFirms.com Rating: 4.5