Fidelity review: rating, brokerage fees and commissions, pros and cons, minimum requirements for opening a new investment account or an IRA.


Fidelity Rating:  Fidelity Investments rating


Overview of Fidelity Investments

One of the great powerhouses in the brokerage world is Fidelity Investments. Let’s take a look at how it performs in key areas.


Investment Offerings

Fidelity Investments Rating

Fidelity clients can open brokerage (self-directed) and managed (investment-advisory) accounts. The latter category includes both robo (discount) and traditional (full-service) accounts. The automated program trades a small lineup of Fidelity mutual funds with zero expense ratios.

Self-directed customers get a decent list of investment products to trade. This list includes the following assets:

Fixed income
Stocks (including OTC and foreign issues)
Options
Funds (mutual, closed-end, and exchange-traded)
Cryptocurrencies (just bitcoin and Ethereum right now)


fidelity Investments review


Securities held inside an account at Fidelity are protected by the Securities Investor Protection Corporation (SIPC). For large accounts, Fidelity also has a supplementary policy with Lloyd’s of London that kicks in should SIPC coverage ever be needed and exhausted.

An investment account with Fidelity can be opened under one of several tax structures. The company offers taxable and tax-advantaged accounts, including:

  • 529 plans
  • Individual Retirement Accounts
  • Solo 401k plans
  • Business accounts
  • Youth accounts
  • Custodial accounts
  • Trust accounts
  • Charitable accounts
  • Estate accounts

Life insurance and annuities can also be obtained through Fidelity.


Cash Management

Fidelity Management Rating

On top of all the investment services listed above, Fidelity also operates a very extensive cash-management service. There are two account programs. One is called the Cash Management Account (CMA), while the other is the Bloom service. The latter program has its own app and includes two accounts: Save and Spend. Bloom incorporates a lot of unique features that the CMA doesn’t have, like rewards for spending at participating retailers, cash back on every purchase, round ups, and a savings match from Fidelity.

Like the Bloom accounts, the CMA is technically a brokerage account that comes with a debit card and SIPC insurance. Unlike the Bloom service, the CMA also has checkwriting, and its debit card has unlimited ATM fee refunds when used in the United States.

Fidelity’s CMA, but not the Bloom accounts, can use the company’s FDIC-sweep program, which delivers up to $5 million in government protection, many times the normal amount.


Fee Schedule

Fidelity Cost Rating

Despite Fidelity’s wide range of financial services, it charges very little for them. Trades of U.S.-listed stocks and ETFs inside self-directed accounts are $0 when placed online. Trades of foreign stocks will have commissions, and these vary by country.

Options are 65 cents per contract. Treasury securities are commission-free, while other bonds are $1 each. Self-directed accounts themselves have no account minimums and no recurring fees of any kind.

Managed accounts are a different story. Fidelity Go, the company’s robo program, costs 0.35%, although the first $25k is managed for free. There is no minimum balance requirement, although full-service accounts do have minimums. These range from $250k up to $10m, depending on the exact program selected. Fees range from 0.20% up to 1.5%.


Margin Service

Fidelity Margin Rating

A brokerage account at Fidelity can be set up as either a cash or margin account. Unfortunately, the broker’s software doesn’t display margin details for individual securities. However, stock profiles on the Fidelity website do show details on short interest, such as the percentage of shares held short and the days to cover.

Here is the cost of using borrowed money to enter long positions:

Debit Balance Margin Interest Rates
above $1,000,000 9.25%
$500,000 – $999,999 9.55%
$250,000 – $499,999 11.825%
$100,000 – $249,999 12.075%
$50,000 – $99,999 12.125%
$25,000 – $49,999 13.075%
$10,000 – $24,999 13.575%
$0 – $9,999 13.575%


Customer Service

Fidelity Customer Rating

To back up its rather superb performance, Fidelity has hundreds of brick-and-mortar offices located throughout the United States. These physical locations can provide service to both self-directed and advisory customers.

The downside of these branches is their hours. They typically are open only during the weekday. To counter this weakness, Fidelity offers phone service around the clock. We have consistently received good service through this channel.

Then there is the broker’s website. This platform creates yet another opportunity to find answers to questions and get some help. A good place to begin is with the virtual assistant (chat bot), which also appears on the mobile app. The chat icon appears in the lower-right corner of the website and in the top-right corner of the app.

A customer-service link sits in the top-left corner of the website, and there are other self-help resources scattered throughout the site. Some of these will be found under the Accounts & Trade menu. There are lots of available resources. It’s possible to turn on a money-transfer lockdown, set up security text alerts, perform a bank wire, update beneficiaries, and more.


Website Trading

Fidelity Trading Rating

Fidelity’s website is one hub that can be used to research potential investments and submit orders for them. The News & Research tab at the top of the site is where several screening tools will be found. Every asset’s profile has a chart tab where a graph can be expanded full screen. There are many tools, such as indicators and company events.


fidelity reviews


The order ticket on Fidelity’s site has account switching (look for the drop-down menu at the top of the ticket), multiple trade types, and several duration choices. For margin-enabled accounts, there is a drop-down menu at the bottom of the ticket to switch between cash and margin.


Mobile App

Fidelity App Rating

Fidelity’s digital sophistication continues on its mobile platform. The software has some really good features, including a tab for market news, a watchlist that syncs with the website (and another that is a device-only list), educational resources (including articles, podcasts, and webinars), bill pay, and mobile check deposit. Bloomberg TV streams in high definition free of charge.


fidelity app reviews


Then there is actual investing. Graphs can be rotated horizontally, and we found a small list of technical studies. Examples include SMA and Bollinger Bands. There are five plot styles.

Option chains offer standard calls and puts plus several integrated spreads, like iron condors and butterflies. Tap on a bid or ask price to pull up the order form. The quantity of contracts must be entered at this point. The trade ticket has the same features the website order form has.

Fidelity has recently launched a Beta version of its app. To switch from classic to Beta mode, tap on the More icon at the bottom and then use the toggle switch to turn the classic experience off.


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Active Trader Pro

Fidelity Active Trader Pro Rating

Investors at Fidelity who don’t find what they’re looking for on either the mobile app or the website can use Active Trader Pro. This is Fidelity’s very good desktop software. During our test drive of the platform, we found it easy to use yet powerful. We especially liked the following features:

- Conditional trade ticket that can submit multiple orders simultaneously
- Full-screen charting with many tools
- News articles that are searchable
- Advanced option tools
- Custom layouts
- Time & sales data
- Direct-access routing with several choices


fidelity reviews


ATP offers a lot of customization. Through the settings menu (accessible in the upper-right corner), it’s possible to choose one of three color themes: white, black, or blue. Many other features can be modified through this menu.


Extra Services

Fidelity Service Rating

DRIP: Auto dividend reinvesting can be turned on or off for individual securities or an entire self-directed account.

Fully-Paid Stock Lending: Fidelity has a stock-lending program that allows its customers to earn income by loaning out security shares. However, the brokerage firm does require $250k in account value to apply.

IPO Access: Fidelity self-directed accounts can get in on upcoming equity launches. The IPO hub is under the News & Research tab on the website.

Fractional-share Trading: Available for stocks, ETFs, closed-end funds, cryptocurrencies, and mutual funds.

IRA Service: Fidelity has many Individual Retirement Accounts. Besides Traditional and Roth, there are Inherited, SEP, SIMPLE, and Minor accounts.

Extended Hours: Pre-market trading in eligible US-listed stocks and ETFs begins at 7:00 am, EST. After-hour trading closes at 8:00 pm. Ethereum and bitcoin trade nearly 24/7. Foreign stocks are available whenever local markets are open.

Automatic Mutual Fund Purchases: It’s possible to enroll in systematic mutual fund purchases for one or more mutual funds (funds with front-end sales charges are ineligible). The frequency can be monthly, quarterly, or a custom schedule.


Recommendations

Retirement Planning & Long-Term Investing: Fidelity has tons of resources for long-term retirement planning. Annuities, investment advice, target-date mutual funds, life insurance, and bond ladders are just the beginning. But Robinhood, not Fidelity, now offers 1% free IRA match.

Frequent Equity Trading: With Active Trader Pro, fractional-share trading, and global exchanges, Fidelity is hard to beat.

Beginning Investors: We suggest an investment-advisory account at Fidelity in either automated or full-service mode.

Mutual Fund Investing: Fidelity has over 9,000 mutual funds with a good screener and Fund Picks from Fidelity®, which are funds pre-screened by Fidelity’s investment advisors. Firstrade, however, offers 17,000+ mutual funds free of charge.

Small Accounts: Self-directed and robo customers with only small amounts to invest will be in good shape here. Fidelity still charges commissions on many products. WeBull does not.


Fidelity Review Summary

It’s hard to find areas where Fidelity performs poorly. It could have more cryptocurrencies, but otherwise, we really do like this brokerage firm.


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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 $0.65 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 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.