Fidelity Investments is the top online brokerage, offering a wide range of services for traders and investors. Fidelity offers exceptional tools, research, and investment options that make Fidelity easy to use, no matter your skill level or experience. Fidelity took our award for best online brokerage thanks to its comprehensive service offerings, which are perfect for both new investors and experienced traders.
Table of Contents
- Fidelity Investment Info
- How Does Fidelity Work?
- Pros & Cons of Fidelity Investment
- Fidelity Commission and Fees
- Ways to invest with Fidelity Investments
- Fidelity Customer Service and Security
Fidelity Investment Info
What is Fidelity?
Fidelity Investments is a privately-operated investment management firm with headquarters in Boston formed in 1946 as a mutual fund business. Fidelity provides various services, including fund distribution and financial guidance, wealth management, life insurance, retirement services, and securities execution and clearance. It offers equity, fixed income, and balanced mutual funds to individual investors, organizations, financial advisors, and institutional investors.
It is a leading investment management company based in Boston, Massachusetts, with over 26 million customers, $6.5 trillion in total customer assets, and more than $2.4 trillion in worldwide assets under management.
Who Should Choose Fidelity?
Fidelity serves all sorts of clients, from novices to experts and self-directed and those who want highly customized advice.
Fidelity offers a wide range of services, research, and tools for novices and experts. Fidelity also has Active Trader Pro, a downloadable program with streaming real-time data and a configurable trading interface for more experienced investors and traders.
How Does Fidelity Work?
Fidelity makes it simple to open an account. The firm offers trading accounts for accredited and non-accredited investors, with no PDT requirement for trading the markets. Investors can use Fidelity’s online or mobile platform to trade a variety of stocks and ETFs, including cash and margin accounts.
It’s a fantastic alternative for first-time investors who want to invest in fractional shares of businesses. Traders may pick the amount they wish to spend on a stock rather than the number of shares they desire to purchase.
The mobile app also includes an extensive selection of stocks and ETFs for trading. On the other hand, the desktop trading program is preferred by experienced day traders.
Clients may trade IPOs and foreign ORDs, as well as preferred warrants, rights, and Treasury Inflation-Protected Securities (TIPS), which are all available to all Fidelity clients. High Yield Corporate Bonds and Municipal Resets are also offered by Fidelity.
They do not allow customers to trade cryptocurrencies; however, account holders can utilize the FullView function on Coinbase to examine their assets.
Pros & Cons of Fidelity Investment
- Low costs
Fidelity provides commission-free online trading for stocks, penny stocks, ETFs, and options (a $0.65/contract fee applies). The firm has also done away with a lot of the account costs that brokers formerly charged, including transfer and account closure fees, domestic wire expenses, and check prices.
- Excellent trade executions
Fidelity has optimized its trade execution processes to focus on price improvement. Fidelity takes the National Best Bid and Offer (NBBO) quote when an order is accepted and routed to a market center. The company distributes orders to as many as 50 market centers, including exchanges, market makers, and automated trading systems, all of whom compete for client order flow by lowering prices. Fidelity claims a net price improvement of $0.0116 per common share and $0.0598 per options contract.
- Robust research and asset screeners
To assist you in finding your next trade, Fidelity provides a variety of powerful research tools and asset screeners. Stock, ETF, option, and fixed-income pre-built and customizable screener are available. The Stock Screener has more than 140 attributes and 20 themes, including artificial intelligence, drones, and cloud computing. The ETF-focused research includes analyst ratings, themes, and the option to search funds by a specific stock.
- Rich educational offerings
Fidelity has a broad selection of educational initiatives that have helped it consistently rank high in our Best for Beginners category. The library offers a variety of educational material in various forms, including articles, films, webinars, infographics, and recorded webinars. You may also participate in live, interactive sessions with the “Trading Strategy Desk,” where you may ask professional coaches any trading-related queries.
- No futures, commodities, or crypto trading
Fidelity Investments’ financial products include stocks, ETFs, options, and mutual funds. However, it lacks futures contracts, commodities trading, and cryptocurrencies, which might be a deal-breaker for some active traders.
- Restricted to the U.S. and main island residents
To set up an account with Fidelity, you must be a citizen or resident of the United States or one of the main islands (Puerto Rico, Guam, and U.S. Virgin Islands).
- No streaming news or data on the web platform
Streaming real-time news and quotes are available on the mobile app and Active Trader Pro platforms, but you won’t find this feature on Fidelity.com. Still, a refresh button next to the ticker symbol on the web-based platform allows you to manually reload a stock.
- High broker-assisted trading fees
If you want assistance placing a trade, this service will cost $32.95. This broker-assisted fee is considerably more expensive than the competition—and it’s the most expensive of the brokers we looked at. For comparison, this charge typically ranges between $0 and $20.
Fidelity Commission and Fees
Fidelity’s zero-commission stock and ETF trading are in line with the industry norm, but this brokerage platform distinguishes by allowing zero-commission trading for over-the-counter (OTC) equities. With a $0.65 per contract fee, options are free to trade.
They take part on a level playing field with low-cost pioneer Vanguard when it comes to mutual funds. They provide four zero-expense ratios, zero-minimum investment index funds. It also has a variety of mutual funds, including all Fidelity mutual funds that trade fee-free as long as you own the investments for at least 60 days.
One thing to be cautious about: Many non-Fidelity mutual funds are subject to commissions. The $49.95 commission when you make a purchase is a significant drawback, but redemptions are free.
The cost of a secondary issue is just one dollar, and bond investors will enjoy the zero-fee for new bond purchase transactions. Broker-assisted and treasury trades are priced at $19.95 per transaction.
The average margin rate is 6.94 percent, which falls in the middle of the group. Interactive Brokers’ 2.6% average margin rate is the lowest. If you want to borrow less than $25,000, you’ll pay 8.33% interest. In contrast, borrowers must pay only 4.00% for loans of $1 million or more.
Investors who are concerned about costs will appreciate the fact that many services, such as:
- Full account transfers out.
- Outgoing wires
- Paper statements
- Paper confirmations
Fidelity does not get paid by market makers for order flow in equities and ETFs. This is unusual among stockbrokers. They claim that their pricing is the most transparent of its competitors, saving investors $18.64 on average for a 1,000-share equity trade compared to the industry average of $4.70.
Ways to invest with Fidelity Investments
Self-directed brokerage accounts
Fidelity is an excellent choice for both hands-on and hands-off investors. You can trade commission-free on stock, ETF, and options trades if you’re a frequent or active trader (though options contracts are $0.65 each). In addition, the firm offers more than 3,400 no-transaction-fee mutual funds, as well as no account minimums or fees to establish an account.
The fund’s additional available investments include bonds, certificates of deposit (C.D.s), liquid funds, IPOs, deferred fixed annuities, precious metals, and other fixed-income securities.
Fidelity also has fractional share investing for more than 7,000 US equities and ETFs. This allows you to acquire smaller portions of assets at lower fees. When it comes to mutual funds, you may also invest in Fidelity’s ZERO-expense ratio option.
The firm also allows investors to diversify their portfolios on a worldwide scale by providing international stock trading in over 25 countries.
Fidelity provides four distinct alternatives for professional assistance or portfolio management: Fidelity Go, Fidelity Personalized Planning & Advice, Fidelity Wealth Services, and Fidelity Strategic Disciplines.
Fidelity Go, the automated advisor from Fidelity, manages your assets for you. You can establish a free investing account with Fidelity Go but will be required to pay $3 per month for balances between $10,000 and $49,999. If your account balance is more than $50,000, you’ll be charged a 0.35% yearly fee. There are no advisory expenses for balances under $10,000.
You can receive one-on-one personalized advice and automated investment management with a minimum investment of $25,000 if you’d like to learn more about Fidelity Personalized Planning & Advice. You’re matched with a CFP who helps you through the investing process. There’s a 0.50 percent annual charge for the account.
Fidelity Wealth Services differs from Fidelity Go and Fidelity Personalized Planning & Advice in that it allows you to directly contact a financial advisor who specializes only in personal investing (there is no automatic management involved). You’ll need at least $250,000 to establish this account.
The Fidelity Strategic Disciplines account also offers human advisor access, but it uses a single asset class portfolio of separate shares to assist you in achieving certain investment goals. The account requires a $2 million minimum initial deposit.
Fidelity offers a variety of retirement savings options. Traditional IRAs, Roth IRAs, rollover IRAs, Roth IRAs for children, and small company retirement plans are among them.
As long as the minor they’re opening and managing a Fidelity Roth IRAs for Kids account for is under the age of 18, has employment compensation, and is an adult, anyone can do so.
Roth IRAs and traditional IRAs do not have account minimums for Fidelity Investments or Fidelity Go.
Education savings accounts
With Fidelity’s 529 college savings plans, you may also save for education expenses. The brokerage’s 529 accounts provide a variety of benefits, including tax-free withdrawals, no minimum requirements, and no account fees.
Their Age-Based Strategies, like Fidelity Freedom 2050, assume a beneficiary’s current age when creating portfolios. Asset allocation is a technique that has been used to improve returns by balancing the different kinds of investments in your portfolio.
The asset allocations for these portfolios become more conservative or safer as the 529 account’s beneficiary approaches college age, according to its website.
There are three investment strategies to choose from with Age-Based Tactics: Fidelity Funds, Fidelity Blend Funds, and Fidelity Index Funds.
Fidelity Customer Service and Security
They conducted extensive customer service tests to evaluate the accuracy of replies and wait times for phone, email, and text customer support. Overall, Fidelity’s service is excellent; requests by phone have short wait times. Our calls to the firm were answered promptly, on average, within two to three minutes.
Emails were promptly answered, with several of them receiving responses within a few hours. 24/7, the chatbot provides a text chatting service. With restricted hours for human text replies, it serves as a chatbot all day and night. A genuine response was given to each email inquiry.
Fidelity is a well-known name for top-rated financial services. The firm’s security and insurance protection received an almost perfect score on our evaluations. Voice recognition for customer service distinguishes Fidelity from the competition. Other industry standards in terms of security include:
- 128-bit encryption
- Two-factor authentication
Most investors will not require more than a few thousand dollars worth of insurance. Fidelity provides basic SIPC coverage of $500,000. As an extra safety cushion against company failure or bankruptcy, it automatically offers $1 billion in supplementary insurance for each client. Cash assets are protected up to $1.9 million in additional coverage.
Fidelity Overall rating
Fidelity provides a comprehensive selection of solutions for both novice and seasoned traders alike. With numerous natural tools backed by an easy guide and simplified design, Fidelity’s instruments can help you reach expert standing in no time.
For the more intensive study, new traders will discover an abundance of useful material in the Learning Center and the Viewpoints feed on the platform. Fidelity’s platform is ideal for all types of traders and is very near to being flawless.
Fidelity has room for improvement in a few areas. The margin charges are substantially greater than those of rivals, especially for low-value investors. Non-Fidelity mutual funds fees are also steep, and there is no way to trade options right now. On the other hand, they are a good choice for brokers of all skill levels seeking a balance between power and ease of use.
How do Fidelity Investments compare?
Fidelity, Charles Schwab, and Merrill Edge offer accounts and investments for investors of all types. While each platform’s self-directed brokerage account includes commission-free equities, ETFs, and options, the investment choices available, managed/automated account fees, and account features differ.
The minimum deposit for their automated account, Fidelity Go, is lower than both Charles Schwab Intelligent Portfolios and Merrill Edge’s Guided Investing account. The Schwab account has a $5,000 minimum deposit requirement, while the Merrill Edge account requires at least $1,000.
The Fidelity Go app is free for customers with assets below $10,000. The Schwab equivalent, on the other hand, doesn’t charge any costs. You’ll pay 0.45 percent or 0.85 percent if you want to invest using Merrill Edge’s managed accounts hands-off style.
Augusta Precious Metals
Monevator named Augusta the Best Gold IRA Provider for its exceptional customer service, providing solutions to those considering a gold IRA. Augusta Precious Metals is a long-term firm that stays with its clients for the duration of its physical gold and silver portfolios.
This company differs from the competition in that it has specialized departments that handle each component of the simplified process, resulting in cost savings that are passed on to customers through decreased pricing.
According to the firm’s website, Augusta is committed to providing total openness, simplicity, and account lifetime service for clients and their bespoke metals portfolios.
American Hartford Gold
The Los Angeles-based American Hartford Gold is a precious metal investment firm. The firm’s objective is to help customers build an investment portfolio that contains gold, silver, and other valuable metals.
Investors may create a precious metal IRA with American Hartford Gold, which allows them to store their metals in a retirement account. These accounts provide advantages such as tax-deferred or tax-free income growth.
The company helps its customers buy and sell gold, silver, and other metals. It delivers the metals to people’s doors or can help them roll over their 401(k) or IRA accounts.
Trevor Gerszt founded the firm in 2006. Gerszt aimed to establish a firm that would assist each client in making sound financial decisions so they could retire comfortably and financially thrive in their golden years. The firm specializes in assisting clients in rolling over existing retirement savings accounts, establishing new Precious Metals IRAs, or acquiring gold and silver coins and bullion for personal collections or investments.
Better Business Bureau and the Business Consumer Alliance have given Goldco an A+ rating, as well as a Triple-A ranking. They also have excellent evaluations on several review sites, including Trustpilot and Google. The company’s excellent evaluations and very pleased consumers should make you feel at ease about giving your business to Goldco and utilizing them to assist you in investing in gold and silver.
Birch Gold Group, a precious metals dealer with over 20 years of expertise in the field, offers IRA-approved investments for real gold, silver, platinum, and palladium. The firm sells actual gold, silver, platinum, and palladium for IRA accounts or personal ownership.
The Birch Gold Group’s in-house IRA Department is committed to making it simple for clients to set up a Precious Metals IRA or transfer retirement accounts. With a focus on client education, Birch Gold spends time educating each investor about the advantages and dangers of precious metals investing based on their goals.
Investors may put their gold, silver, platinum, or palladium into a retirement account with a Birch Gold Group IRA. The firm makes sure your purchases comply with IRS-mandated criteria in order to be eligible for inclusion in an IRA.
Fidelity Investments has long been the go-to brokerage for retirement investors, but it’s also a great choice for active traders. The company offers mutual funds that are on par with any other broker and even includes free offerings. But there are plenty of features that matter to stock traders, too, including strong trading platforms, zero trade commissions, and a wide range of research offerings.