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Fidelity Investments is one of the largest discount investment brokerages across America. The company’s IRA account options and approach to retirement planning rank it among the best of the best. Fidelity Investments was founded in 1946.
The company and its brand name is recognized and respected across America, but doesn't specifically cater to self-directed IRA investors, but does offer various investing instruments geared towards retirement planning.
Pros:
- Low non-trading fees
- Free stock and ETF trading
- Some mutual fund investments are free
- User-friendly trading platform with clear reporting
- Interactive charts
Cons:
- Financing Rates are high
- High mutual fund fees
- Account opening not fully digital
- No crypto, forex or futures trading
- No credit or debit transactions available
Fidelity Investments has a long-standing reputation of offering a full line of investment products and services to clients. The company affords the opportunity to open a Traditional IRA, Roth IRA or Rollover IRA that allows investors to transfer over a 401(k).
Fidelity Investments also offers a variety of IRA accounts for small businesses. There are specifically five different types including: SEP IRAs, SIMPLE IRAs, Self-Employed 401(k)s, Investment-Only Retirement Accounts and 401(k) Plans.
In this review will cover all the transfer rules associated with different types of IRAs, go deeper into the history of Fidelity Investments, discuss the broader pros and cons of IRA accounts, and cover everything investors need to know about choosing Fidelity Investments over other well-respected IRA providers like Charles Schwab, Vanguard, Betterment, TD Ameritrade, Wealthfront, E*TRADE IRA and other major players in the retirement investment industry.
It’s time to find out all about the investing options, low fees, research offerings and other services that make Fidelity Investments IRAs among the most desirable services in the financial industry today.
What is Fidelity Investments? What is a Fidelity Investments IRA?
Fidelity Investments first broke ground in 1946, making the firm one of the most trusted and longest standing investment companies in America. It wasn’t until 1983 that Fidelity Investments opened its first brick-and-mortar office in Boston. The move made it possible for customers to get information and guidance related to their investments in person for the first time ever. In 1995, Fidelity Investments became the very first mutual fund company in the world to launch a website on the World Wide Web.
The company’s roots show that Fidelity Investments has always been committed to providing best in class service when it comes to integrating technology into financial services. It’s this fundamental commitment that actually allows Fidelity Investments to offer some of the lowest fees and commissions in the industry and thus, some of the best opportunities for investors to capitalize on the long-term growth of their IRA accounts.
About The Founders and Management Team
Abigail Johnson is the CEO of Fidelity Investments.
Abigail Johnson, CEO, Fidelity Investments
Abigail Johnson, CEO, Fidelity Investments
She is one of the world’s richest women, with a net worth of approximately $16 billion. She was named CEO in 2014 and retains full control over the 45,000-plus employees that work for Fidelity Investments. Her grandfather Edward Johnson founded the company in 1946.
Jean Raymond, Chief Financial Officer, Fidelity Investments
Jean Raymond is the Chief Financial Officer of the company. She’s been with the company since 1986, spending nearly 34 years working her way up the ranks.
Jean Raymond, Chief Financial Officer, Fidelity Investments
Investments Allowed in an IRA
Fidelity Investments’ website offers an infographic that shows if an investor placed $100 in the stock market in 1926, today that $100 would be worth $587,000 in stocks, based on the average annual return of the stock market over the last 94 years. Therein lies the power of compound interest and that’s why the company provides one of the best IRA accounts and related services in the finance industry today.
A Fidelity Investments IRA allows you to choose from individual securities such as stocks, bonds, certificates of deposit, exchange-traded funds, or what’s known as a “single fund” option. Investors can decide which securities are best for them by self-selecting their choices or asking for professional help.
Self-Directed Investing
Investors choosing their own investment products can do so with commission-free trades for online stocks and ETFs and great rates on cash. Aside from choosing between the investment products mentioned above, investors can also put their money into a combination of stocks through a mutual fund, invest in U.S. Treasuries and FDIC-insured certificates of deposit.
The Single-Fund Strategy
Fidelity Investments offer something called a Single-Fund Strategy. Some investment companies call their prearranged portfolios robo-investing or something along the lines of automated investing. This Fidelity Investments product is for people who just want an entire investing strategy encapsulated in one single fund. They buy the fund and that’s it. No need for guesswork or choosing one’s own securities based on some elaborate strategy calculated by fundamental ratios and technical analysis. Just pick a fund based on individual risk tolerance, age and retirement goals, and the funds does all the work for the investor.
Fidelity Investments recommends asking oneself three important questions when deciding on whether to choose a self-directed approach or go with the Single-Fund Strategy:
- What kind of investor are you? Do you like working with a professional or do you prefer to handle things on your own?
- How much risk in your stomach? In other words, where is your risk tolerance on the scale of very conservative versus very risky.
- When do you need your money? Are you investing for the short term or the long-term?
Answering the above questions will allow investors to make better choices.
IRA Rollover Rules
Fidelity Investments offers a great IRA Rollover tool online that makes it easier to complete the rollover process. Investors typically rollover a 401(k) into an IRA when they move on from an employer and still want to focus on retirement. Fidelity Investments doesn’t charge any opening, closing or transfer fees to investors initiating a rollover.
The full gamut of investing options listed in the sections above are available within an IRA that gets rolled over from a 401(k).
As far as penalties go, a 10% early withdrawal penalty will apply to investors withdrawing any assets from their IRA or 401(k) before the age of 59 ½. That’s a government rule enforced by the IRS. All investment custodians must enforce this rule. There is the possibility of a penalty free withdrawal if the investor is using funds for a first time home purchase. All investors are required to distribute a minimum amount of their investment funds by the age of 72.
Aside from explaining the above rules, Fidelity Investments’ online tracker tells investors exactly what they need from their employer’s 401(k) administrator in order to complete an IRA rollover. It’s a great customer experience that makes everything more efficient and easy.
IRA Transfers
Fidelity Investments makes it really easy for investors to transfer their IRA. It doesn’t matter if the investors with another provider, or initiating a trustee to trustee transfer. The company’s copywriting promotes low fees and access to guidance as the top reasons people switch. Transfers can be done in person at an Investor Center, over the phone or online.
Pros and Cons of a Fidelity Investments IRA
As with any IRA provider, there are many pros and cons of dealing with Fidelity Investments for retirement investing. As is usually the case, whenever a brokerage promotes the fact that they offer advice, they have to earn money on that advice somehow and they do it in the form of fees. What’s great about Fidelity Investments is that the firm does a great job of balancing the consumer’s need for paying the lowest fees possible but still getting great advice. But as we’ve stated, every IRA provider has to make their read somewhere and there are few notable downsides to choosing Fidelity Investments over competitors.
Let’s go over the pros and cons of choosing Fidelity Investments in the most nonbiased way possible. Here’s a full and comprehensive review of the pros and cons investors should consider before they make their IRA decision for the long haul.
The Pros of Choosing Fidelity Investments for Your IRA
Fees
- Fidelity Investments charges low non-trading fees.
- Free stock and ETF trading.
- Some mutual fund investments are free.
Account Opening
- Most accounts can be opened with no minimum deposit or low minimum deposits and the account opening process is really user-friendly.
Research Offerings
- Great interactive charts.
- Provides customers with lots of trading ideas.
- Provides lots of data on the fundamentals of different assets.
Education
Fidelity Investments allows investors to learn about investing in four different ways:
- A demo account.
- Video tutorials that explain the platform.
- More general educational videos.
- Live and prerecorded online webinars.
- Education content on their blog.
The demo account means investors can trade without risk. It’s a pretty common way to lead a customer through the early stages of investing. Most competing brokerages that want to steal business from Fidelity Investments also do this. All of the content is easy to consume and it’s detailed enough to get a novice investor going.
The Cons of Choosing Fidelity Investments for Your IRA
Fees
Fidelity Investments doesn’t take any commission for stock trades, but there are fees for mutual funds and the financing rates can be very high for investors looking to borrow money to leverage their positions.
Account Opening
The only negative to opening an account at Fidelity Investments is that it’s not fully digital. Many brokerage firms and direct competitors of Fidelity Investments allow investors to open accounts without having to go anywhere. Although nearly everything can be submitted online, Fidelity Investments won’t open an account in unless investors finish the process in person.
Research Offerings
The only negative with Fidelity Investments’ research offerings is that there’s always room for more research to be included. Of course investors can always sign up for premium newsletters offered by various other stock prediction or investment related services but for the most part getting access to things like interactive charts, trading patterns and data related to fundamental analysis is enough for the average investor to make well-informed decisions that set them up for a solid retirement.
Education
Fidelity Investments has an entire section on their website called the Fidelity Investments Learning Center. The Learning Center offers all kinds of material for investors from beginner to advanced. It’s interactive, it’s easy to follow and the written content is easy to read. Everything is well organized and will be enough to get the average investor started, even if they have little to no experience.
More on Research Offerings
Fidelity Investments is one of the best IRA providers in the industry when it comes to offering investors access to in-depth research. We’ve already covered some of the pros and cons, but just like the research itself, surface level analysis doesn’t do Fidelity Investments’ offerings justice. Here are some of the benefits investors can expect when they dig deep into what Fidelity Investments has to offer:
- Access to a dozen independent research firms: an investor can look up the ticker symbol for a stock or security they’re interested in purchasing and read a list of reports completely free of charge.
- Access to StarMine: StarMine is an analytics tool offered by Thomson Reuters. More specifically, the service analyses ratings and waits them by their historical accuracy. This allows investors to make a better judgment call as it relates to the price target of a given stock or just check about whether the buy and sell ratings of that security overtime are well deserved or received proper guidance.
- Daily updates on upgrades and downgrades: many novice investors want to know if there security is trending up or down in the eyes of the game’s top analysts. Fidelity Investments provides that information from 125 different firms on a daily basis. It’s a perfect service for giving investors peace of mind as they track the performance of their stocks.
Commission and Fees
Generally speaking, the majority of investors will follow a long-term strategy for their retirement as most financial experts would recommend, so trading commissions and fees aren’t necessarily the number one consideration when it comes to choosing an IRA provider.
That said, even though investment income accumulating in an IRA is a passive endeavor, there’s still a price to be paid for being active and making trades, as always.
Fidelity Investments charges $0 for stock and ETF trades. Yes, that’s right, $0. There’s no way investors can top that anywhere else. That makes Fidelity Investments a top notch choice for saving money! That said, the brokerage has to make its money somewhere, and there are fees for other types of trades.
Options traders at Fidelity Investments will pay between $0 and $0.65 per contract, while mutual fund purchases include a fixed fee of $49.95 per purchase. That’s actually not too bad relative to other brokerages and investing firms and what they charge. And again, the key thing to consider here is that the average IRA investor probably isn’t making trades on a daily basis. IRA accounts are intended for long-term investing. Working professionals with a 30 year investment horizon are probably only reviewing their IRAs once or twice a year. That said, even for investors who are more active with our IRA accounts, Fidelity Investments’ fees are totally reasonable.
Here’s a small chart listing some of Fidelity’s basic fees:
| Fidelity | TD Ameritrade | Charles Schwab | Vanguard | |
|---|---|---|---|---|
| Zero expense ratio index funds | Yes | No | No | No |
| Lowest published margin rates | 4.00% | 7.50% | 6.575% | 4.75% |
| In-depth research from 20 different providers | Yes | No | No | No |
Customer Service and Support
Like many of the top brokerages providing investors with IRA accounts, Fidelity Investments offers 24/7 customer support. That’s over the phone. Investors checking in online can do so between 8 AM and 10 PM Eastern standard Time and normally receive a response from a customer service representative in less than a minute. Investors who wish to speak to somebody face-to-face can go to any one of the 196 brick-and-mortar locations Fidelity Investments has sprinkled all across the United States.
Fidelity Investments ranks at the top when it comes to customer service and support with only a few other brokerages competing with them in terms of speed and ease of use within their customer support channels.
Fidelity Investments SIMPLE IRA
SIMPLE stands for Savings Investment Match Plan for Employees. Fidelity Investments’ SIMPLE IRA is for self-employed individuals or small businesses with less than 100 employees wishing to take advantage of tax-sheltered retirement plans.
The advantage of this particular IRA is that the employer can write off employer contributions to employee IRAs as business expenses. Participants in a SIMPLE IRA, meaning the employees, get pretax contributions from the employer and they also get tax-deferred growth within the account.
Employers who want to use this plan can’t have any other employer-sponsored plans and employees must’ve made at least $5,000 with the company they’re working for an order to be eligible.
Fidelity Investments vs. E*TRADE
Outside of Fidelity Investments there are a few other brokerages that stand above the rest and we’re going to review them all here at GIG. One comparison that investors seem to draw pits Fidelity Investments against E*TRADE, so here, we offer our own quick summary of both.
Neither brokerage charges for stock trades. Both charge similar amounts for options trades at $0.65 per contract. E*TRADE charges less to investors who make more than 30 options trades.
While Fidelity Investments doesn’t require any minimum deposit to get an account open, E*TRADE asks customers to deposit a minimum of $500. Although that shouldn’t be upon for most people serious about saving for retirement, it is an added unnecessary barrier that Fidelity Investments doesn’t require jumping over.
That said, one area where E*TRADE does China were Fidelity Investments is when it comes to mutual fund fees. Neither broker charges investors anything when it comes to no-load mutual funds, but loaded mutual funds always come with a fee for the most part. Fidelity Investments charges $49.95 for a loaded mutual fund purchase while E*TRADE only charges $19.95.
Still, the added fees that Fidelity Investments charges is why the company can have 196 brick-and-mortar locations to serve customers where E*TRADE only has 30+. Fidelity Investments also offers way more options when it comes to basic banking services and more than 350 commission free ETFs to choose from. E*TRADE on the other hand only offers closer to 250 ETFs.
The bottom line is that Fidelity Investments is more of a full service brokerage where E*TRADE is more focused on the online experience. In some ways E*TRADE offers bigger discounts, but Fidelity Investments offers a better bang for the buck overall when it comes to service. Choosing between the two depends on what you really want. An investor who wants to handle everything themselves might use E*TRADE, where somebody with considerable wealth who want some guidance will choose Fidelity Investments.
Frequently Asked Questions about Fidelity Investments
What is Fidelity Investments?
Fidelity Investments is a discount investment brokerage offering a mix of mutual funds, stocks, certificates of deposit and retirement accounts to customers.
Where is Fidelity Investments Headquarters?
Fidelity Investments has offices all across North America serving people face-to-face. The head office is located in Boston, Massachusetts.
How Can I Withdraw Money from Fidelity Investments?
There are three ways to withdraw money from Fidelity Investments. They include transferring money to a different Fidelity account, initiating an electronic funds transfers to a bank account, or just having a check drawn on the account for the amount owed to you.
Where Can I Cash a Check from Fidelity Investments?
Investors can cash checks at nearly any major bank or credit union. It’s also possible to use payday loan or cash advance companies to get cash for a check issued by Fidelity Investments, though likely at a substantial fee.
Is There a Fidelity Investments robo-advisor?
As mentioned previously in this review, Fidelity Investments doesn’t have a robo-advisor exactly. At least that’s not what Fidelity Investments calls it. Instead they offer The Single-Fund Strategy group of portfolios broken down in the above sections. They are essentially prebuilt portfolios that cater to different levels of risk tolerance investors can choose from based on the answers they provide in the most common risk tolerance questionnaires the majority of brokerages will ask investors to answer. There is still some choice in terms of which fund or strategy works best for the individual investor to be sure, but overall, the goal is to set it and forget it. The investor picks a portfolio that works for their strategy and other than reviewing their financial situation once a year, they don’t have to look back.
Fidelity Investments vs. Schwab and Other IRA Accounts
Another comparison investors seem to make is that of Fidelity Investments versus Charles Schwab and of course other IRA accounts are going to be a consideration too. Charles Schwab has been around for a long time and the company boasts more than 300 locations across America serving customers in person. That’s tough to compete with and Charles Schwab Wednesday face-to-face customer service battle by a landslide. But that’s not to say that Fidelity Investments doesn’t have a lot to offer. That’s already been established throughout this review.
Both brokerages charge the same fees when it comes to options trading, which are noted several times above. Charles Schwab does charge less for assisted transactions. Investors will only pay $25 a trade when they accept help wears Fidelity Investments investors will pay just under $33. Charles Schwab also offers more than 2000 different commission free ETF products to choose from where Fidelity Investments offers less than 400.
Although Charles Schwab certainly leads the IRA industry in terms of depth of services and products available, Fidelity Investments is just as good a choice. Both companies outrank the competition in the industry in several different categories. Consider taking a look at our overall IRA reviews to get a look at the bigger picture and decide which IRA provider might be the best for you.
- Phone : 1-800-343-3548
- URL :
- Global Rating
- Very Good
User Rating
- 0 No reviews yet!
Fidelity Investments is one of the largest discount investment brokerages across America. The company’s IRA account options and approach to retirement planning rank it among the best of the best. Fidelity Investments was founded in 1946.
The company and its brand name is recognized and respected across America, but doesn't specifically cater to self-directed IRA investors, but does offer various investing instruments geared towards retirement planning.
