Fidelity Investment: A Smart Financial Move?

Investing is a great way to grow your net worth and build a better future for yourself and your family. If you're thinking about investing, you might be wondering whether Fidelity is the right platform for you.

Fidelity is one of the most well-rounded brokerages available today. It offers no commissions on stock or ETF trades and a selection of no-expense-ratio index funds suited to both beginner and active investors. The platform also provides investors with access to stocks, bonds, mutual funds, ETFs, options, forex, and cryptocurrencies.

Fidelity also has a strong reputation for its mutual funds, with a large selection of no-transaction-fee funds, including its Fidelity Zero index funds, which have no expense ratio and no minimum investment requirement.

In addition, Fidelity offers excellent investment platforms, such as Active Trader Pro, and superior trading platforms for all types of investors, from beginners to advanced traders. The platform also provides extensive research and screening tools, as well as educational resources for all levels of investors.

Fidelity's customer service is also highly regarded, with 24/7 live customer support, specialized trading and fixed-income customer service, and access to financial advisors at physical branches.

Overall, Fidelity is a superior investment broker for all but the most professional traders. Its combination of low fees, comprehensive investment options, and robust research and educational tools make it a great choice for those looking to grow their wealth.

Fidelity's range of investment accounts

Fidelity offers a range of investment accounts to help you reach your financial goals. These include:

Brokerage Account

Anyone over the age of 18 can open a brokerage account, which is a standard-issue investment account. There are no contribution limits, and you can add money to the account whenever you want. You also have access to a wide range of investment options, including stocks, bonds, ETFs, options, and mutual funds. You can generally withdraw any cash in the account whenever you want, but you will have to pay taxes annually on any realised investment profits. Fidelity charges no account fees or minimums for opening or maintaining a brokerage account.

K)

This is an employer-sponsored plan for investing for retirement. It offers tax-advantaged investment growth potential with relatively high contribution limits. You can contribute to the account pre-tax, and you generally don't pay any taxes while your money is sitting in the account. Many employers will also match your contributions, encouraging you to invest. However, there are rules to follow on how much you can contribute, and when and how you can take money out.

Individual Retirement Account (IRA)

This is an account for retirement that you can open and invest in yourself, independent of any workplace accounts. There are different types of IRAs, but traditional IRAs offer similar tax benefits to 401(k)s. You may get a tax deduction for the year your contribution is made, and you can contribute whenever you like. You may also have more investment choices and can trade individual stocks. However, there are rules and restrictions on who is eligible to receive a tax deduction, how much you can contribute each year, and how and when you can take money out.

Roth IRA

This is an individual retirement savings account with different tax advantages to a traditional IRA. You contribute money you've already paid taxes on, which can then be invested and potentially grow federally tax-free. It can then be withdrawn tax-free once you reach the age of 59 and a half and meet the five-year aging requirement. To be eligible to contribute, you must fall within the IRS's Roth IRA income limits. There are no required distributions for Roth IRAs at any age.

Cash Management Account

A cash management account combines most features of a bank checking or savings account with the flexibility of a brokerage account. Fidelity's version offers check writing, bill pay, a debit card, and the choice of a money market mutual fund or an FDIC-insured deposit sweep option for uninvested cash. It also gives customers the ability to buy and sell certain investments within the account. It offers a competitive rate of return when compared with the national average rate on savings and checking accounts at traditional banks, and there are no fees or minimums on the account.

SEP IRA

A SEP IRA, or Simplified Employee Pension Individual Retirement Account, is a retirement plan for self-employed individuals and small business owners. It is designed to help small business owners provide retirement savings plans to themselves and their employees with fewer administrative fees and requirements than typical workplace plans. Contributions are tax-deductible, and there are high contribution limits and flexibility. However, there are no catch-up contributions for individuals aged 50 and older, and withdrawals before the age of 59 and a half may be subject to taxes and penalties.

Solo 401(k)

A solo 401(k) is a retirement account designed for self-employed individuals or small business owners with no employees other than their spouses. Similar to a traditional 401(k), you can contribute on your behalf as the employee from your pre-tax compensation, and you can also contribute as the employer. Those contributions can be invested and potentially grow tax-deferred until withdrawn in retirement. There are tax benefits, and solo 401(k)s generally offer a wide range of investment options. However, only self-employed individuals with no employees qualify, and you can only withdraw money at a triggering event, such as reaching the age of 59 and a half.

SIMPLE IRA

A SIMPLE IRA is a retirement savings account designed for self-employed individuals or small businesses with fewer than 100 employees. An employee can defer a portion of their salary into the account, while their employer can match that contribution up to 3% of the employee's salary. The account offers employees the tax benefits of a 401(k) with the convenience of a personal IRA. Contributions are made pre-tax, and money invested in the account can grow tax-deferred until withdrawn. There are tax benefits, it is easy to set up, and there is a wide range of investment options. However, there are early withdrawal penalties, and SIMPLE IRAs do not have the same level of creditor protection as some other retirement savings plans.

HSA (Health Savings Account)

An HSA is a tax-advantaged savings account designed to help you save for eligible medical expenses. To contribute to an HSA, you must have an HSA-eligible health plan, which falls under the category of high-deductible health plans. There are triple tax benefits: contributions are tax-deductible, withdrawals for qualified medical expenses are tax-free, and any investment growth is tax-free if used for qualified medical expenses. After the age of 65, money in your HSA can be withdrawn and used for non-medical expenses, but you will have to pay income tax on those withdrawals.

529 Plan

A 529 plan is a flexible and tax-advantaged investment plan designed to help you save and invest for future education expenses. Money in a 529 plan can also help pay up to $10,000 of tuition for K-12 education. There are

The benefits of investing with Fidelity

Investing with Fidelity has many benefits. Here are some of the most notable advantages:

Low Fees and No Commissions

Fidelity offers $0 trading commissions on stocks, ETFs, and options. It has also eliminated most account fees, providing a cost-effective solution for investors. Additionally, there are many low-cost and fee-free mutual funds available.

Diverse Investment Options

Fidelity allows investors to trade a wide range of assets, including stocks, bonds, mutual funds, ETFs, options, forex, and cryptocurrencies like Bitcoin and Ethereum. This variety gives investors numerous choices to build a well-diversified portfolio.

Superior Trading Platforms

Fidelity provides multiple trading platforms, such as Fidelity.com, Active Trader Pro, and a mobile app, catering to investors of all levels, from beginners to advanced traders. Active Trader Pro, a downloadable desktop platform, offers advanced features like multi-leg options trading, real-time data, and comprehensive visual analytics.

Excellent Research and Educational Resources

Fidelity excels in providing extensive research tools and educational content. It offers third-party reports, screeners, and rankings from providers like Zacks Investment Research and Argus. The Fidelity Learning Center houses a wealth of articles, podcasts, videos, webinars, and in-person events, making it a valuable resource for investors looking to expand their knowledge.

Strong Customer Service

Fidelity is known for its accessible and knowledgeable customer support, offering 24/7 live assistance through various channels like phone, email, chat, and social media. The company also has a network of over 200 physical branches where investors can seek in-person advice.

Cash Management Account

Fidelity's cash management account stands out with features like free ATM access at any bank, electronic bill payments, no minimum account balance, and a competitive APY on uninvested cash. It combines the benefits of a traditional bank account with investment opportunities, making it a convenient choice for investors.

Fidelity's fees and charges

Fidelity has a strong reputation for its mutual funds and is one of the most well-rounded brokerages available today. The company offers a range of fee structures depending on the type of account and investments held.

Fidelity offers $0 trading commissions on U.S. stock, ETF, and option trades. Options trades carry a $0.65 per-contract charge, which is on the high side compared to other brokers.

Fidelity has eliminated nearly all account fees, including transfer and account closure fees commonly charged by other brokers. There are no account fees and no minimums to open a retail brokerage account, including IRAs.

Fidelity offers a substantial selection of bonds. Investors can choose from FDIC-insured CDs and bond funds, as well as over 100,000 individual bonds, including corporate, municipal, and government bonds.

Fidelity also offers a large selection of no-transaction-fee mutual funds, including its Fidelity Zero index funds, which have no expense ratio and no minimum investment requirement. There are also nearly 950 funds with expense ratios of 0.50% or less.

Fidelity's investment selection includes stocks, bonds, mutual funds, ETFs, options, forex, and three cryptocurrencies: Bitcoin, Ethereum, and Litecoin. Fractional shares are also available, allowing investors to diversify into higher-cost stocks by buying a slice of a share.

Fidelity's trading platforms, Fidelity.com, and Active Trader Pro, are free for all customers and include advanced screeners with research and strategy-testing tools based on 10 years of historical data.

Fidelity's customer support is available 24/7 via phone, email, chat, social media, or at one of their over 200 physical branches.

Overall, Fidelity's fee structure is highly competitive and transparent, with no hidden charges. The company offers a wide range of investment options with low fees, making it a compelling choice for investors.

Investment options with Fidelity

Fidelity offers a wide range of investment options, including stocks, bonds, mutual funds, ETFs (Exchange-Traded Funds), options, forex, and cryptocurrencies. Here is a detailed overview of the investment options available with Fidelity:

Stocks:

Fidelity allows investors to trade stocks on major exchanges worldwide. It offers $0 trading commissions on stock trades, making it convenient for investors to buy and sell stocks without incurring high transaction costs.

Bonds:

Fidelity provides investors access to a diverse range of bonds, including corporate, municipal, government, and securitized bonds. It also offers FDIC-insured CDs and bond funds, providing stable and relatively low-risk investment options.

Mutual Funds:

Fidelity is well-known for its extensive selection of mutual funds, including both actively managed funds and index funds. The company offers over 3,300 mutual funds with no transaction fees, giving investors a wide range of choices without additional trading costs.

ETFs (Exchange-Traded Funds):

Fidelity provides commission-free trading on ETFs, making it easy for investors to diversify their portfolios. ETFs offered by Fidelity cover various sectors, including stock, bond, and commodity-based funds, allowing investors to tailor their investments to their specific needs.

Options:

Fidelity supports options trading and provides a range of tools and resources for options traders, such as options strategy ideas and analysis software. However, it is important to note that options trades do carry a per-contract charge.

Forex:

Fidelity offers forex trading, allowing investors to speculate on foreign exchange rate movements and providing diversification to their portfolios.

Cryptocurrencies:

Fidelity provides a platform for trading cryptocurrencies, currently supporting Bitcoin, Ethereum, and Litecoin. This gives investors exposure to the digital asset class, which has gained significant popularity in recent years.

In addition to these investment options, Fidelity also offers retirement accounts, such as 401(k) plans and IRAs (Individual Retirement Accounts), as well as cash management accounts and a range of investment research and educational resources.

Fidelity's investment platform caters to a wide range of investors, from beginners to active traders, providing a comprehensive suite of tools and resources to support their investment journey.

Fidelity's customer service

Fidelity's Virtual Assistant is an automated search engine that can help users find information on the Fidelity website. It is available 24/7 and can be used without inputting personal or account information.

For more specialized support, customers can connect with a live team member via online chat or phone. Live chat is available Monday through Friday from 8 a.m. to 10 p.m. ET and on weekends from 9 a.m. to 4 p.m. ET. The company also provides a list of phone numbers for specific departments, such as 401(k) and health plans, with varying operating hours.

Fidelity also offers a Crypto Help Desk, where customers can get answers to their questions, find resources, and learn about crypto trading.

In addition to its digital presence, Fidelity has a network of over 200 branches for in-person advice and educational options. The company's Online Learning Center uses machine learning to provide customers with educational materials tailored to their investing behavior.

Frequently asked questions