So you're looking to start investing online but you're not sure if Fidelity Investments is the right platform for you. Are Fidelity Investments good for beginners? Or is there a better alternative? In this Fidelity Investments review, we'll take a closer look at the platform and to see if it's a good broker for you and your goals.
Fidelity Investments Review:
The Bottom Line:
Fidelity Investments is a good low cost platform to start building and managing long term investments. Creating a brokerage accounts is free, and they have other cash management services too, including a credit card. While they do have software for day traders (such as Active Trader Pro) it's not generally recommended because it's a little slow. Fidelity is best known for credit cards, mutual funds, and other long term investments.
What is Fidelity Investments?
Fidelity Investments is a financial services broker that offers a range of investment options, such as Retirement Plans, Wealth Management, Credit Cards, Trading & Brokerage, Mutual Funds, and many other financial services. Founded in 1946, Fidelity is one of the oldest Financial services companies to date.
While the platform offers a wide range of services, including debit and credit cards, in this Fidelity Investments review, we'll be focusing on the investment and trading services (broker accounts). Trading and investing can be a way to make extra cash online, but is Fidelity the right platform for you?
Remember, Fidelity offers a wide range of investment and financial products, such as:
- Mutual Funds
- Fixed Income, Bonds, etc
- Sector Investing
- Cash Management
- And many others.
What you need to know is this company aims to be a one-stop-shop for financial needs. Bear in mind, only U.S residents can open an Fidelity Investments account. The platform is not available to non-U.S persons, at least not at the moment. There is an international website, with links to country-specific portals.
With that in mind, let's continue...
Is Fidelity Investments Good for Beginners?
Based on our research and tests, Fidelity Investments is a good brokerage firm for beginners because of their low cost brokerage accounts. The most notable benefits of a Fidelity Investment brokerage account are no annual fees, $0 commissions for online stocks, access to the Mobile App, and detailed insights.
Fidelity Investments also has access to an extensive range of investment options (over 10,000 mutual funds), tools for research (30 research firms), as well as robo and personal advisors. You can also see the activity and trends of other users. When you consider all those benefits, Fidelity Investments is very good for beginners.
Sign Up to Fidelity Investments Brokerage Account:
Remember, Fidelity accounts are only for U.S persons. To start trading you'll need a brokerage account.
Creating a brokerage account with Fidelity is fairly easy and you can usually have an account verified and funded within 3 days. You can open an account online for free, no minimum investment required.
To create a Fidelity Investments brokerage account, simply follow their online application quiz. I recommend opening a free Brokerage Account to get a feel of the platform. Bear in mind, they do require your social security number, as well as the standard personal information needed for financial services.
Fidelity Demo account: Not ready to go through the whole sign-up process? You can also take a look at their guest access portal, which allows you to take a look at the platform, without having to fill in all of your personal information. Just remember the guest account expires after 30-days.
Since their accounts are practically free, you might be wondering:
How Does Fidelity Investments Make Money?
Naturally, Fidelity Investments still charges some fees, but most of the fees are behind the scenes. For example, they charge fees for their Advisory services, investment management services, sell orders, transactions for mutual funds not on the brokers list, international stocks, and small a percent of dividends too, to name a few.
The company also offers other accounts and services that cost a monthly or annual fee, and those services are advertised to free account holders. One would be the Fidelity Managed Accounts, they charge advisory fees, which varies based on the account, but it's usually in the 0.35% range.
There's also the Cash Management offers that include a Visa debit card and can be used to trade with the brokerage accounts. In short, they are still making money from their customers, but it's mostly from small fees, or by redirecting people to accounts that do require monthly or annual charges.
Is Fidelity Investments Safe to Invest With?
Fidelity Investments is safe to invest with because they offer a customer protection guarantee, they use asset protection programs such as SIPC and FDIC, and they'll reimburse any losses.
Overall, Fidelity Investments is a very safe platform and they continue to improve their security. I wouldn't worry about the safety investing with Fidelity, their platform is very secure and reliable.
Let's move on to the brokerage account pros and cons...
Fidelity Pros Expanded:
✔️ Most Fees Waived:
I really like how you can make an account for free with no minimum deposit and most of the trades are free. There are no account maintenance fees. While there are some fees, Fidelity is known for their low cost accounts. They also have no-fee index funds, so it's a decent low-cost platform.
Take a look at the table below for further information:
Fidelity Investments Fees:
Annual & Monthly Fee:
Options Per Contract:
Mutual Funds Not in Index:
Withdrawal & Deposit Fee:
✔️Good Research & Learning Centers
The good news is the platform is partnered with over 30 research firms, and they also have a large database of helpful videos and tutorials in their learning center. The data is very helpful, especially for beginners who are not sure where to start.
The stock research center also shows the top buys and sells of other members, so you can take a look at the most recent trends, price changes, reports, and news. You can also use their Stock Screener to find investment options that meet your ideas and criteria, such as industries, and whatnot.
✔️Good Customer Support
From my experience, the customer support is great. You can contact them in a number of ways; live-chat, phone hotline, or browse their support database. You can also try messaging them on social media.
- General - 800-343-3548
- 401K or other benefits - 800-835-5097
Check this link for a full list of country-specific phone numbers.
One interesting feature I came across in the customer service section was the option to share your browser screen with a representative, a very useful feature.
✔️Decent Credit Card Rewards and Money Management Services
As you know, the platform offers a wide range of accounts and services, one of which is called Cash Management. The Cash Management service is similar to a bank account, and you can apply for debit or credit cards. The credit card, Fidelity Rewards Visa Signature Card, has decent benefits, such as:
- 2% Cash Back
- Reward Points
- Contactless Payments
- No Annual Fees
- And others.
Mosts of the customers like the Fidelity Credit card because of the high cash back rates. Of course, you can connect your Cash Management account your other accounts. It makes things easier.
✔️Active Trader Pro, Software for Rapid Trades
The day traders will be happy to hear that Fidelity Investments has a program, called Active Trader Pro, (runs on Windows and Mac) that allows for rapid trades.
Active Trader Pro has a lot of great benefits, such as real-time alerts, insights, monitor your portfolio, use market filters, create and save up to 50 orders, and much more. Overall, Active Trader Pro is a powerful trading tool that's relatively easy to learn and use.
Is Fidelity Investments Good for Day Trading?
Fidelity's Active Trader Pro software is good for day trading but I wouldn't say it's the best. In fact, most experienced day traders do not recommend the software because it's a little slow at loading data and executing orders.
Remember, day trading can be profitable, but it's also quite risky, and there are certain account requirements. For example, brokers require day to have $25,000 minimum in their accounts at all times.
Moving on to the Fidelity Investment cons...
Fidelity Investments is generally a good company, but there are some issues you need to know about.
?Low Rating on Customer Review Platforms
Bear in mind, the company has not claimed the listing on any of these platforms, so take the reviews with a grain of salt. Nevertheless, Trust Pilot, BBB (Better Business Bureau), and Consumer Affairs both have a bad rating for the platform, below two stars, and with many complaints. It seems like there are lots of negative Fidelity Investments reviews.
With a company as large as Fidelity, it seems like their customer service struggles to keep up with some issues. The phone wait time is a major problem, and some people said they had to wait over 2 hours to talk to a representative.
Most of the people complaining about Fidelity mention the customer support. Then again, other Fidelity Investment reviews mention the customer support was excellent, so it's hard to get a clear picture.
?Certain Fees are High, When Compared to Other Platforms
While Fidelity Investments does waive most of the usual account fees, certain fees can be quite high, especially compared to other platforms. For example, the fee for buying mutual funds. Fidelity charges $49.99 while other investment platforms charge between $9 and $20 for the same service.
?No Automatic Trades for Individual Stocks
Fidelity Investments does provide the option to automatically fund your brokerage account, but you have to manually select your investment. Currently, the platform does not support the option to automatically buy individual stocks.
It's important to note that not all investment platforms offer this service, only M1 and a couple of other companies offer automatic trades for individual stocks.
While this is not a deal breaker, it could be a problem for the set-and-forget investors.
Is Fidelity Investments Right for You?
From my experience and hours of research with the platform, I feel confident that Fidelity Investments is a good platform for new investors. My main complaint is there are so many services, products, and account types, it can feel overwhelming at times.
Fidelity aims to be a one-in-all financial company, it doesn't focus only on one financial service, but rather all of them. My advice? Create an account with the service that interests you, such as the brokerage account for investment and trading and leave the other accounts alone for now.
The main takeaway is that Fidelity Investments is a good company for long term investment options, such as stocks, bonds, mutual funds, and others. Day trading and other short term investing is possible with the platform too, but it's not the best for those kind of trades at the moment.
Alternative Income Options:
While some people are drawn to the idea of investing online, other people are put off by the idea. For your consideration, here are some alternative income ideas that you can start from home, with very little risk:
- Start an e-Commerce or Dropshipping Business
- Build a Successful Affiliate Marketing Website
- Take Surveys Online & Complete Tasks
What do you think? Do you have experience with Fidelity Investments? Share your thoughts in a comment below!