Brokers

Fidelity Investments Review 2024: Pros, Cons and How It Compares

Where Fidelity shines

Well-rounded offering: Fidelity Investments offers $0 trading commissions, no account fees that can erode returns, a swath of research offerings and an easy-to-use platform that also can be customized for more advanced traders.

Mutual funds: Fidelity has a strong reputation for its mutual funds: The broker scores well across every funds category 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. These investor-friendly practices save customers a lot of money.

Educational resources for all levels of investor: The educational resources and research options on offer from Fidelity are some of the strongest among the brokers we review with strong resources for both beginning retirement investors and active stock traders.

Where Fidelity falls short

No futures trading: Fidelity offers fractional shares, forex and options trading, and a modest cryptocurrency program. However, it does not offer futures trading, which some investors may want.

Broker assisted trade fees: Fidelity’s broker-assisted trade fee is higher than we like to see, at $32.95.

Fidelity is best for:

  • Retirement planning assistance.

Fidelity at a glance

Account fees (annual, transfer, closing, inactivity)

Interest rate on uninvested cash

Number of no-transaction-fee mutual funds

More than 3,300 no-transaction-fee mutual funds.

• Stocks. • Corporate, municipal and government bonds. • Mutual funds. • ETFs. • Fractional shares. • Options. • FOREX. • Precious metals. • Bitcoin and Ethereum.

Fidelity.com and Active Trader Pro. Both free for all customers.

Available for iOS and Android; advanced features.

Customer support options (includes how easy it is to find key details on the website)

Phone, email and live chat 24/7; more than 200 local branches.

More detail about Fidelity’s ratings

Account minimum: 5 out of 5 stars

Fidelity’s account minimum is $0*, which has become the industry standard for brokers we review, as many no longer have a required minimum to open or maintain your account. Some investment choices, such as mutual funds, may require a minimum initial investment.

Stock trading costs: 5 out of 5 stars

Fidelity was already a leader for low-cost commissions, but the company eliminated commissions in 2019 for U.S. stock, ETFs and options trades.

Options trades: 4 out of 5 stars

Options trades are commission-free, but they still carry a contract charge, which is $0.65. Fidelity doesn’t offer volume discounts on options.

Account fees: 5 out of 5 stars

Fidelity has done away with nearly all account fees, including the transfer and account closure fees that are commonly charged by brokers.

Interest rate on uninvested cash: 4 out of 5 stars

Fidelity automatically directs uninvested cash for brokerage and retirement accounts into a money market fund, which provides a decent return. Its seven-day yield as of this review period was 4.97%, though that number can fluctuate.

Number of no-transaction-fee mutual funds: 4 out of 5 stars

The war among brokers to cut mutual fund fees has brought good changes to Fidelity: The company was the first broker to bring to market index funds with absolutely no expense ratio: the Fidelity Zero Total Market Index Fund, the Fidelity Zero International Index Fund, the Fidelity Zero Large Cap Index Fund and the Fidelity Zero Extended Market Index Fund.

Investors could build a balanced — and virtually free — retirement portfolio with these zero-expense-ratio funds alone, but even the Fidelity index funds that do charge an expense ratio undercut much of the competition on price.

Fidelity offers more than 3,300 mutual funds that carry no transaction fee and more than 950 funds with expense ratios of 0.50% or less. Those funds come from Fidelity and other mutual fund companies.

Tradable securities available: 5 out of 5 stars

Fidelity allows investors to trade stocks, bonds, mutual funds, ETFs, options, forex, Bitcoin and Ethereum. The company also allows traders to purchase fractional shares, which gives investors an option to diversify into higher-cost stocks by purchasing a slice of a share rather than the full amount. Fidelity also supports trading in ADRs, or American depository receipts, which allow investors to buy stock in overseas companies.

The selection of bonds offered by Fidelity is also substantial. Investors’ choices include FDIC-insured CDs, and bond funds. Fidelity clients can also buy more than 100,000 individual bonds including corporate, municipal and government bonds.

FIdelity does not offer futures trading and its Fidelity Crypto offering is limited. While lack of those features would not dissuade most retirement investors, they are options that active stock traders would like to have in their investing toolkit.

Trading platform: 5 out of 5 stars

Fidelity has two trading platforms, Fidelity.com and Active Trader Pro. Both are free for all customers. Highlights include advanced screeners using research and strategy-testing tools based on 10 years of historical data.

Active Trader Pro is a downloadable desktop platform. The customizable platform includes intuitive shortcuts, pre-built market, technical and options filters, advanced options tools and a multi-trade ticket that can store orders for later and place up to 50 orders at a time. Fidelity users can trade over-the-counter securities and get access to IPOs as well.

The company’s online trading experience offers an entry point for both advanced traders and beginners who just want the big picture on their finances. It’s got an intuitive and easy to use interface that allowed us to quickly explore Fidelity’s offerings and compare investments to one another without feeling pressured or confused.

Fidelity says its execution quality on trades is 98.6%, putting it in the top tier of providers we’ve reviewed. Clients can also trade certain investments outside of traditional market hours. Pre-market orders start at 7 a.m. and after-market orders are accepted until 8 p.m.

One note on Fidelity’s business model: Though the company doesn’t receive conventional payment for order flow on equities trades, there are some instances in which exchanges or brokers may pay Fidelity for sending them your trades.

🤓Nerdy Tip

The average execution quality of all brokers we review was 97.4% as of August 31, 2023. That means 97.4% of orders were executed at a price that was at or better than the National Best Bid and Offer. Executing at or above the NBBO means you may receive price improvement, or a better share price than you were originally quoted.

Mobile app: 5 out of 5 stars

Our star rating here is based on how iOS and Android users score the broker’s mobile apps. Fidelity’s highly rated app includes real-time quotes, multi-leg options trading, a consolidated version of the company’s research offerings, and a notebook where you can save ideas and articles from your mobile browser.

The company has streamlined and simplified its app to better support trading, portfolio monitoring and research, including a customizable newsfeed. You can use the app to schedule an appointment with your existing Fidelity advisor.

Fidelity also offers a customized mobile app experience for the Fidelity Youth Account, an investment account designed for teenagers (ages 13 to 17)**. We have not rated this separate app, but the youth account and app are worth a look for parents. The account, which allows a parent or guardian to monitor the teenager’s activity, offers access to stocks and ETFs, including fractional shares. Teenage account holders can also invest in select Fidelity mutual funds (including Fidelity ZERO funds, which have no expense ratio). Importantly, the account also puts some risky investments and investment strategies off limits, including options and margin trading. The app offers in-app educational resources, articles on investing and online research tools. Once the account holder reaches 18, the account will be a standard brokerage account.

Research and data: 5 out of 5 stars

Fidelity is strong here, with stock research from several third-party providers, including Zacks Investment Research and Argus. The company offers ETF research from multiple providers and options strategy ideas from options analysis software LiveVol.

Stock quote pages show an Equity Summary Score, which is a consolidation of the ratings from these research providers. It gives an “accuracy-weighted sentiment derived from the ratings of independent research providers on Fidelity.com.”

This number of research firm offerings might seem like too much to wade through, but investors can take a short quiz to identify providers that match their investment style. A research firm scorecard evaluates the accuracy of the provider’s recommendations.

Customer support options: 5 out of 5 stars

Fidelity earns strong marks for educational tools and customer service options, including a network of more than 200 branches for in-person advice and educational options, and 24/7 phone, chat and email support. Fidelity’s Online Learning Center also offers a customized experience, using machine learning to surface educational materials that match the customer’s investing behavior.

Fidelity IRAs

Fidelity offers both Roth and traditional IRAs, as well as several types of IRA that are geared toward people who are self-employed. IRAs are retirement savings accounts you open on your own, independent of any retirement plan that may be offered through your employer. IRAs have significant tax advantages and experts recommend using them when saving for retirement. You can have an IRA in addition to a standard brokerage account that you use to invest for non-retirement goals or trade stocks.

5.0

NerdWallet rating 

NerdWallet’s ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.

Fees

$0

no account fees to open a Fidelity retail IRA

Account minimum

Promotion

None

no promotion available at this time

Many investors are familiar with Fidelity as a provider of 401(k) plans — the broker is one of the biggest names in employee retirement accounts. It can be convenient to also have an IRA under the same roof, because you’ll be able to seamlessly view all account balances in one place. But even for those who don’t have a 401(k) with Fidelity, the company offers access to low-cost retirement investments and innovative tools to help you plan for retirement and check in on your progress.

Pros

  • $0 trade commissions.
  • Low-cost index funds and mutual funds.
  • Retirement planning tools.
  • Strong customer support.
  • Free research and data.

Cons

  • Relatively high broker-assisted trade fee.

Read full review

Is Fidelity right for you?

Fidelity is the rare broker that’s able to serve both active traders and beginner retirement investors alike. The company brings it on every level, starting with a mutual fund selection that stacks up to any other broker and even includes free offerings. But Fidelity also offers features that matter to stock traders, including strong trading platforms, zero trade commissions and a wide range of research offerings. We can’t think of an investor who won’t be well-served by Fidelity.

How do we review brokers?

NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.

We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).

*$0.00 commission applies to online U.S. equity trades and Exchange-Traded Funds (ETFs) in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). Other exclusions and conditions may apply. See Fidelity.com/commissions for details. Employee equity compensation transactions and accounts managed by advisors or intermediaries through Fidelity Clearing & Custody Solutions® are subject to different commission schedules.

**The Fidelity Youth Account can only be opened by a parent/guardian. Account eligibility limited to teens aged 13-17.

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