Fidelity Review 2020

Fidelity has low trading and non-trading fees, including commission-free stock trading. On the negative side, financing rates and fees for some mutual funds can be high.

How we ranked fees

We ranked Fidelity's fee levels as low, average or high based on how they compare to those of all reviewed brokers.

First, let's go over some basic terms related to broker fees. What you need to keep an eye on are trading fees and non-trading fees.

• Trading fees occur when you trade. These can be commissions, spreads, financing rates and conversion fees.
• Non-trading fees include charges not directly related to trading, like withdrawal fees or inactivity fees.

In the sections below, you will find the most relevant fees of Fidelity for each asset class. For example, in the case of stock investing, commissions are the most important fees.

We also compared Fidelity's fees with those of two similar brokers we selected, Interactive Brokers and Charles Schwab. This selection is based on objective factors such as products offered, client profile, fee structure, etc. See a more detailed rundown of Fidelity alternatives.

To have a clear overview of Fidelity, let's start with the trading fees.

Fidelity trading fees

Fidelity trading fees are low.

Stock fees and ETF fees

Fidelity charges no stock and ETF commissions for US clients.

Fidelity offers higher fees for UK and German stocks than Interactive Brokers. Still, it is not common for US brokers to offer non-US stocks at all. 

If you prefer stock trading on margin, you should check Fidelity's financing rates.

Trading on margin basically means that you borrow money from your broker and can purchase more shares than you could with just the available cash in your account. You have to pay interest on this borrowed money – the interest rate is called the margin rate. It can account for a significant portion of your trading costs.

Fidelity margin rates are high. 

Fidelity's margin rate is volume-tiered. There is a base rate, plus a premium depending on the borrowed amount. At the time of the review, the base rate was 7.075%, resulting in the following financing rates:

The margin rates above are also applied for options trading.

Fund fees

The fees for mutual funds are high in general. Fidelity offers around 3,600 free mutual funds. However, If you sell these funds within 60 days of purchase, a $49.95 fee is charged. For all other funds, a purchase costs either $49.95 or $75, depending on the fund. We used $75 in our calculations because most popular mutual funds are charged this amount. You are only charged a fee for purchasing a fund, not when selling. That is why we halved Fidelity's fee, to make it comparable with other brokers that charge both for buying and selling.

Bond fees

Fidelity has generally low bond fees. Bond fees vary by bond type. We calculated the fees for Treasury bonds.

There is no commission for buying Treasury bonds. For other bonds like corporate bonds, the commission is $1 per bond, with a $250 cap on fees. The maximum fee is $50 for bonds maturing in one year or less.

Options fees

Fidelity's options fees are low, at $0.65 per contract.

Non-trading fees

Fidelity has low non-trading fees.

There are no inactivity or account fees. There are also no withdrawal fees, although receiving banks may have extra charges e.g. for currency conversion.

In our review, we tested electronic (ACH) withdrawal, which worked without any problem.

Opening an account at Fidelity is easy but not fully digital, as you have to mail in a photocopy of your ID to complete your application.

Can you open an account?

Fidelity is a US stockbroker that targets US clients. In this review, we tested Fidelity's services provided within the US.

However, there are several countries where Fidelity is available through the Fidelity group's other subsidiaries. Fidelity Investments Canada serves only Canadian customers, while Fidelity International has a strong presence in Western Europe and South-East Asia. The range of available products and services varies by country.

What is the minimum deposit at Fidelity?

There is no required minimum deposit at Fidelity for basic accounts. However, there is a minimum deposit for trade using a margin account or if you prefer investing in portfolios.

* You trade with money borrowed from the broker, also called trading on leverage.
** You buy and sell assets on the same day.

Account types

Fidelity offers many different account types:

In this review, we tested the Brokerage Individual Account.

If you want to trade with international stocks, you need to register for a supplemental service for your brokerage account called International Stock Trading. The registration is quick and straightforward, and can be initiated within your brokerage account.

How to open your account

The account opening is user-friendly, but not fully digital. After completing the online account opening form, you have to mail or fax the generated document and the photocopy of the relevant ID card to Fidelity. It took 2 business days for us to open the account.

Steps at Fidelity to open an account:

1. Select the account type.
2. Add personal information, like Social Security Number, residency, employment status, etc.
3. Select your investment/trading preferences.
4. Review your information.
5. Acknowledge the terms and conditions.
6. Print and mail/fax the application.

The online part of the application takes roughly 20 minutes, but with the mail-in process, it took about 3 business days to open and verify the account.

Signing up for International Stock Trading was relatively quick and easy; it took 5 minutes after the brokerage account was verified.

Fidelity offers an exceptionally wide range of base currencies. On the negative side, credit/debit cards are not accepted and there is a charge for wire withdrawals.

Account base currencies

At Fidelity, you can choose from 16 base currencies.

Why does this matter? For two reasons. If you fund your trading account in the same currency as your bank account or you trade assets in the same currency as your trading account base currency, you don't have to pay a conversion fee.

A convenient way to save on currency conversion fees is by opening a multi-currency bank account at a digital bank. These usually offer bank accounts in several currencies with great currency exchange rates, as well as free or cheap international bank transfers. Opening an account only takes a few minutes on your phone.

Compare digital banks

Deposit fees and options

Fidelity charges no deposit fees.

Clients can use a check, electronic (ACH), wire transfers and PayPal for depositing funds. Credit/debit cards are not available for deposits.

Fidelity offers a feature called 'BillPay' as an additional service. With a subscription, you can make payments and manage your bills using your brokerage account.

A bank transfer can take several business days, while payment with a credit/debit card is instant.

We tested the ACH transfer and it took 2 business days for the funds to arrive.

You can only deposit money from accounts that are in your name.

Fidelity withdrawal fees and options

Fidelity charges no withdrawal fees if you use ACH withdrawal, but domestic and international wire transfers cost $10.

How long does it take to withdraw money from Fidelity? We tested the ACH bank transfer withdrawal and it was completed within 2 business days.

You can only withdraw money to accounts in your name.

How do you withdraw money from Fidelity? Follow these steps:

• Log in to the account.
• Go to 'Accounts & Trade', 'Portfolio', then select 'Transfer'.
• Select the withdrawal method you want to use.
• Select your Fidelity account as 'Transfer from'.
• Select the account you want to withdraw the money to as 'Transfer to'.
• Enter the amount you wish to withdraw and set the date.
• Initiate the withdrawal.

You can also set automatic withdrawals.

Compare to other brokers

Fidelity's web platform is easy to use, has many order types and provides two-step authentication. On the negative side, it is not customizable.

Fidelity has its own, in-house developed web trading platform. It is available only in English.

Look and feel

The Fidelity web trading platform is user-friendly and provides a good user experience. However, it lacks customizability.

Login and security

Fidelity offers a two-step authentication login besides the default one-step login. If you set this feature, you'll get a random 6-digit number sent to your phone which you need to provide to log in to your account.

During the account setup, you have to provide 3 security questions and answers. When you first log in on a new device, you have to answer one of these security questions. After these steps are done, you can access your account using your regular ID and password.

Search functions

The search functions are OK. You can search by typing both a company's name or its ticker. Searching for company names gives relevant results.

If you enable International Stock Trading, then you should search using the ticker and a country code, as without the latter the search will only include the US market. This feature could be improved to simplify searching. The search field can be found in the upper right corner.

Placing orders

There are many order types available: Market, Limit, Stop, Stop Limit, Trailing stop ($,%), Trailing stop limit ($,%), Multi-contingent, One Cancels the Other (OCO), One Triggers the Other (OTO), One Triggers a One Cancels the Other (OTOCO).

To get a better understanding of these terms, read this overview of order types.

There are also order time limits you can use: Good 'Til Canceled (GTC), Day, Fill or Kill, Immediate or Cancel, On the Open, End of Day.

Alerts and notifications

You can set a wide range of alerts and notifications. From price to research alerts, you will find a lot of alert types in three main categories: Account Services, Research and Market Monitoring, and Products and Offerings.

You can get notifications via email or text message. If you download the mobile trading app, you can also set push notifications. 

The alerts can be found in your 'Home' menu. Go to 'News & Research' on the top of the page, and choose 'Alerts'. You can also just simply search for a stock and click 'Set alert'. We liked the interlinkability of the alerts: as you set an alert on one of the platforms, you can make it active on the other platforms as well with one click.

Portfolio and fee reports

Fidelity has clear portfolio and fee reports. These can be found in the 'Accounts & Trade' section, under 'Account Positions'.

You can download the reports, but only in CSV format.

Fidelity has a great mobile trading platform. It is user-friendly and well-designed, but lacks a two-step login.

Fidelity's mobile trading platform is available both for iOS and Android. In this review, we tested on iOS version. The platform is available in English.

Look and feel

The Fidelity mobile trading platform is user-friendly. It is more up-to-date than the web trading platform.

Login and security

Fidelity provides only a one-step login. It would be much safer if the mobile platform offered two-step authentication, like the web platform does. Fidelity does offer biometric authentication, which is a convenient feature. 

Search functions

The search functions are good. It's easy to use and you can find the relevant options for the stocks easily.

You can search for international stocks using the country code. Without that, the search only covers the US market.

We liked the rich research functions; for example, you can see third-party evaluations in many equity categories.

Placing orders

You can use the following order types: Market, Limit, Stop, Stop Limit, Trailing stop ($,%), Trailing stop limit ($,%).

There are also order time limits you can use: Good 'Til Canceled (GTC), Day, Fill or Kill, Immediate or Cancel, On the Open.

Alerts and notifications

You can easily set alerts and notifications on the Fidelity mobile platform. You can allow push notifications as well.

Fidelity's desktop platform is highly customizable, offers many order types and has a clear fee report. However, there is no two-step login and in some cases the platform was slow.

Fidelity offers an in-house developed desktop trading platform called Active Trader Pro. This platform is mainly for active traders and experienced investors. It acts as an extension of the web platform and integrates a lot of research functions with great flexibility. 

Similarly to the web and mobile trading platforms, the desktop trading platform is available only in English.

Look and feel

Fidelity's desktop trading platform is highly customizable.

On the negative side, the platform loads slowly in cases when a new window is opened or when it is cross-linked to the web-based platform.

Login and security

Unlike the web trading platform, Fidelity Active Trader Pro provides only a one-step login. A two-step login would be more secure.

Search functions

Fidelity Active Trader Pro has a great search function. You can search for an asset by typing its name or ticker, and will get relevant results.

Placing orders

You can use the same order types as on the web trading platform.

Alerts and notifications

You can set alerts and notifications on the desktop trading platform. The alerts are synced with the web platform. Furthermore, you can use 'Real-time Analytics,' which analyzes the historical data of your watchlist and indicates if potential trading opportunities occur.

Portfolio and fee reports

Fidelity has clear portfolio and fee reports. You can easily customize the tab and add data on commission, profit/loss balance, currency, etc. The reports can be found in the 'Account\History' menu.

Fidelity offers a lot of different trading products, from stocks to options, including international stocks. However, forex and futures trading is not available.

Fidelity stands out in terms of its international stock market offer, as most US brokers don't provide access to international stock exchanges. Fidelity's bond and mutual fund offering is also great, while its ETF and options selections are average.

Stocks and ETFs

Fidelity covers the US markets and many international stock exchanges. 

You can trade with stocks on these US stock exchanges: NYSE, NASDAQ, AMEX, OTC. The following are the global stock markets that are available:

Funds

Fidelity has a good selection of mutual funds. You will find Fidelity funds, as well as funds from other large providers like BlackRock and Vanguard. 

Bonds

Fidelity offers an extensive range of bonds. The bond selection includes both government and corporate bonds.

Options

Fidelity's options selection is average.

The following options exchanges are available: CBOE, AMEX, PHLX, ISE, ISE Gemini, BOX, NASDAQ, NASDAQ OMX BX, NYSE BATS, NYSE ARCA, MIAX and C2.

Fidelity Managed Accounts

Fidelity also offers a range of managed account services, which are great if you need help managing your investments.

Fidelity has great research tools with a large variety of services, including trading ideas, detailed fundamental data and great screeners. However, the quality of the news flow could be better.

Fidelity offers many useful tools that are great for fundamental analysis and strategy building. We tested the research tools on the web trading platform. 

Trading ideas

Fidelity provides trading ideas for stocks, ETFs and mutual funds.

In the case of stocks, under 'Analyst Opinions' you can find a summary score that is based on more than 20 researchers' votes. You can also see at a glance the performance of the best competitors and the industry average.

Fundamental data

Fidelity provides extensive information on fundamental data. You will find a lot of data for all types of assets, from stocks to funds.

For example, for companies you can easily access the financial statement for the last 5 years, peer group companies, a dividend calendar, etc.

Charting

Fidelity has good charting tools. We tested the web trading platform's charting toolkit. It is easy to edit the charts, and there are 50 technical indicators that you can set. You can also save and download the charts. 

News feed

The news feed is provided by third parties like The Wall Street Journal and Bloomberg. It is easy to read and follow, but lacks visual elements such as charts or pictures.

Other research tools you may enjoy

There are great and sophisticated screeners for stocks, ETFs and mutual funds. This is one of the best screener tools we have tested. From basic company information to technical indicators, you can use a wide range of filters to fine-tune your research.

Compare research pros and cons

Fidelity's customer service is good. They provide fast and relevant answers, but their live chat could see some improvements.

You can contact Fidelity via:

• live chat
• phone
• email

The customer support is available in English.

When we tested it, Fidelity's live chat was really slow. There were usually about a dozen clients in the queue before us, and it took up to 20 minutes to get in contact with an operator. The relevancy of the answers was mostly OK.

Phone support is great. The customer support team was very helpful and gave relevant answers. The response time was OK, as an agent was connected within a few minutes.

Email support works well, too. We received relevant answers within 1 business day.

Fidelity offers a wide range of educational materials, like articles, a demo account, webinars, etc. The materials are all very high-quality.

At Fidelity you can learn about trading in the following ways:

• Demo account
• Platform tutorial videos
• General educational videos
• Webinars
• Quality educational articles

The topics of the webinars range from beginner to advanced. There are approximately 5-10 new videos per month and you can also watch older materials.

We liked Fidelity's FAQ, called the 'Learning Center': it collects a lot of relevant information in a well-structured and easily searchable manner.

Fidelity is regulated by top-tier financial authorities and provides a high level of investor protection. On the other hand, there is no negative balance protection and the firm does not disclose its financial information.

Is Fidelity regulated?

Yes, it is regulated by the US's Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Fidelity is based in the USA and was founded in 1946.

Is Fidelity safe?

To be certain if a brokerage is safe, we highly advise that you check two facts:

• how you are protected if something goes wrong
• what the background of the broker is

How you are protected

In this review, we concentrate on Fidelity services in the US. In the US, customers are served by Fidelity Brokerage Services LLC and as such are under the US investor protection scheme, called SIPC. This protects against the loss of cash and securities in case the broker goes bust. The limit of SIPC protection is $500,000, which includes $250,000 for cash. This amount is substantially higher than what most investor protection schemes provide.

Fidelity also provides an additional total of $1 billion coverage on an aggregate company level. There is no per customer limit on securities coverage, but there is a $1.9 million coverage limit on cash per account.

Not all investments are protected by SIPC. In general, SIPC covers notes, stocks, bonds, mutual funds and other investment company shares, and other registered securities. It does not cover instruments such as unregistered investment contracts, unregistered limited partnerships, fixed annuity contracts, currency, and interests in gold, silver, or other commodity futures contracts or commodity options.

Fidelity does not provide negative balance protection. You won't be protected against the balance on your account going into negative territory.

Background

Fidelity was established in 1946. The longer track record a broker has, the more proof we have that it has successfully survived previous financial crises.

As it is a privately-held company, you may have some trouble if you are looking for more information about Fidelity. The amount of financial information available is quite limited compared to other brokers. The company is owned by the Fidelity group's parent company, called FMR LLC.

Being regulated by top-tier authorities, having a long track record and providing additional insurance are all great signs for Fidelity's safety.

Find your safe broker

Fidelity is one of the biggest US stockbrokers and is regulated by top-tier authorities.

Fidelity's research is outstanding and covers many tools, including trading ideas and detailed fundamental data. The web trading platform is easy to use and offers advanced order types. The offered range of products includes international stock exchanges in addition to the US market, which is not common among US brokers.

Fidelity has some drawbacks, though. The account opening process is not fully digital and fees for mutual funds are quite high, as is the financing rate.

As it has great research tools and a user-friendly web trading platform, and charges no inactivity fee, feel free to try Fidelity's services.