Fidelity Review 2020

Fidelity has low trading fees and low non-trading fees. There are no commissions for stock trading which is great. On the negative side, fees for some mutual funds and financing rates 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.

To get things rolling, let's go over some lingo 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 American clients.

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

If you prefer stock trading on margin or short sale, you should check Fidelity financing rates.

A financing rate, or margin rate, is charged when you trade on margin or short a stock. This basically means that you borrow money or stocks from your broker to trade. For this borrowed money/stock you have to pay interest. This is the financing rate. It can be a significant proportion of your trading costs.

Fidelity financing rates are high. 

Fidelity's financing rate is volume-tiered. It applies a base rate plus a premium depending on the financed amount. Here is a table to show the financing rates:

The financing rates above are also applied for options trading.

Fund fees

The fees for mutual funds are generally high. Fidelity offers ~3,600 free mutual funds. If you sell these free funds within 60 days after the purchase, a $49.95 fee is charged for the sale. For all other funds, mutual fund purchase is  $49.95 or $75 depending on the fund. We calculated with $75 because most popular mutual funds are charged by this commission amount. Fidelity charges only for opening a position, closing the position is free of charge. That is why we halved Fidelity's fee to be comparable with the other brokers, which charge both for opening and closing.

Bond fees

Fidelity has generally low bond fees. The bond fees vary among the different bond types. We calculated the fees for Treasury bonds.

There is no commission for Treasury bonds. For other bonds, like corporate bonds, the commission is $1 per bond and there is a maximum of $250. The maximum fee is $50 for bonds maturing one year or less.

Options fees

Fidelity option fees are low.

Fidelity charges $0.65 per contract.

Non-trading fees

Fidelity has low non-trading fees.

It charges no inactivity and account fees. There is no withdrawal fee if you use ACH transfer. The withdrawals to other banks using wire transfer cost $10.

We tested ACH, so we had no withdrawal fee.

Opening an account at Fidelity is easy and fast, but not fully digital. The application had to be mailed with the relevant ID's photocopy.

Can you open an account?

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

However, there is a handful country, where Fidelity is available through the Fidelity group's other subsidiaries. The Fidelity Investments Canada serves only Canadian customers, while Fidelity International has a strong presence in Western Europe (AT, DE, FR, NL, ES, SE, CH, UK) and South-East Asia (HK, JP, TW). The available product range and services differ from country to country.

What is the minimum deposit at Fidelity?

Fidelity minimum deposit is $0. The minimum deposit can be more if you trade on margin or prefer investing in portfolios.

* You trade with money borrowed from the broker, also called trading on leverage.

** You buy and sell an asset the same day

Account types

Fidelity offers several account types:

In this review, we tested the Brokerage Individual Account.

If you prefer trading with international stocks, you need a supplemental service attached to your brokerage account, called International Trading. The registration was quick and straightforward, you can initiate within your brokerage account.

How to open your account

The account opening is user-friendly, but in our case, it was 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. Choose the account type
2. Add personal information, like Social Security Number, residency, employment status, etc.
3. Add your investment/trading preferences
4. Review your information
5. Acknowledge the terms and conditions
6. Print and mail/fax the application

The online application took roughly 20 minutes and the account was opened and verified within the next 3 business days. 

Signing up for "International Trading" was quick and easy, it took 5 minutes after the brokerage account was verified.

Fidelity offers an exceptionally wide range of base currencies. Credit/debit cards are not accepted and the wire withdrawals are charged.

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. Revolut or Transferwise both 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.

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Deposit fees and options

Fidelity charges no deposit fees. 

Clients can use check, ACH, wire transfers, and PayPal for deposit. Credit/debit cards are not provided.

Fidelity offers the BillPay feature 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 ACH transfer and it took 2 business days.

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? You can withdraw money from Fidelity by following these steps:

• Log into the account
• Go to the "Accounts & Trade", 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"
• Add the amount you wish to withdraw, set the date
• Initiate the withdrawal

Compare to other brokers

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

Fidelity has an in-house developed web trading platform. It's 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.

During the account setup, you shall choose 3 security questions & answers. When you first log in on a new device, you have to answer one security question. After all of these registrations, you can access your account using your regular ID and password combo.

Search functions

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

If you enable International Trading, then you should search using the ticker and a country code syntax. Without the syntax, you will search within the US market. This feature could be improved to simplify the searching method. The search tab can be found in the upper right corner.

Placing orders

You can use the following order types: Market, Limit, Stop, Stop Limit, Stop trailing ($, %), Stop limit trailing ($, %), 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 and SMS. If you download the mobile trading app, you can also set mobile push notifications. 

The alerts can be found on the Profile > Preferences > Alerts and Notification section or just simply search equity and click "Set alert". We liked the interlinkability of the alerts. As you set an alert one of the platforms, you can make it active in the other platforms as well within one click.

Portfolio and fee reports

Fidelity has a clear portfolio and fee reports. They can be found in the "Accounts&Trade" Accounts position section. 

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

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

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

Look and feel

Fidelity mobile trading platform is user-friendly. In design, 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 as 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 syntax. Without the country code, the search is conducted within the US.

We liked the wide research functions, we were able to see third-party evaluations in many equity categories.

Placing orders

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

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.

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Fidelity's desktop platform is highly customizable, offers a lot of order type, and has a clear fee report. However, two-step login is not provided and in some cases, the platform loaded slowly.

Fidelity offers its in-house developed desktop trading platform, called Active Trader Pro. This desktop trading platform mainly for active traders and advanced investors. The platform is considered the 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 the content opens in a new window or it is crosslinked to the web-based platform.

Login and security

In contrast to web trading platforms, 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. This searching area gives 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 analyses the historical data of your watchlist and makes signals if potential trading opportunities occur.

Portfolio and fee reports

Fidelity has a clear portfolio and fee reports. You can easily customize the tab and add commission, profit/loss balance, currency, etc. Reports can be found under the Account\History menu. 

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Fidelity offers a lot of asset classes, from stocks to options. There are international stocks too, not just US stocks. Forex and futures are missing.

Fidelity shines on the international stock market offer. The majority of US brokers don't give access to international stock exchanges. Fidelity's bond and mutual fund offers are also great, while the ETF and options offers 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 stock markets are provided globally:

Funds

Fidelity has a good mutual fund coverage. It is similar to Charles Schwab and has a significantly broader range than Interactive Brokers'.

You will find Fidelity funds and funds from other big providers like BlackRock and Vanguard. 

Bonds

Fidelity has a wide bond offer. It is higher than Charles Schwabs offer but much lower than Interactive Brokers.

Fidelity's bond offer covers both government and corporate bonds.

Options

Fidelity's options offer is average. This offer is better than Charles Schwab's but fewer than Interactive Brokers'.

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 lot of managed account services which are great if you need help to manage your investments.

Fidelity has great research tools. You can use many tools, including trading ideas, detailed fundamental data, and great screeners.

Fidelity offers many useful tools, which 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 summarized score, which contains more than 20 researcher's votes. You can see instantly the best competitors' performance and the industry average.

ETFs and mutual funds are also well supported by third-party providers like MorningStar.
 

Fundamental data

Fidelity provides wide fundamental data. You will find a lot of data for different assets, from stocks to funds.

You can easily reach the financial statement for 5 years, peer group companies, dividend calendar, etc.

Charting

Fidelity has good charting tools. We tested the web trading platform's charting toolkit. You can easily edit the charts and there are 50 technical indicators. You can also save and download the charts. 

News feed

The news feed is provided by third parties, like Wall Street Journal or Bloomberg. It is easily readable but lacks visual elements, like charts or pictures.

Other research tools you'll 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 the basic company information to technical indicators, you can use a wide range of filters.

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Fidelity has great customer service. They give fast and relevant answers and are available 24/7.

You can contact Fidelity via:

• live chat
• telephone
• email

The customer support is available in English.

Fidelity has a fast live chat and the relevancy of the answers was mostly OK.

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

The email works well too. We got the answers within 1 business day and the relevancy was great.

It is also a big plus that the Fidelity support team is available 24/7. 

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Fidelity offers a lot of educational materials, like articles, demo account, webinars, etc. The quality of educational materials is high-quality.

At Fidelity you can learn in the following ways:

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

The online webinars' topics range from beginner to advance. There are approximately 5-10 new pieces of content per month and you can watch the previous ones as well.

We liked Fidelity's FAQ, it compresses a lot of relevant information and the searching was easy.

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Fidelity is regulated by top-tier financial authorities, like the SEC and FINRA. You are also protected by a high investor protection amount, $500,000 which includes $250,000 for cash. There is no negative balance protection and Fidelity doesn't disclose its financial information.

Is Fidelity regulated?

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

Fidelity is based in USA and was founded in 1946.

Is Fidelity safe?

To be certain, 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. There is a handful country, where Fidelity is available through the Fidelity group's other subsidiaries, but we did not test those services. In the US, customers are served by Fidelity Brokerage Services LLC and as such are under the US investor protection scheme, called SIPC. The SIPC investor protection scheme protects against the loss of cash and securities in case the broker goes bust. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. This amount is substantially higher than the amount most investor protection schemes provide.

Fidelity also provides an additional total of $1 billion coverage. There is no 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. If the balance on your account goes into negative, you won't be protected.

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.

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

Regulated by top-tier regulators, 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 regulated by top-tier regulators.

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 product offer covers international stock exchanges besides the US market, not common among the US brokers.

Fidelity has some drawbacks though. The account is not fully digital, fees for mutual funds are quite high, also financing rate.

As the research tools are great, the web trading platform is user-friendly, and no inactivity fee is charged, feel free to try Fidelity.

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