Fidelity Investments is one of the largest and most reputable online brokerage firms in the world, offering a wide range of financial products and services to its customers. With over 20 million brokerage accounts and $3.5 trillion in assets under management, Fidelity is a household name in the investment industry. However, one question that often arises among investors is: is Fidelity Investments free? In this article, we will delve into the world of Fidelity’s fees and commissions, exploring what’s free and what’s not.
Understanding Fidelity’s Fee Structure
Fidelity Investments operates on a business model that generates revenue through various fees and commissions. While some services are free, others come with a cost. To understand the fee structure, let’s break it down into several categories:
Trading Fees
Fidelity offers commission-free trading for U.S. stocks, options, and exchange-traded funds (ETFs). This means that you can buy and sell these securities without paying a commission. However, there are some exceptions:
- Options trading: While there are no commissions for options trading, you will still pay a contract fee of $0.65 per contract.
- Over-the-counter (OTC) stocks: Fidelity charges a commission of $6.95 per trade for OTC stocks.
- Mutual funds: Some mutual funds come with a transaction fee, which can range from $0 to $49.95 per trade.
Account Fees
Fidelity charges various account fees, including:
- Maintenance fees: Fidelity does not charge maintenance fees for most accounts. However, some accounts, such as the Fidelity Youth Account, come with a $25 maintenance fee if the account balance falls below $100.
- Inactivity fees: Fidelity does not charge inactivity fees for most accounts. However, some accounts, such as the Fidelity Trading Account, may incur an inactivity fee if there are no trades or deposits made within a 12-month period.
- <strong Wire transfer fees: Fidelity charges a wire transfer fee of $10 for outgoing domestic wires and $15 for outgoing international wires.
Investment Product Fees
Fidelity offers a range of investment products, including mutual funds, ETFs, and index funds. While some of these products come with no fees, others may have management fees, expense ratios, or other charges.
- Index funds: Fidelity’s index funds have expense ratios ranging from 0.015% to 0.30%.
- Actively managed funds: Fidelity’s actively managed funds have expense ratios ranging from 0.50% to 1.50%.
- ETFs: Fidelity’s ETFs have expense ratios ranging from 0.03% to 0.60%.
Free Services Offered by Fidelity
While Fidelity charges fees for some services, there are many free services that you can take advantage of:
- Research and analysis tools: Fidelity offers a range of research and analysis tools, including stock screeners, charting tools, and analyst reports.
- Portfolio management tools: Fidelity’s portfolio management tools allow you to track your investments, set goals, and receive alerts.
- Financial planning tools: Fidelity’s financial planning tools help you plan for retirement, college, and other financial goals.
- Customer support: Fidelity offers 24/7 customer support via phone, email, and live chat.
Free Investment Products
Fidelity offers a range of free investment products, including:
- Fidelity Zero Large Cap Index Fund (FNILX): This fund has no expense ratio and no minimum investment requirement.
- Fidelity Zero Extended Market Index Fund (FZIPX): This fund has no expense ratio and no minimum investment requirement.
- Fidelity Zero Total Market Index Fund (FZROX): This fund has no expense ratio and no minimum investment requirement.
How to Minimize Fees at Fidelity
While Fidelity charges fees for some services, there are ways to minimize them:
- Choose low-cost investment products: Opt for Fidelity’s low-cost index funds or ETFs, which have lower expense ratios compared to actively managed funds.
- Avoid frequent trading: Frequent trading can result in higher fees and commissions. Consider adopting a long-term investment strategy to minimize trading costs.
- Use Fidelity’s free services: Take advantage of Fidelity’s free research and analysis tools, portfolio management tools, and financial planning tools to help you make informed investment decisions.
- Consider a Fidelity account with no minimum balance requirement: Fidelity offers several accounts with no minimum balance requirement, which can help you avoid maintenance fees.
Comparison with Other Brokerages
Fidelity’s fees and commissions are competitive with other online brokerages. Here’s a comparison with some of the major brokerages:
| Brokerage | Trading Commission | Account Fees |
| — | — | — |
| Fidelity | $0 (stocks, options, ETFs) | $0 (most accounts) |
| Vanguard | $0 (stocks, options, ETFs) | $0 (most accounts) |
| Charles Schwab | $0 (stocks, options, ETFs) | $0 (most accounts) |
| Robinhood | $0 (stocks, options, ETFs) | $0 (most accounts) |
| E*TRADE | $0 (stocks, options, ETFs) | $0 (most accounts) |
In conclusion, while Fidelity Investments is not entirely free, it offers a range of free services and low-cost investment products. By understanding Fidelity’s fee structure and taking advantage of its free services, you can minimize fees and make the most of your investment experience.
What is Fidelity Investments and what services does it offer?
Fidelity Investments is a financial services corporation that offers a wide range of investment products and services to its customers. These services include brokerage accounts, retirement accounts, mutual funds, exchange-traded funds (ETFs), options trading, and more. Fidelity also provides investment advice, research, and educational resources to help its customers make informed investment decisions.
In addition to its investment products and services, Fidelity also offers banking and lending services, such as cash management accounts, credit cards, and mortgages. Fidelity’s services are designed to help individuals and institutions achieve their financial goals, whether it’s saving for retirement, investing in the stock market, or managing their wealth.
Is Fidelity Investments completely free?
No, Fidelity Investments is not completely free. While Fidelity does offer some free services, such as investment research and educational resources, it also charges fees for many of its products and services. For example, Fidelity charges management fees for its mutual funds and ETFs, as well as trading commissions for buying and selling securities.
However, Fidelity has made efforts in recent years to reduce its fees and make its services more competitive. For example, Fidelity eliminated trading commissions for online stock, ETF, and options trades in 2019, making it one of the first major brokerages to do so. Fidelity also offers index funds and ETFs with no management fees, which can be a cost-effective option for investors.
What types of fees does Fidelity Investments charge?
Fidelity Investments charges a variety of fees, depending on the product or service. For example, Fidelity charges management fees for its mutual funds and ETFs, which can range from 0.015% to 1.30% per year, depending on the fund. Fidelity also charges trading commissions for certain types of trades, such as options and foreign stock trades.
In addition to management fees and trading commissions, Fidelity also charges other fees, such as maintenance fees for certain types of accounts, wire transfer fees, and fees for paper statements and confirmations. However, Fidelity does not charge fees for many of its services, such as online trading, investment research, and customer support.
How do Fidelity’s fees compare to those of other brokerages?
Fidelity’s fees are generally competitive with those of other major brokerages. For example, Fidelity’s management fees for its index funds and ETFs are often lower than those of its competitors. Fidelity’s trading commissions are also competitive, especially since it eliminated commissions for online stock, ETF, and options trades in 2019.
However, Fidelity’s fees can be higher than those of some discount brokerages or robo-advisors, which often charge lower management fees and trading commissions. Ultimately, the fees charged by Fidelity and other brokerages will depend on the specific products and services used, as well as the investor’s individual circumstances and goals.
Are there any ways to avoid or minimize Fidelity’s fees?
Yes, there are several ways to avoid or minimize Fidelity’s fees. For example, investors can choose to invest in Fidelity’s index funds and ETFs, which often have lower management fees than actively managed funds. Investors can also avoid trading commissions by using Fidelity’s online trading platform and avoiding certain types of trades, such as options and foreign stock trades.
In addition, Fidelity offers a variety of fee-free services, such as investment research and educational resources, which can help investors make informed investment decisions and avoid costly mistakes. By taking advantage of these services and choosing low-cost investment products, investors can minimize their fees and maximize their returns.
Does Fidelity offer any promotions or discounts that can help reduce fees?
Yes, Fidelity occasionally offers promotions and discounts that can help reduce fees. For example, Fidelity may offer discounts on management fees for certain investment products, or promotions that waive trading commissions for new customers. Fidelity also offers a variety of loyalty programs and rewards that can help customers save money on fees and other expenses.
In addition, Fidelity often offers special promotions and discounts for certain types of customers, such as students, military personnel, or retirees. By taking advantage of these promotions and discounts, investors can reduce their fees and save money on their investments.
How can I get more information about Fidelity’s fees and services?
You can get more information about Fidelity’s fees and services by visiting its website or contacting its customer support team. Fidelity’s website provides detailed information about its fees, as well as its investment products and services. You can also contact Fidelity’s customer support team by phone, email, or online chat to ask questions and get more information.
In addition, Fidelity offers a variety of educational resources and tools that can help investors understand its fees and services. For example, Fidelity’s website offers a fee calculator that can help investors estimate their fees and costs. Fidelity also offers a variety of investment guides and tutorials that can help investors make informed investment decisions.