Fidelity Investments is one of the best known brands in the investment industry with an easy to use website and a wide variety of investment products. As a broker, Fidelity offers many different account types such as individual retirement accounts (IRAs) and taxable accounts. There are three different IRA options for clients: the rollover IRA, the traditional IRA, and the Roth IRA.
The account opening process is quite simple and takes about 10 minutes. All required customer agreements and disclosures are available in PDF format. After completing the application process, Fidelity will immediately issue the new IRA-linked account number. You can fund your IRA by check, wire transfer, direct deposit, or ACAT from another broker.
By comparison, Vanguard has a similar account opening process that takes 10 to 15 minutes to complete. The E * Trade account opening process is a little faster and only takes five to ten minutes. Overall, Fidelity’s account opening process is similar to that of its competitors and shouldn’t be a problem.
Account welcome and features
On the opening screen there are two links that give a brief overview of the account: a four-slide introduction and a two-minute video that gives an overview of the account. Fidelity’s resources. The welcome page provides a checklist with access to funding and investment selection screens. Fidelity also allows you to designate a beneficiary for the account.
Trading and Investment Choices
Fidelity is one of the best online brokerage companies in the business and allows you to buy almost any stocks, mutual funds, exchange traded funds (ETFs) or fixed credit integrations. The trading system is divided into five tabs: stocks / ETFs, mutual funds, fixed income, conditional and baskets. The stock, ETF, mutual fund and fixed income trading screens are easy to use even for an inexperienced investor. After entering a symbol or CUSIP number, the offer is instantly displayed on the screen which shows the bid, the letter and other trade information.
For comparison, Vanguard has a similar stock and ETF trading screen. On the other hand, E * Trade markets itself to the more serious traders. It has a much more advanced trading platform on its regular website and the updated E * Trade Pro platform.
From a performance standpoint, Fidelity works moderately, but that depends on which investments you choose. For example, the Fidelity Freedom 2045 Fund (“FFFGX”) had a 10-year average return of 5.19% as of July 31, 2016, while the Vanguard Target Retirement 2045 Fund (“VTIVX”) returned 6. 19% and the T. The Rowe Price Retirement 2045 (“TRRKX”) fund achieved a return of 6. 68%.
Fees and charges
Fidelity’s online commissions are in line with other online brokers. Online stock and option deals are $ 7. 95 each. Fidelity offers 70 iShares ETFs and 14 Fidelity ETFs with zero commission, while all others are $ 7. 95 per trade. All fidelity mutual funds and non-transaction fee non-fidelity funds have zero commission. However, if you sell within 60 days, Fidelity will charge a redemption fee of $ 49. 95. Any other mutual fund is charged at $ 49. 95 on purchase and zero on redemption.
Vanguard, on the other hand, has a more complex inventory commission schedule based on the company’s total assets. Stock trades are charged $ 7 for each of the first 25 trades, and $ 20 for subsequent trades for clients with assets less than $ 50,000. Like Fidelity, Vanguard has no commissions on the purchase of proprietary investments.
Other than commissions, there are few fees for Fidelity IRA holders and no annual account fees. Most of these fees apply to additional banking functions such as wire transfer or cashier’s check, which are charged $ 10 each.
Fidelity is recommended by many other online resources. For example, Investor recommend Junkie, OptionsHouse and TradeKing Fidelity Investments as top three online brokers. Stock broker. com rates Fidelity four and a half stars and says, “All variables considered, Fidelity is # 1 broker in 2016.”
Overall, Fidelity would be a great option for anyone looking to start an IRA or a Roth. IRA. There are no account fees and commissions are in line with competitors. Fidelity offers a wide variety of investment choices to suit every type of investor. Their website is user friendly and their trading platform is straightforward.