Fidelity Review 2024: Pros, Cons and How It Compares
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Our Take
5.0
The bottom line:
Pros & Cons
Pros
Commission-free stock, options and ETF trades.
Large selection of research providers.
Strong customer service.
Expense-ratio-free index funds.
Highly rated mobile app.
High interest rate on uninvested cash.
Cons
Relatively high broker-assisted trade fee.
Compare to Similar Brokers
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Fees $0 per online equity trade | Fees $0 per trade | Fees $0 |
Account minimum $0 | Account minimum $0 | Account minimum $0 |
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Full Review
Where Fidelity brokerage accounts shine
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 advanced traders can customize.
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 minimum investment requirement. These investor-friendly practices save customers a lot of money.
Educational resources for all levels of investors: Fidelity's educational resources and research options are some of the strongest among the brokers we review. They include resources for both beginning retirement investors and active stock traders.
Where Fidelity brokerage accounts fall 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.
Options contract fee: Some brokers have moved to completely free options trading, but Fidelity still charges $0.65 per contract.
Alternatives to consider:
For futures trading: Webull, Interactive Brokers, Charles Schwab
Fidelity is best for
Frequent traders.
Beginner investors.
Research and data.
Retirement planning assistance.
Fidelity at a glance
Account minimum | $0. |
Stock trading costs | $0. |
Options trades | $0.65 per contract. |
Account fees (annual, transfer, closing, inactivity) | None. |
Interest rate on uninvested cash | 4.97%. |
Number of no-transaction-fee mutual funds | More than 3,300 no-transaction-fee mutual funds. |
Tradable securities | • Stocks. • Corporate, municipal and government bonds. • Mutual funds. • ETFs. • Fractional shares. • Options. • FOREX. • Precious metals. • Bitcoin and Ethereum. |
Trading platform | Fidelity.com and Active Trader Pro. Both free for all customers. |
Mobile app | Available for iOS and Android; advanced features. |
Research and data | Free and extensive. |
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. |
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How to sign up for a Fidelity account
Opening an account with Fidelity is straightforward: You'll select the type of account you want — standard brokerage account, IRA, Roth IRA, etc. — and then provide a few details to confirm your identity, employment information and other personal characteristics. Once you've done so, you'll create a username and password, and then Fidelity will walk you through the process of funding your new account by transferring money from a bank or other brokerage account.
If you have a workplace retirement plan such as a 401(k) and Fidelity is the account administrator, you may already have a login and password. Fidelity will ask you if you're already a Fidelity customer and if so, that will streamline the process — you can log into your account and pre-fill some information in the application from your profile.
What to know about Fidelity's fees
Like other brokers, Fidelity eliminated commissions in 2019 for U.S. stock, ETFs and options trades. Options trades do carry a $0.65 per-contract charge, which is on the high side compared to other brokers (some of which have done away with options contract fees entirely).
But where Fidelity shines is account fees, or rather the lack thereof: Fidelity has eliminated nearly all account fees, including the transfer and account closure fees commonly charged by brokers.
Fidelity's investment selection
Fidelity allows investors to trade stocks, bonds, mutual funds, ETFs, options, forex and two cryptocurrencies: Bitcoin and Ethereum. The company also allows traders to purchase fractional shares, allowing investors to diversify into higher-cost stocks by buying a slice of a share rather than the full amount. Fidelity also supports trading in American depository receipts (ADRs), which allow investors to purchase stock in overseas companies.
Fidelity also offers a substantial selection of bonds. Investors' choices include FDIC-insured CDs and bond funds. Fidelity clients can also buy over 100,000 individual bonds, including corporate, municipal and government bonds.
Fidelity does not offer futures trading, and its Fidelity Crypto offering is limited. While the lack of those features would not dissuade most retirement investors, they are options active or advanced traders may like to have in their investing toolkit.
Mutual fund selection
The war among brokers to cut mutual fund fees 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. Still, even the Fidelity index funds that 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.
Fidelity's trading platform and apps
Fidelity has two trading platforms, Fidelity.com and Active Trader Pro. Both are free for all customers. Highlights include advanced screeners with research and strategy-testing tools based on 10 years of historical data.
How we nerd out testing trading platforms
Our reviewers — who are writers and editors on NerdWallet’s content team — do hands-on testing of every online broker platform in our analysis. That way, we can report on every aspect of the user experience, from funding a new account to placing trades.
We score each broker against criteria that factor in the capabilities offered and the actual user experience of trading with those capabilities. This includes how easy it was to sign up for and fund a new account. Note that a broker may score very highly for the platforms it offers but low for the experience of actually using that platform. Our analysis scores these criteria separately and weighs them evenly when factored into the broker’s overall score. As a result, a broker can offer an advanced trading platform. Still, if it is clunky to use or the process of opening an account is unnecessarily arduous, their score will reflect that.
Active Trader Pro is a downloadable desktop platform. The customizable platform includes intuitive shortcuts, a 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 also trade over-the-counter securities and access IPOs.
The company's online trading experience offers an entry point for advanced traders and beginners who want the big picture on their finances. Its intuitive and easy-to-use interface allowed us to quickly explore Fidelity's offerings and compare investments 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.
The average execution quality of all brokers we review was 97.4% as of Aug. 31, 2023. That means 97.4% of orders sold for 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 a price improvement or a better share price than you were originally quoted.
Mobile app
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 to save ideas and articles from your mobile browser.
The company has streamlined and simplified its app to support better trading, portfolio monitoring and research. The app includes a customizable newsfeed and allows you to schedule appointments 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 allows a parent or guardian to monitor the teenager's activity and 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.
Other key Fidelity features
Research and data
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 consolidates 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
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.
Account minimum
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 an account. Some investment choices, such as mutual funds, may require a minimum initial investment.
High interest rate on uninvested cash
Fidelity automatically directs uninvested cash for brokerage and retirement accounts into a money market fund, which provides a decent return. As of this review period, its seven-day yield was 4.97%, although that number fluctuates.
Fidelity IRAs
Fidelity offers both Roth and traditional IRAs, as well as several types of IRAs geared toward self-employed people. 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.
$0
no account fees to open a Fidelity retail IRA
$0
None
no promotion available at this time
Is Fidelity safe?
Investing always involves taking risks, and you may wonder whether your investments are protected following recent bank failures. While brokerage accounts won’t protect you against investment losses, they carry other forms of insurance in the event of closure due to financial difficulty, bankruptcy, or unauthorized trading and theft.
According to Fidelity, Securities Investor Protection Corporation (SPIC) insurance covers all brokerage accounts, and uninvested cash balances below $5 million are eligible for Federal Deposit Insurance Corporation (FDIC) insurance. SPIC will reimburse a maximum of $500,000 in securities, and the FDIC will pay up to $250,000. Fidelity’s Customer Protection Guarantee offers additional fraud protection “for losses from unauthorized activity in your Covered Accounts occurring through no fault of your own.”
Is a Fidelity brokerage account right for you?
Fidelity is the rare broker that can serve both active traders and beginner retirement investors. 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 solid 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.
*$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 is limited to teens aged 13-17.