Fidelity Review 2024: Pros, Cons and How It Compares

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 no 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

What type of investor should choose Fidelity?

Just about anyone. Fidelity has low costs, a great app, tons of educational content, advanced trading features and excellent customer support. Unless you're looking for futures, Fidelity will probably work well for you.

401(k) investors. If you have a 401(k), odds are good it's through Fidelity. If you want to view your 401(k) alongside your other investment accounts, it may be a good idea to keep all your accounts in one place.

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Fidelity at a glance

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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 information. 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 Fidelity will 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 compared to other brokers that offer crypto access like Robinhood. 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

Fidelity 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 can 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 nearly 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.

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 98.87%, 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.

Mobile app

Our star rating here is based on how iOS and Android users score the broker's mobile apps, though we also test each app ourselves. 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.

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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.

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 over 4%, 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.

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.