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A comprehensive review of Fidelity

Security, trading fees, tradable assets and more

4/5 star rating

Founded in 1946, Fidelity is one of the oldest stockbrokers in the United States and has been championing financial assets investment and trading for more than 70 years. Fidelity is best-known for providing zero commission trading for US stocks, ETF, and options trades. It also has the lowest margin rates among the leading brokers in the country. As one of the biggest brokers in the world, Fidelity serves more than 30 million individual brokers and has $8.3 trillion in assets under management for its customers. 

Pros & cons

Pros

  • Zero commission for trading US stocks and ETFs.
  • Allows users to trade both US and international stocks
  • Intuitive web-trading platform
  • Un-invested cash is put into a money market fund for the customer
  • Expense-ratio-free index funds.
Cons

  • Account opening stage isn’t fully digital
  • Fees for mutual fund investments are high, as are charges for bank transfers
  • Customers sometimes have to refresh data on the site manually
  • Credit/debit cards not accepted as payment methods
  • No option for crypto, forex, or CFD trading

What can I do with Fidelity?

Fidelity is a leading broker, and the platform allows users to trade a variety of stocks and financial products, such as ETFs. The platform has the lowest margin rates amongst the leading brokers, and gives users access to trading bonds, mutual funds, money market funds, annuities, options, margin lending, and more. In addition to this, users can open ISA accounts to help build up a portfolio sheltered from tax.

Fidelity allows users to tailor their investments and accounts to fit their overall investment goals. At Fidelity, you can open accounts such as saving for retirement, managed accounts, saving for education, saving for disability, saving for medical expenses, charitable giving, estate planning, and life insurance. 

Which assets can I trade?

You can trade the following assets on Fidelity:

  • Stocks
  • ETFs
  • Money market funds
  • Mutual funds
  • International stocks
  • Bonds
  • Options
  • Insurance
  • Annuities

Payment Methods

Fidelity accepts a wide range of payment options. However, one of the platform’s drawbacks is not accepting credit and debit cards as payment methods on its platform. Besides that, you can use the following payment methods on Fidelity:

  • Bank wire
  • ACH
  • PayPal
  • BillPay
  • Cheque

Fidelity didn’t provide information regarding the minimum and maximum withdrawal limit on its platform. The minimum deposit is $0, and there are no details regarding the maximum deposit on Fidelity. 

What devices can I use Fidelity on?

As Fidelity is a fully web-based software, it can be accessed and used by any device which can access the internet, such as laptops, desktops, and smartphones. You can use the Fidelity platform on the following devices: 

  • Computers: desktops and laptops
  • Android Phones
  • iPhones

How easy is it to use Fidelity?

The Fidelity trading platform is easy to use, even for novice investors. Fidelity’s website has an easy to follow user interface, and this allows users to easily access trading services for trading equities, mutual funds, bonds, ETFs, and other financial products. Fidelity can also be accessed through its dedicated mobile app and downloadable desktop application (Active Trader Pro).

Additionally to this, you can also access other investment accounts on Fidelity such as education savings, retirement, managed accounts, fixed income, bonds, and ISAs. Fidelity also provides a wide variety of research and educational materials, making it easier for investors and traders to learn new tricks and strategies. 

At Fidelity, users also have easy access to a wide range of technical and non-technical tools. Traders can set up instant price alerts when an asset hits a desired price so they can take action in real-time. Overall, the Fidelity trading platform is easy to use, and charges very low fees.

Countries supported

Fidelity is specialised for investors in the US. However, they have the Fidelity International platform that attends to other investors in a few countries around the world.  The supported countries include:

  • United States
  • Austria
  • Canada
  • France
  • Germany
  • Hong Kong
  • Japan
  • Netherlands
  • Spain
  • Sweden
  • Switzerland
  • Taiwan
  • United Kingdom

Regulation 

Fidelity is authorised and regulated by some of the leading financial regulatory agencies in the United States and abroad. In the US, Fidelity is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

In the UK, Fidelity operates under the authority of the Financial Conduct Authority (FCA). This license gives it access to some other EU countries, such as France and Germany. Fidelity also offers its services in countries including Hong Kong, Japan, Canada, Taiwan, Austria, and more. 

Account Verification

As a world-class brokerage company, Fidelity complies with the anti-money laundering (AML) and KYC policies. As such, it requires users to verify their accounts before they are granted access to carry out certain crucial operations. 

  • ID Verification: for ID verification, Fidelity accepts a scanned copy or driving license or national ID documents.
  • Proof of residency: to verify residency, the following scanned documents are accepted: a government-issued utility bill or other documents like bank statements from the past three months. 

Customer support

Fidelity offers some of the best customer service in the industry. The customer support team at Fidelity is available 24/7 and can be contacted via various means. They have a fast response time and are very professional. 

You can reach the Fidelity customer support via any of these channels:

  • Live chat
  • Telephone
  • Email

The Stockbroker

First impression

The first thing you will notice about Fidelity is that it is almost exclusive to US residents. The Fidelity International platform is available to the non-US residents, but is not as expansive. However, for users able to access the platform, Fidelity has an intuitive interface and easy to navigate, even for new members. Their dashboard contains all the information on the investment and trading vehicles they offer to their clients. You will also find other information about Fidelity and details of financial products you can take advantage of.

To make it easier for investors, each asset class has a dedicated section on Fidelity’s platform. Thus, you will see all the asset classes and the financial instruments under them. Furthermore, Fidelity has an excellent desktop and mobile app to ease the use of their trading platforms. 

In general, Fidelity provides excellent brokerage services to its clients. 

What currency pairs can be traded?

With Fidelity, forex and cryptocurrency trading are not supported. Hence, there are no currency pairs available to traders. 

Are there fees for trading?

While stocks and ETFs are free for traders, Fidelity has fees for other assets:

  • U.S. stocks and ETFs: $0
  • Inactivity fee: $0
  • Mutual funds:  $49.95 or $75.0 for buying (selling is free) 
  • Options contract: $0.65/contract 
  • Live broker fee: $32.95 per trade.
  • International trades: Fees vary depending on the market

What is the minimum spread?

Fidelity doesn’t offer cryptocurrency and forex trading services at the moment. Hence, there is no minimum spread of currencies. 

Can I trade assets with leverage?

You can’t trade assets with leverage on Fidelity at the moment. However, they have margins available to investors and traders, which can be used on the options contract and other asset classes. With the volatility of the assets, we advise that you should be careful when using the margins for trading and investment purposes. Although you stand to make money when you use leverage and the trade turns out positive, you could also lose a lot of money when the trade goes south.

What are the margins required?

Fidelity supports margin trading on its platform. The margins required depends on the amount deposited by the client. Margin rates start from 8.3% for amount below $25,000 to 4% for $1 million and above. The higher the debit balance, the lower the margin rate on Fidelity. Among the leading brokers, such as Charles Schwab and Interactive Brokers, Fidelity has the lowest margins rate in the industry. 

Can I open long and short positions?

Yes, Fidelity supports traders opening a long and short position for the tradable assets like options, ETFs, and stocks. 

In trading, having a long or short position means betting on an asset to either go up in value or drop value over time. When a trader or investor believes the price of an asset is going to increase in the future, they purchase it. This is what it means to go long. Meanwhile, shorting is when a trader speculates that the price of an asset would go down, and sells it in order to buy it at a cheaper rate later.

Are there withdrawal and deposit limits?

Fidelity has both deposit and withdrawal limits on its platform. However, the amount differs according to the account type a client is using.  To give an example, for a trading account, the maximum amount you can request to withdraw online or by telephone is $100,000. Any amount above that will require you to fill out a form. 

Summary of Fidelity Brokerage

Fidelity has been one of the leading brokers in terms of traditional financial investment and trading for decades, and with good reason. Their trading platform makes it easy for users to access all the assets and other services available to them. 

At the moment, Fidelity doesn’t support forex and cryptocurrency trading. However, users can trade stocks, bonds, ETFs, mutual funds, and a wide variety of others. They also have other financial services like ISA accounts, education savings, medical and disability expenses, life insurance, estate planning, and more. Joining the Fidelity platform is easy, and users have unlimited access to the trading tools and the learning center. 

Conclusion

Fidelity is one of the best-known and widely used investment and trading platforms in the United States. They offer free stock and ETF trading while their fees for mutual funds and other assets are competitive. The customer support team responds to calls, emails, and live chats 24/7. 

You can access Fidelity’s services both through its online platform and dedicated mobile and desktop applications, meaning it is easy to access and use Fidelity any time, any place.

One downside is that credit and debit card payments cannot be made on Fidelity currently, but many other payment methods are accepted. It is regulated by the SEC and FINRA in the United States and also has a presence in other leading economies in the world. 

How to open an account with Fidelity

Want to sign up for an account with Fidelity? Great! Follow these steps to open one with them: 

  1. Visit the Fidelity website
  2. Click on the ‘OPEN ACCOUNT’ tab at the top of the page
  3. Choose the account type you wish to open
  4. Select individual or joint account ownership
  5. Insert your names and email address in the spaces provided
  6. At the next stage, you will provide your personal data such as social security number, date of birth, phone number, and address
  7. After verifying your identity, you can go ahead to add your investment/trading preferences
  8. Review your data
  9. Acknowledge the terms and conditions of Fidelity
  10. Print and mail/fax the application to the company
  11. The online application doesn’t take more than 20 minutes to complete, and it is verified within the next three business days

By Harry Atkins
Harry joined us in 2019 to lead our Editorial Team. Drawing on more than a decade writing, editing and managing high-profile content for blue chip companies, Harry’s considerable experience in the finance sector encompasses work for high street and investment banks, insurance companies and trading platforms.
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