How to open an account and make your first investment

To invest through Fidelity, you first open an account on their website or mobile app, then link a bank account or transfer money in, and finally choose what to invest in. The process takes about 10 to 15 minutes for the account setup itself, though you may need to wait a few business days for your bank connection to verify. Fidelity offers several account types — individual brokerage accounts, retirement accounts like IRAs, and workplace 401(k) plans — and the type you choose depends on whether you want to invest money you're saving for retirement or for other goals.

Once your account is funded, you can buy stocks, bonds, mutual funds, or exchange-traded funds (ETFs). You don't need a minimum amount to start, though some individual investments have their own minimums. Most people new to investing start with a mutual fund or ETF because a single purchase gives you exposure to many companies at once, rather than picking individual stocks.

Key Takeaways

  • You can open a Fidelity account in minutes by visiting their website, providing your name and Social Security number, and linking a bank account.
  • Different account types serve different purposes: a regular brokerage account for general investing, an IRA for retirement savings with tax advantages, or a 401(k) if your employer offers one through Fidelity.
  • You need to fund your account before you can invest, which you do by linking a bank account and transferring money or by mailing a check.
  • Mutual funds and ETFs are common starting points because they spread your money across many investments in a single purchase, reducing risk compared to buying individual stocks.
  • Fidelity charges no account fees for most account types, though individual investments may have their own costs that you should review before buying.

Choosing the right account type for your situation

A brokerage account is the simplest option if you want to invest money with no restrictions on when you withdraw it or how much you can put in. You pay taxes on any gains or dividends each year, and there's no penalty for taking money out whenever you want. This works well for short-term goals or money you might need within a few years.

An Individual Retirement Account (IRA) offers tax advantages if you're saving for retirement. With a traditional IRA, you may deduct contributions from your taxes in the year you make them, and you don't pay taxes on gains until you withdraw the money in retirement. A Roth IRA works the opposite way: you pay taxes on the money going in, but withdrawals in retirement are tax-free. The trade-off is that both types penalize you if you withdraw before age 59½, with some exceptions for hardship. Contribution limits change yearly — check Fidelity's website for the current year's limit.

If your employer offers a 401(k) through Fidelity, that's often the best place to start because many employers match a portion of what you contribute, which is essentially assistance programs. The money comes out of your paycheck before taxes, lowering your taxable income that year.

Step-by-step: Opening your account

Go to Fidelity's website or download their mobile app and click "Open an Account." You'll be asked to choose the account type that fits your situation. Fidelity will ask for your name, date of birth, Social Security number, address, and employment information. This takes about five minutes.

Next, you'll link a bank account so you can transfer money into Fidelity. Fidelity will send two small test deposits to your bank (usually within one business day), and you'll confirm the amounts in your Fidelity account to verify you own that bank account. Once verified, you can transfer money whenever you want. Alternatively, you can mail a check to Fidelity's address, which they'll provide during setup.

After your account is open and funded, you're ready to invest. Log in, navigate to the "Trade" or "Invest" section, and search for the stock, mutual fund, or ETF you want to buy. Enter the number of shares or the dollar amount you want to invest, review the order, and confirm. The transaction usually completes within seconds during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays).

Understanding fees and costs

Fidelity charges no account maintenance fees for most account types, which is one reason many people choose them. However, individual investments carry their own costs. Mutual funds have an expense ratio — a yearly percentage fee that comes out of your returns automatically. For example, a fund with a 0.5% expense ratio costs you $5 per year for every $1,000 invested. ETFs typically have lower expense ratios than mutual funds, often 0.03% to 0.20%.

When you buy or sell stocks or ETFs through Fidelity, there's no commission charge. Some mutual funds charge a sales load (a percentage fee when you buy or sell), but Fidelity offers thousands of no-load mutual funds where you pay nothing upfront. Before you buy any investment, check its expense ratio and any fees listed in the fund's prospectus — a document Fidelity makes available for every investment.

What to invest in as a beginner

If you're new to investing and unsure where to start, a target-date fund is designed for you. You choose the fund based on roughly when you'll need the money (for example, a 2050 target-date fund if you plan to retire around 2050). The fund automatically adjusts its mix of stocks and bonds as you get closer to that date, becoming more conservative over time. You buy one fund and don't have to think about rebalancing.

Another beginner-friendly option is a total market index fund, which holds a tiny piece of hundreds or thousands of companies. Fidelity's FSKAX (for brokerage accounts) or FSTVX (for IRAs) are examples. These funds track the entire U.S. stock market with very low expense ratios, around 0.03%. You get broad diversification with minimal cost.

If you want to build your own mix, a common beginner approach is to split your money between a U.S. stock index fund, an international stock index fund, and a bond index fund. Fidelity's website has educational resources and tools to help you think through this, and their customer service can answer questions about specific funds without steering you toward any particular choice.

How to monitor and adjust your investments

Once you've invested, log into your Fidelity account regularly — monthly or quarterly is typical — to see how your investments are performing. Fidelity shows you your account balance, the current value of each investment you own, and how much you've gained or lost. Don't panic if the value drops in the short term; stock market fluctuations are normal, and if you're investing for retirement or a goal years away, short-term dips usually recover.

Over time, your investments may drift from your original plan. For example, if you started with 60% stocks and 40% bonds, and stocks have grown faster, you might now have 70% stocks and 30% bonds. Rebalancing means selling some of the investments that have grown and buying more of the ones that haven't, to get back to your target mix. You can do this manually through your Fidelity account, or you can use Fidelity's automatic rebalancing feature if you set up a target-date fund or use their advisory services.

Frequently Asked Questions

Do I need a lot of money to start investing with Fidelity?

No. Fidelity has no account minimum, and most mutual funds and ETFs let you buy with any amount of money. Some individual stocks cost more per share, but you can buy fractional shares — meaning you can invest $50 in a stock that costs $150 per share. Start with whatever you can afford and add more over time.

What's the difference between stocks and mutual funds?

A stock is a single company's ownership share. A mutual fund pools money from many investors to buy a basket of stocks, bonds, or both. Mutual funds spread your risk across many companies, so if one company performs poorly, it affects only a small part of your investment. Stocks offer more potential for high returns but also higher risk.

Can I lose all my money investing through Fidelity?

Fidelity itself is a brokerage firm that doesn't fail easily — your money is held in your name, not Fidelity's. However, the investments you buy can lose value. If you invest in a single stock and that company goes bankrupt, you could lose your entire investment in that stock. Diversified funds (mutual funds or ETFs holding many companies) reduce this risk significantly.

How long does it take to withdraw money from Fidelity?

If you sell an investment, the cash appears in your Fidelity account within one to two business days. To move that cash to your bank account, Fidelity typically takes another one to three business days. So plan for three to five business days total from the time you sell to the time money hits your bank. Retirement accounts have additional restrictions on withdrawals.

Should I invest in individual stocks or funds?

Most beginners benefit from starting with funds because they're diversified and require less research. Individual stocks demand more time to research and carry higher risk if you pick poorly. Many experienced investors use a mix: a core holding in index funds for stability, plus individual stocks for companies they understand well.