Fidelity is a workable choice for a Roth IRA, but whether it's the right one depends on what you plan to invest and how much you want to pay
Fidelity operates as a brokerage and custodian — meaning they hold your Roth IRA account and let you buy and sell investments inside it. They don't charge a monthly fee to hold the account itself, and they offer a wide range of investments: stocks, bonds, mutual funds, exchange-traded funds (ETFs), and options. For someone who wants to pick individual stocks or build a diversified portfolio of low-cost index funds, Fidelity has the tools to do it.
The real question is whether Fidelity's costs and features match what you actually plan to do. If you want to buy Fidelity's own mutual funds or ETFs, you'll pay no transaction fees. If you want to buy funds from other companies, you may pay a transaction fee per trade — though Fidelity has eliminated trading fees on most stocks and ETFs. The catch is that some mutual funds from other providers still carry fees, and Fidelity's own funds sometimes have higher expense ratios (the annual cost to hold them) than competitors' versions of the same type of fund.
Key Takeaways
- Fidelity charges no monthly account fee and no trading fees on stocks and most ETFs, making it low-cost for hands-on investors.
- Fidelity's own mutual funds and ETFs are commission-free, but some carry higher annual expense ratios than identical funds at other brokerages.
- If you plan to buy individual stocks or build a portfolio of index funds, Fidelity's tools and research are straightforward and well-documented.
- Fidelity's customer service is available by phone and chat, but response times vary depending on account size and complexity of your question.
- Alternatives like Vanguard and Charles Schwab may offer lower expense ratios on certain funds or simpler account structures depending on your investing style.
What Fidelity charges and doesn't charge
Fidelity does not charge a monthly or annual fee to hold a Roth IRA. There are no account maintenance fees, no inactivity fees, and no minimum balance requirement to open one. You can open an account with as little as $0 and fund it later.
Trading stocks and ETFs costs nothing — Fidelity eliminated per-trade commissions years ago. Buying and selling mutual funds from Fidelity itself also costs nothing. The fees you do pay are built into the funds themselves: the expense ratio, which is a percentage of your money charged annually to cover the fund's operating costs. A Fidelity S&P 500 index fund might charge 0.035% per year, while a competitor's version of the same index might charge 0.03%. Over decades, that small difference compounds.
If you buy mutual funds from other companies through Fidelity, some carry transaction fees — typically $49.95 per trade. This is less common than it used to be, but it still happens with certain older or less popular funds. Fidelity's website tells you the fee before you buy, so you won't be surprised.
Investment options and research tools
Fidelity offers roughly 4,000 mutual funds (including its own and others'), thousands of stocks, ETFs, bonds, and options. For a Roth IRA, you can hold any of these except certain complex derivatives. Most people building a long-term retirement account will use stocks, ETFs, or mutual funds — all of which Fidelity supports without restriction.
The platform includes research tools: stock screeners, fund comparison charts, analyst reports, and educational articles. If you want to research a company before buying its stock, or compare two index funds side by side, the tools are there and free to use. Fidelity also offers model portfolios — pre-built collections of funds designed for different risk levels and time horizons — which can help if you're unsure how to allocate your money.
For someone who wants to set it and forget it, Fidelity offers target-date funds (funds that automatically shift from stocks to bonds as you approach retirement) and a robo-advisor service called Fidelity Go, which builds and rebalances a portfolio for you. Fidelity Go charges no advisory fee if your account is under $25,000; above that, it charges 0.35% per year.
How Fidelity compares to other major brokerages
| Brokerage | Monthly account fee | Stock/ETF trading | Lowest S&P 500 index fund expense ratio | Minimum to open |
|---|---|---|---|---|
| Fidelity | None | Free | 0.035% | $0 |
| Vanguard | None | Free | 0.03% | $0 |
| Charles Schwab | None | Free | 0.03% | $0 |
| E*TRADE | None | Free | 0.03% | $0 |
Vanguard, Charles Schwab, and E*TRADE all offer similar no-fee account structures and free stock and ETF trading. The main differences are in expense ratios on their own funds and in the breadth of research tools. Vanguard's index funds tend to have slightly lower expense ratios than Fidelity's, but the difference is often 0.005% or less — meaningful over 40 years, but not dramatic year to year. Charles Schwab offers a wider range of educational content and has acquired TD Ameritrade, giving it a larger platform. E*TRADE appeals to active traders with more advanced charting tools.
If you plan to buy only index funds and hold them for decades, the choice between these brokerages matters less than the choice of which funds to buy. If you plan to trade frequently or use advanced research tools, Fidelity and Schwab both have strong offerings.
Customer service and account management
Fidelity offers phone support, live chat, and email. Phone lines are open during business hours and on Saturday mornings. Response times depend on call volume and the complexity of your question — simple questions about how to place a trade usually get answered quickly, while questions about tax implications or account transfers may take longer.
The Fidelity website and mobile app let you manage your account directly: transfer money in, buy and sell investments, check your balance, and view your transaction history. The interface is straightforward for basic tasks, though some users find the advanced features overwhelming. Fidelity also offers in-person appointments at its branches if you live near one and prefer face-to-face help.
Who Fidelity works well for
Fidelity is a solid choice if you want to build a diversified portfolio of index funds or ETFs and hold them long-term. The lack of account fees and trading fees means your money stays invested rather than going to the brokerage. The research tools are useful if you want to research individual stocks or compare funds before buying. The robo-advisor option (Fidelity Go) works if you'd rather not pick investments yourself.
Fidelity is less ideal if you're very cost-conscious about expense ratios — Vanguard's index funds are marginally cheaper — or if you want a very simple, all-in-one account structure. Fidelity's platform offers so many options that some people find it harder to make a decision than at a brokerage with fewer choices.
How to open a Roth IRA at Fidelity
You can open a Fidelity Roth IRA online in about 10 minutes. You'll need your Social Security number, date of birth, and a valid email address. Fidelity will ask you to verify your identity — usually by answering security questions or confirming information from your credit file. Once approved, you can link a bank account and transfer money in.
The first time you fund the account, you'll decide whether to invest the money immediately or leave it in Fidelity's cash management account (which earns a small amount of interest) while you decide what to buy. If you're unsure how to invest, Fidelity's target-date funds or Fidelity Go can make the choice for you. If you want to pick individual investments, you can research them using Fidelity's tools and place trades through the website or app.
Frequently Asked Questions
Does Fidelity charge fees if I don't trade?
No. Fidelity charges no monthly or annual account fee, and no fee for simply holding investments. You only pay the expense ratios built into the funds themselves, which you'd pay at any brokerage. You can open an account and leave money in a cash sweep account earning interest without ever buying an investment.
Can I transfer a Roth IRA from another brokerage to Fidelity?
Yes. Fidelity can handle the transfer for you — you don't move the money yourself. Contact Fidelity and tell them you want to transfer an existing Roth IRA. They'll guide you through the paperwork and coordinate with your old brokerage. The transfer usually takes one to two weeks and doesn't trigger taxes or penalties.
What's the difference between Fidelity's index funds and Vanguard's?
Both track the same market indexes, so they perform nearly identically. Vanguard's expense ratios are usually 0.005% to 0.01% lower than Fidelity's. Over 40 years on a $10,000 investment, that difference might amount to a few hundred dollars. Both are low-cost options; the choice often comes down to which platform you prefer using.
Can I use Fidelity Go if I want a hands-off Roth IRA?
Yes. Fidelity Go builds a portfolio based on your age and risk tolerance, then automatically rebalances it over time. It charges no fee on accounts under $25,000 and 0.35% per year above that. It's a simple option if you don't want to pick individual investments or funds yourself.
What happens to my Roth IRA if Fidelity goes out of business?
Your account is protected by the Securities Investor Protection Corporation (SIPC) up to $500,000 per account type. This covers the cash and investments in your account, not investment losses. Fidelity is one of the largest brokerages in the country and has been operating for decades, so the risk of closure is extremely low.