Fidelity Investments is a financial services company that manages money for individuals and institutions

Fidelity Investments is a privately held company that offers brokerage accounts, retirement accounts, investment funds, and advisory services. It does not receive government funding and is not a government agency. Fidelity makes money by charging fees on accounts and trades, and by managing investment funds. The company operates brokerage platforms where you can buy and sell stocks, bonds, mutual funds, and exchange-traded funds (ETFs). It also runs retirement accounts like IRAs and 401(k) rollovers, and offers financial advisory services through advisors and robo-advisors.

Fidelity is one of the largest financial services firms in the United States, with hundreds of billions of dollars in assets under management. It serves individual investors, retirement savers, and institutional clients like pension funds and endowments. The company is based in Boston and has been operating since 1946.

Key Takeaways

  • Fidelity is a private company that operates brokerage and investment accounts, not a government program or benefit.
  • You can open a brokerage account to buy and sell investments, or a retirement account like an IRA or 401(k) rollover.
  • Fidelity charges fees for account management, trades, and advisory services; the amount depends on the account type and service level.
  • You can manage your account online, through a mobile app, or by speaking with a Fidelity representative by phone or in person at a branch.

Types of accounts Fidelity offers

Fidelity offers several account types for different purposes. A brokerage account is a standard investment account with no contribution limits or withdrawal restrictions; you pay taxes on gains and dividends each year. A traditional IRA lets you contribute pre-tax money (up to a set annual limit) and pay taxes when you withdraw in retirement. A Roth IRA lets you contribute after-tax money and withdraw tax-free in retirement, subject to age and income rules. A 401(k) rollover account holds money you move from an employer retirement plan after you leave a job.

Fidelity also offers 529 college savings plans, which let you save for education expenses with tax advantages, and Health Savings Accounts (HSAs), which pair with high-deductible health insurance plans. Each account type has different rules about how much you can contribute, when you can withdraw, and how withdrawals are taxed.

How Fidelity makes money from your account

Fidelity charges fees in several ways. Trading commissions are charged per trade on some account types; Fidelity offers commission-free stock and ETF trades on most brokerage accounts but may charge for options or bonds. Account management fees apply to advisory accounts where a Fidelity advisor manages your money; these are typically a percentage of the assets in your account, ranging from 0.35% to 1% or more depending on the service level. Mutual fund expense ratios are annual fees charged by the funds themselves, not directly by Fidelity, but you pay them when you own the fund.

Some Fidelity accounts have no monthly or annual account fees. Others charge fees only if you use certain services, like speaking with an advisor or holding certain types of investments. You can review the fee schedule for any account type on Fidelity's website before you open an account.

How to open and manage a Fidelity account

To open a Fidelity account, you visit the Fidelity website or call 1-800-FIDELITY to speak with a representative. You will need to provide your name, address, Social Security number, and employment information. Fidelity will verify your identity and ask about your investment experience and financial goals. The process typically takes 10 to 15 minutes online or by phone.

Once your account is open, you can fund it by transferring money from a bank account, mailing a check, or rolling over money from another retirement account. You can then buy and sell investments through the Fidelity website or mobile app. Fidelity also offers phone support and has physical branches in many cities where you can meet with an advisor in person.

What investments you can hold at Fidelity

Fidelity allows you to buy and hold stocks, bonds, mutual funds, ETFs, options, and some alternative investments like real estate investment trusts (REITs). You can also hold money in a cash sweep account, which earns interest while you decide what to invest in. The range of investments available depends on your account type; some retirement accounts have restrictions on certain types of investments.

Fidelity also offers its own mutual funds and ETFs, branded as Fidelity Funds and iShares (which Fidelity owns). You can buy these funds at Fidelity, but you can also buy them through other brokers. Fidelity does not require you to use its own funds; you can buy funds and ETFs from other companies as well.

Fidelity's advisory and robo-advisor services

If you do not want to pick investments yourself, Fidelity offers robo-advisor services through a platform called Fidelity Go, which automatically builds and rebalances a portfolio based on your age and risk tolerance. Fidelity Go charges no advisory fee for accounts under $25,000 and a small annual fee for larger accounts. Fidelity also offers human advisor services through financial consultants who can discuss your goals and recommend investments; these advisors charge a percentage of assets under management.

A third option is self-directed investing, where you research and choose all investments yourself using Fidelity's research tools and educational resources. Fidelity provides educational content, webinars, and market analysis to support self-directed investors at no extra cost.

How Fidelity differs from other brokers

Fidelity competes with other large brokers like Charles Schwab, E*TRADE, and Vanguard. All of these companies offer similar core services — brokerage accounts, retirement accounts, and investment funds — but they differ in fees, investment options, and customer service. Fidelity is known for offering commission-free trading, a wide range of investment options, and extensive educational resources. Vanguard is known for lower expense ratios on its funds and a focus on long-term investing. Charles Schwab is known for strong customer service and integration with banking services.

The best broker for you depends on your investment style, the types of accounts you need, and how much support you want. Comparing fee schedules and available investments across brokers can help you decide which one fits your situation.

Frequently Asked Questions

Is Fidelity a bank?

No. Fidelity is a brokerage and investment company, not a bank. However, Fidelity does offer some banking services through partnerships, such as cash management accounts that function like checking accounts. If you need traditional banking services like a savings account or mortgage, you would go to a bank.

Can I lose money investing through Fidelity?

Yes. Fidelity is a platform where you buy and sell investments; the value of those investments can go up or down based on market conditions. Fidelity does not may provide returns. Your money is protected from Fidelity's failure through the Securities Investor Protection Corporation (SIPC), which covers up to $500,000 per account, but SIPC does not protect you from investment losses.

What is the minimum amount needed to open a Fidelity account?

Most Fidelity brokerage accounts have no minimum opening deposit. Some advisory accounts or specialized products may have minimums ranging from $25,000 to $1 million or more. You can check the specific requirements for the account type you are interested in on Fidelity's website.

Does Fidelity offer customer support?

Yes. Fidelity offers phone support 24 hours a day, seven days a week at 1-800-FIDELITY. You can also chat online, email, or visit a local Fidelity branch. Support is available in multiple languages. Phone wait times vary depending on the time of day and how busy the lines are.