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Fidelity combines $0 commissions, top-notch research, and an excellent mobile app, all in a simple platform. With $0 account minimums and zero-expense-ratio index and mutual funds, this is one of the most affordable brokers.
$0 per trade
No brokerage is perfect for everyone, but every brokerage tailors its offerings to a certain type of customer. We think Fidelity stands out from the pack with these four main features:
Although what you pay to make a trade isn't everything, trading costs are one of the most important reasons why investors turn to discount brokers in the first place. The table below shows how much Fidelity charges per trade or transaction, based on the type of investment.
|Stocks and ETFs||Options||Mutual funds|
|$0||$0 + $0.65 per contract||$49.95 per purchase|
Bear in mind that this table reflects Fidelity's base commissions. In many cases, investors pay less than these rates, on average, thanks to free trades on certain mutual funds, including Fidelity's own proprietary mutual fund products. And its low options commissions make it competitive with the best stock brokers for options.
One of Fidelity's major advantages is that it has one of the widest selections of funds, including its own line of Fidelity funds. Combined, Fidelity account holders can purchase nearly 4,000 mutual funds and exchange-traded funds without paying a transaction fee or commission.
|Total mutual funds||More than 10,000|
|No-load mutual funds||More than 8,100|
|No-transaction-fee mutual funds||More than 3,700|
When it comes to mutual funds, Fidelity's own funds (including Fidelity index funds) are available in no-transaction-fee and no-load forms. Not only that, but some of Fidelity's own index funds have no expense ratios whatsoever.
Fidelity's list of commission-free ETFs includes some of the most popular ETFs on the market: It has a partnership with iShares, so many of the leading ETFs are free to trade for long-term investors. In all, it offers more than 2,000 ETFs.
Commissions aren't the only cost of having a brokerage account. We read through Fidelity's fee list and found a few fees that are worthy of some additional discussion.
Fidelity offers a web-based trading platform in addition to a platform for active traders. The advanced platform (Fidelity Active Trader Pro®) does not have any fees or additional costs associated with it and has no eligibility requirements.
Even the basic web-based solution is quite powerful, though, offering real-time streaming quotes through the watch list feature. Its mobile apps (available on iOS, Android, and Windows) offer the functionality you'd expect, with charting tools, and the ability to trade stocks, ETFs, mutual funds, and options right from your tablet or smartphone.
Admittedly, as long-term buy-and-hold investors, we don't demand much more from a platform other than the ability to check prices and place a trade with a few clicks. At a certain point, personal preference is ultimately the deciding factor between which platforms are "better" or "worse."
Fidelity ranks near the middle for rates on margin loans, with deep discounts for investors who have large balances. Margin loans are most cost-effective above $500,000, where there is a large step down in the interest rate charged.
|Margin balance||Interest rate|
|Less than $25,000||9.325%|
|$25,000 to $49,999||8.825%|
|$50,000 to $99,999||7.875%|
|$100,000 to $249,999||7.825%|
|$250,000 to $499,999||7.575%|
|$500,000 to $999,999||5.250%|
|$1,000,000 and up||5.00%|
Admittedly, few long-term investors use margin, and even fewer use it for long periods of time, since using borrowed money to invest can be both risky and costly. That said, if margin is central to your investing strategy, Fidelity is best for investors who use hefty, six-figure amounts of margin at a time.
Discount brokers may forgo sending you a holiday card every year, but that doesn't mean they skimp on customer support. Fidelity has 24/7 phone support for brokerage accounts. Online chat service is open Monday through Friday from 8 a.m. ET to 10 p.m. ET. (We used its live chat feature to ask about its support hours and received a response within 30 seconds.)
If you'd like to speak to someone face to face, that's as easy as visiting one of Fidelity's 197 branch offices located all around the United States. One of the benefits of working with a large financial firm is that they have the scale to offer phone support around the clock and branch offices in virtually every metropolitan area.
One area where Fidelity really shines is in research. The company boasts that it offers more research than other similarly sized discount brokerage firms. Here are a few of its research capabilities:
Fidelity also offers a number of stock, fund, and ETF screeners so you can quickly search for companies with rapidly growing earnings, funds with low expense ratios with long-tenured managers, ETFs that are highly correlated to another fund you own, and more.
In August 2018, Fidelity announced two zero expense ratio index mutual funds, took the minimum to invest in Fidelity mutual funds to $0, and announced $0 transaction fees for Fidelity funds and hundreds of other funds they support. Since that time, Fidelity has introduced two more zero expense ratio index funds to its lineup. On top of an already industry-leading $0 fee for stock and ETF trades, Fidelity has continued to cement their position as one of the most affordable brokers for investors to use. With a wide range of investing vehicles and support, that affordability doesn't come at the expense of features.
Every broker has some killer feature or function that makes it a better choice for a subset of investors than another. In thinking about Fidelity's value proposition, we think it would be a good choice if most or all of the statements below apply to you.
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