Top Rated For:

• Best Online Broker
• Best For Low Costs
• Best For ETFs
• Best For Beginners

Our Take

In addition to remaining our top overall choice for best online broker and our favorite low-cost broker, Fidelity also unseated Charles Schwab in the category of Best Broker for ETFs this year. Fidelity has excellent market platforms available for customers to use on their computers and mobile devices. In addition, the company leverages its strong market position to improve an already stellar product offering while maintaining very low fees and administrative costs. Fidelity does not charge a fee or commission on stock or ETF trades. Fidelity also offers its customers access to mutual funds, options, currencies, OTCBB (penny stocks), and fixed-income products, including treasury, corporate, agency, municipal bonds, and CDs. As of 2023, Fidelity has also added cryptocurrency access for its users.

Fidelity also supports its users with excellent resources and tools for investors and traders, such as very strong educational materials, portfolio analysis tools, reports, calculators, and excellent screeners for identifying individual securities in an asset class. However, some traders may want to look elsewhere because Fidelity does not offer futures, options on futures, or commodities. 

Introduction

Fidelity is one of the largest U.S. brokerage firms and continues to be our first choice for both the best online broker and low-cost broker. The company continues to invest in its systems and innovate within its online trading platforms, such as adding an enhanced investor dashboard that remembers where you were when you closed the program, so you start at that page on the next login. It also has added thematic baskets and customizable indexes that can be rebalanced for individuals.

Overview

Founded in 1943 and headquartered in Boston, Fidelity has nearly 50 million individual investors, $12.6 trillion in assets under administration, and $4.9 trillion in discretionary assets. “Take intelligent risks rather than follow the crowd,” has been the firm’s guiding principle since its founding. It continues to impact Fidelity, as seen by current Chairman and CEO, Abby Johnson’s comment that “the reason why we exist hasn’t changed since our founding…to strengthen and secure our clients’ financial well-being.” 

Pros Explained

• Low costs: Fidelity has low costs. It offers free stock and ETF trading and has eliminated most account fees, such as transfers, account closing, and wire and check fees. Options result in a $0.65 fee per contract traded.
• Great trade executions: Fidelity obtains great trade execution by using proprietary trade execution algorithms that route orders to up to 50 market centers, such as exchanges, market makers, and automated trading systems. Fidelity is able to capture the National Best Bid and Offer (NBBO) quote and often gets even better price execution. Fidelity obtains an average of $0.0155 in net price improvement for stocks and ETFs. With the exception of options, unlike many online brokers, Fidelity does not accept payment for order flow (PFOF) for stock and ETF trades, so it always will be looking for the best price execution without any conflicts. Should they want to, traders can route their own orders.
• Excellent research and asset screeners: Research offerings and asset screeners at Fidelity are excellent, with users having screeners for stocks, ETFs, options, and fixed income. Screeners have many available criteria (more than 140 for the stock screener), themes like cloud computing, drones, environmental, social, and governance (ESG), and watch lists that can be created from search results. A new feature of Fidelity’s screeners includes the ability to see all ETFs that contain a specific stock. Users also have free access to both Fidelity research and third-party research from more than 25 sources, including Zacks Investment Research, Standard & Poors, and Moody’s Investor Service, Inc. Screeners are available for stocks, ETFs, mutual funds, fixed income, and for environmental, social, and governance and socially responsible investing (ESG/SRI).
• Extensive educational content: Fidelity makes multiple educational offerings available to its customers in multiple formats, including articles, videos, live and recorded webinars, and infographics. Customers can also speak with professionals with trading experience to discuss their trading ideas as they learn how to invest or trade in various products.
• Top-notch portfolio analysis tools and calculators: Fidelity has many tools and calculators to use against a portfolio or for specific trades. For options, it has calculators to see the probabilities of options trades ending in the money. Fidelity also has calculators for determining investment goals and tracking portfolio results.

Cons Explained

• No access to futures or commodities: Fidelity does not support trading in futures, options on futures, commodities, or currencies, even though you can exchange currencies on the platform. While most Fidelity customers may not have an interest in these products, more active traders may want to trade these markets and would generally prefer to have all their trading products on a single platform rather than needing multiple platforms.
• Accounts are restricted to the US and main island residents: Fidelity accounts are only available to people who are residents of the U.S. or one of its main islands, Guam, Puerto Rico, and the U.S. Virgin Islands.
• High broker-assisted trading fees: The broker-assisted trading fees, at $32.95, are one of the highest in the brokerage industry. Investors and traders looking for broker-assisted trading would be better off looking for brokers that charge less.
• Options fees higher than competitors: Fidelity charges customers $0.65 per options contract traded on both the open and closing sides of the trade, with no cap on the cost. This means you pay commissions on both the open and closing for both legs of multi-leg options trades. Since there are brokers, such as Webull, that don’t charge anything for options, or tastyworks that cap commission and only charge for one side of the trade, high-volume options traders may look elsewhere for options trading.

Usability

It is easy to set up an account at Fidelity following the process that is standard to most brokers: mailing address, Social Security number, employment information, and then account creation. Existing customers can open a new account even quicker and you can have multiple account types with Fidelity for different purposes. Like other brokerage accounts, those looking to trade options or on margin will have to fill out additional forms and receive approval.

There are three platforms available from Fidelity that can be used simultaneously. All platforms provide stock quotes and news, but the web platform does not stream this information in real-time. The basic web-based platform is simpler to use and meets the needs of more passive investors, but it is unlikely to appeal to more active investors and traders. Active investors and traders will lean towards Fidelity’s downloadable trading platform, Active Trader Pro. Active Trader Pro has many more tools and features than the web platform and is highly customizable. Sophisticated traders that want to utilize tools to analyze options, as well as advanced features such as conditional orders, will find all those functions on Active Trader Pro.

The mobile app, available for Android, iOS, Amazon, and Google Assistant-enabled devices, is designed to be similar to Active Trader Pro, but the mobile app does not support fixed-income trading or conditional orders. Overall, navigation is reasonably intuitive across Fidelity’s platforms, although the website has many sub-menus that can take some time for newer users to get used to. Fidelity also has a watch app that allows users to see quote history, and detailed, real-time quotes for stocks, options, ETFs, and mutual funds. The watch app also can provide notifications for orders, including price triggers.

Trade Experience

The trading experience with the Fidelity website is pretty straightforward, and the navigation is intuitive. While there is an option to see streaming quotes on the website, news has to be manually refreshed as it does not stream. While you can set some trading defaults on the website, users will have to re-enter most information for each trade. The web platform supports buy, sell, and stop orders, including trailing stops and market-on-open or close.

Options trading on the web platform is not as strong as other offerings. The platform supports three-leg options strategies, and there is a drop-down that allows the user to select the type of trade, such as spreads, butterflies, condors, strangles, straddles, and spread trades. However, there were no diagrams of the commonly used payout graph. After making the selection on the options trade desired, blank input lines are brought up for each leg created based on the trade type selected. Traders would then have to put all the trade information in manually, whereas other brokers have a more interactive way to change strikes and maturity dates.

The Active Trader Pro platform is much more robust than the web and mobile offerings. The trading platform is customizable, including the ability to personalize the layout. Traders are able to set up trade defaults, create shortcuts, and assign hotkeys for navigation and trade entry. The Active Trader Pro platform works better than the website for options trading, but again, the less automated interface is not as easy to use as what’s available at other brokers. Active Trader Pro and the website both support conditional orders, but the mobile platform still hasn't added this feature. Also, while you can see an open order, you only have the option to cancel the trade and replace it; there was no option to modify the trade, such as changing the price from the open order window.

Mobile Trade Experience

The powerful mobile app is also intuitive. Users can see news and fundamental information about specific securities, and place an order while on the go. The mobile app has some of the same issues as the website, however, such as the less user-friendly option order form outlined for the web platform. The mobile app does not support conditional orders, so you have to use Active Trader Pro or the website for entering these order types. Moreover, drop-down menus for options left all the ticket details for the trader to manually input specifics, such as maturity and strike, directly. This is not as easy to use as other online brokers where the legs are displayed and can be changed by moving the strike on the profitability graph. Although elements of the Active Trader Pro workflow do appear in the mobile app. Fidelity mobile is somewhere in between the web platform and the desktop platform rather than an attempt to mirror the robust desktop platform. It will easily serve the needs of less active investors but isn’t full-featured enough to allow active traders to operate independently of Active Trader Pro.

Range of Offerings

Fidelity offers a good selection of assets, including stocks, ETFs, options, fixed income, mutual funds, and cryptocurrency. Fidelity supports traditional currency exchange, but not forex trading. The mobile app has all the same asset classes as Fidelity's web and Active Trader Pro platforms, with the exception of fixed income. Missing from Fidelity's range of offerings are futures, futures options, and currency trading.

Regarding cryptocurrencies, Fidelity originally launched Fidelity Digital Asset Services for institutional investors and has now opened that platform up to all investors in 2023.

Fidelity's product lineup includes:

• Stocks long and short
• OTCBB (penny stocks)
• Mutual funds (about 3,500 no-load, no transaction fee)
• Bonds: corporate, municipal, treasury, CDs
• Single and up to three leg options strategies
• Robo-advisory integrated Fidelity Go into the website and mobile app
• International (access to 25 countries in 16 different currencies)
• Cryptocurrency: Bitcoin and Ethereum.
• Fractional shares
• Other securities include ETPs, IPOs, foreign ORDs, foreign ADRs, preferred shares, rights, warrants, Treasury Inflation-Protected Securities (TIPS), municipal reset bonds, high-yield corporate bonds, precious metals, and principal-protected notes.

Order Types

Fidelity supports numerous order types, but availability is based on the platform. The mobile app supports only market, limit, stop loss, and trailing stops. The website and Active Trader Pro support conditional orders like one-cancels-the-other (OCO), one-triggers-the-other (OTO), and other conditional orders.

Fidelity also allows traders to trade stocks by share amount or by dollar amount. It is also easy to close a position or roll an options order directly from the positions page. Fidelity's basket trading services allow users to select a customized basket of up to 50 stocks they can monitor, trade, manage, and rebalance as one unit. Account owners also can choose a tax lot preference for their accounts, such as first in, first out or last in, first out, or average cost. They also can select the specific tax lot when closing a position.

Trading Technology

Fidelity has strong trade execution through the use of proprietary smart order routing and Fidelity Dynamic Liquidity Management (FDLM), seeking the best location and price available for customer orders. Fidelity also utilizes its CrossStream, which is an alternative trading system that anonymously matches brokerage clients’ buy- and sell-side orders against the massive order flow from Fidelity.

The average execution speed at Fidelity is 0.05 seconds and 93.35% of trades are price improved; 98.61% of trades fall within the national best bid and offer (NBBO), and the average price improvement for a 1,000-share equity trade is $12.66.

For options, traders can direct orders to any of the eight available exchanges, and order routing can be done through a representative. Fractional share trading in both stocks and ETFs is also supported by Fidelity, and traders are able to trade after the market closes.

Another trading technology offered by Fidelity is the ability to back-test trading strategies with Wealth-Lab Pro. This is a premium offering available to investors in households that place 36 commissionable stock, bond, or options trades in a rolling 12-month period, and that also have an account balance in excess of $25,000.

Costs

Fidelity has ranked highly in our Best for Low-Cost category every year. It offers commission-free online trading in U.S. stocks and ETFs, and there are no account fees or minimums to open a retail brokerage account. Fidelity’s fees are as follows:

• Fidelity charges no commissions for online equity, ETF, options, and OTCBB trades.
• The per-contract options fee is $0.65.
• An order for 50 options contracts is $32.50, but to open and close 50 options contracts would result in costs of $65; you pay on both sides of the trade.
• Mutual fund commissions for funds outside the no transaction fee program are $49.95 on the buy and no charge on the sell.
• Margin interest is 13.575% for accounts with a balance under $25,000; then breakpoints of 13.075% for accounts with a balance under $50,000; 12.125% for balances under $100,000; 12.075% for balances under $250,000; 11.825% for balances under $500,000; 9.50% for balances under $1 million; and 9.25% for accounts with $1 million or more.
• There are no fees for software, inactivity, account closure or transfer, exercise/assignment, domestic wires, checks, or paper statements and trade confirmations.
• Most orders incur exchange fees, typically fractions of a penny per share or contract, which Fidelity passes along to customers.
• Certain mutual fund families, including Vanguard, CGM, Dodge & Cox, and Sequoia funds, are charged $75 on the initial purchase.
• The live broker fee is $32.95 per trade.
• International trades incur various fees, so take a careful look at those commissions before entering an order.

How This Broker Makes Money From You and for You

With fewer brokerages charging commissions these days, it's less obvious how they stay in business. Here are some behind-the-scenes ways Fidelity makes money both from you and for you.

• Interest on cash: Fidelity clients are automatically enrolled in cash sweep programs that pay nominal interest rates. Fidelity makes money from the difference between what it pays you on your idle cash and what it earns on customer cash balances. The automatic enrolment is an advantage to customers, however, as many brokers still do not share any interest on idle cash.
• Margin interest: Fidelity's margin interest rates are below average for the industry, but not as low as brokers that compete on margin as a key feature. The rate is 13.575% for accounts with less than $25,000.
• Payment for order flow (PFOF): Some brokers earn money by accepting payments from market makers for directing equity and options orders to them, in a practice called payment for order flow (PFOF). Fidelity does not accept PFOF for equity trades.
• Stock loan programs: Fidelity earns revenue by loaning stocks in your account for short sales, with your permission, and it shares that income with you. Fidelity has told us that for two months of lending certain hard-to-borrow securities, 38% of accounts earn $100 or less, 37% earn between $100 and $1,000, and the remaining 25% earn more than $1,000.
• Price improvement: On average, equity orders receive $0.0174 per share in net price improvement.
• Portfolio margining: Fidelity clients who qualify can apply for portfolio margining, which computes real-time margin for stock and options trades based on risk instead of fixed percentages.

Account and Research Amenities

Fidelity offers many high-quality amenities or accounts, which you would expect to see from a large broker. The breadth and quality of these features help separate Fidelity from some of its competitors. These amenities include flexible screeners, trade idea generators, charting, access to research and fundamental data, and more.

Stock Screeners

Fidelity’s stock screener has over 140 criteria with customizable values, such as volume, implied volatility, and order flow. In addition, Fidelity has different themes that the user can choose from, including data services, drones, and SRI/ESG scores. The various thematic screens can be further customized by the user, including a recent enhancement that allows users to separate out what happened overnight before regular trading hours begin. Screener results can also be used to create a watchlist.

ETF and Mutual Fund Evaluator

The ETF and mutual fund screeners are superb and consist of 100 criteria to choose from. This screener also has themes the user can select and then further refine. Examples of themes for this screener include market cap, fixed income, or SRI. In addition, Fidelity has also developed the ability to identify ETFs and mutual funds that contain a specific security. As with Fidelity’s other screeners, results can be used to create a watchlist specific to the criteria used with the screener.

Options Screeners

LiveVol powers Fidelity’s option screener. Like Fidelity’s other screeners, users can choose from built-in scans or use their own criteria, such as volume, implied volatility, time spreads, and order flow. There are more than 25 predefined filters in Active Trader Pro, and there are nearly 200 individual criteria that can be incorporated into a search.

Fixed Income Screeners

The screener for fixed income will help users identify a secondary market offering from over 120,000 options to choose from. The yield table will update every fifteen minutes, and clicking a yield value will return all bonds or CDs meeting the criteria selected, such as product type, ratings, and time to maturity. There is also a tool to create a bond ladder to help stagger fixed-income securities.

Tools and Calculators

Fidelity has a comprehensive set of tools and calculators. There are calculators for just about any financial subject, which can be filtered by product, such as 529 plans, annuities, bonds, charitable giving, and exchange-traded funds, to name a few. These tools also can be filtered and chosen by topics, such as estate planning, college planning, retirement, and other life events. There are 38 different calculators available at Fidelity, which are conveniently grouped together on a tools and calculators webpage.

Charting

Charting on the website is straightforward, with the ability to change the type of bar or price indicator, add one or more of more than 70 indicators, and draw trendlines and channels, but there does not appear to be a way to trade directly from the chart. Charting on the mobile app, similar to the offerings of other brokers, is limited by the small screen. Although the mobile app does not allow users to both draw on and trade directly from a price chart, the overall mobile experience is still a step up from that of many other brokers.

Active Trader Pro, a powerful platform, has the best charting of the three platforms, allowing for drawing, indicators, and the addition of a comparison chart. Traders can open a trade ticket directly from the chart, even though these orders do not appear on the chart. Order tickets are automatically created when you click on a specific option. Open orders are not shown on any Fidelity charting method. Active day traders will also appreciate key tools for capturing price inefficiencies, such as the ability to place statistical bands on the volume-weighted average price (VWAP) study.

Trading Idea Generators

Fidelity offers idea generators to help identify potential options trades. The options idea generator can be used to determine trade ideas, and provides users with real-time data on specific trading ideas based on the following criteria entered by the user:

• Bullish, bearish, or neutral sentiment
• Limited, substantial, and unlimited profit potential 
• Limited, substantial, and unlimited risk potentials

Alternatively, the user can pick a specific trading strategy. The idea generator will provide information about the specific trade and its characteristics. In addition to the options idea generator, Fidelity also provides third-party content, including Bulls/Bears of the Day by Zacks Investment Research and technical events from Recognia.

News

Fidelity provides users with news on all its platforms, although only the Active Trader Pro platform shows streaming, real-time news. News sources available on Fidelity include Reuters, PR Newswire, Briefing.com, Business Wire, and Market Wire. News can also be shown for individual stocks or specific market sectors.

Third-Party Research

Fidelity offers a great deal of third-party research for free, including but not limited to I/B/E/S from Refinitiv, Integrity Research Associates, Investars, ISS-EVA, Jefferson Research, McClean Capital Management, MSCI, Recognia, Social Market Analytics, The Hightower Report, Trading Central, Zacks Investment Research, BlackRock, and PIMCO.  Also, there is also MSCI data and standing against peers, as well as other qualitative and quantitative research available. Simply put, there is no shortage of research content on Fidelity.

Cash Management

Clients at Fidelity are automatically enrolled in a cash sweep program, where the customer chooses between a choice of money market mutual funds. While the interest paid on this cash is minimal, at 2.69% as of October 2023, this still compares favorably with many of Fidelity’s peers, since they often don’t pay any interest on cash balances. As U.S. interest rates move higher, the difference between the rate Fidelity pays may become an even more positive differentiator for Fidelity’s cash sweep program.

Fractional Dividend Reinvestment Plan (DRIP)

Fidelity offers its customers the option to enroll in a dividend reinvestment plan that would automatically reinvest dividends into the company. If the dividend is less than what is required for a whole share, a fractional share will be added to the account rather than putting the payout into idle cash. If you choose to sell your holdings, you put the whole share amount in and any fractional shares will be liquidated on settlement.

SRI/ESG Research Amenities

Socially responsible investing (SRI) and environment, social, and governance (ESG) criteria are available as a theme in stock, ETF, and mutual fund screeners. Fidelity also has a number of SRI/ESG funds on its platform and produces a stewardship report that shows Fidelity’s values, process, and commitments to SRI/ESG investing.

Portfolio Analysis

Fidelity’s portfolio analysis tools provide information about a portfolio by giving graphical views of account assets, showing asset allocation and industry weightings, and displaying comparisons of industry sector weightings within your portfolio. Fidelity also offers customers the Fidelity Portfolio Quick Check, which will analyze your portfolio, and help optimize your investment strategy. The tool helps advisors improve outcomes and frees up time.

Education

Fidelity does an excellent job providing its customers with educational materials and delivers that content through articles, videos, webinars, and live events and seminars. Fidelity also provides life-stage planning tools for marriage and divorce, starting a business, a new home, or college costs. In addition, there is also third-party educational content, including courses customers can take. Education topics can be searched with a few keywords.

Fidelity also hosts sessions where you can speak with someone on a “Trading Strategies Desk” to discuss trading questions with an expert in an interactive format. There is an actively managed Reddit community for Fidelity with 36,000 users. Fidelity has also continued to innovate in this space with a TikTok account and an immersive educational experience in the metaverse.

Fidelity also provides users with an extensive glossary of investing terms and a comprehensive frequently asked questions section.

Customer Service

Fidelity has several options for getting in touch with customer service in addition to physical Investor Centers spread across the United States.

• 24/7 phone line
• Online chat with a live agent
• You can talk to a live broker (there is a surcharge for any trades placed via the broker) 
• A chatbot (Fidelity Virtual Assistant)
• Customer support email
• Walk-in branches

Security and Reliability

Fidelity's security is up to industry standards:

• Two-factor authentication is offered on all platforms.
• Higher-risk transactions, such as wire transfers, require two-factor authentication.
• Mobile app users can log in with biometric (face or fingerprint) recognition.
• Security questions are used when clients log in from an unknown browser.
• Fidelity carries excess Securities Investor Protection Corporation (SIPC) insurance with a $1.9 million limit on uninvested cash. According to Fidelity, this is the maximum excess SIPC protection currently available in the brokerage industry.
• Fidelity's Customer Protection Guarantee protects you against losses from unauthorized activity in covered accounts that occur through no fault of your own.
• Fidelity reported no widespread or serious platform outages.

Transparency

Fidelity does a very good job with transparency. For one thing, it does not accept payment for order flow for stocks and ETFs (it does accept payment for order flow on options). Fidelity’s commissions, fees, and margin rates are all very clearly outlined. ETFs and stocks have no commissions or fees and, unlike many brokers, Fidelity has eliminated most of its fees for wire transfers, minimum balances, account closings, and other miscellaneous fees.

Available Account Types

Fidelity has the full range of commonly used accounts and much more. You can open a wide variety of accounts, including:

• Taxable brokerage account
• Rollover individual retirement accounts (IRA) 
• Traditional IRAs
• Roth IRAs
• Inherited IRAs
• Simplified employee pension (SEP) IRA 
• Self-employed 401(k)s, 
• SIMPLE IRAs 
• Custodial accounts 
• 529 accounts 
• Health savings account (HSA) 
• Youth account (these are not custodial accounts, as investment decisions are made by young investors)
• Trust and estate accounts
• Fully managed accounts

Fidelity is also working on a Digital Asset Account where, if a 401(k) plan is approved, participants can direct a portion of their contributions into a digital asset account, which will hold bitcoin. 

The wealth of options can be intimidating, but Fidelity does a great job of grouping the accounts by your goal with the account and provides a concise description of the purpose of the account type. Clicking "Saving & investing for a child" for example, will take you to the custodial, Roth IRA for kids, youth account, and 529 account section. The key features of the accounts are in the description and you can quickly find the right one for you.

Final Verdict

Fidelity continues to be a strong all-around broker and has been our top pick in multiple categories over the past few years. The different technology platforms fit the needs of passive investors who are likely to use the website or mobile app, as well as more active traders who can benefit from the Active Trader Pro platform. Fidelity also has low costs, excellent trade execution, multiple educational offerings, and portfolio analysis tools, as well as robust screeners to help identify opportunities. Thus, Fidelity remains an ideal investment platform for most investors and traders.

Frequently Asked Questions

Is Fidelity trustworthy?

With more than 42 million individual investors, Fidelity continues to maintain great trade executions. It also utilizes a wealth of high-quality research and asset screeners.

Is Fidelity Brokerage good for beginners?

Fidelity provides a wealth of educational content that allows beginners to learn more about investing. This content has continued to adapt with modern technology and the company now offers financial education in the metaverse.

Which is better: Vanguard or Fidelity?

Fidelity offers lower options fees, at $0.65 per contract, while Vanguard charges $1.00 per contract. Additionally, Fidelity has lower index fund expense ratios than Vanguard.

Are Fidelity fees high?

Fidelity's costs are low overall. However, they do have higher broker-assisted trading and options fees than some of their competitors, including Webull and tastyworks.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read. Supporting documentation for any claims, if applicable, will be furnished upon request.

There is an that applies to both option buy and sell transactions. The fee is subject to change.