At a Glance
Rating Breakdown
Performance Overview
Scores out of 5, based on our editorial analysis
About Fidelity
Fidelity Investments manages $12.6 trillion in client assets, making it the largest brokerage in the world by AUM. It is also privately held by the Johnson family, which means no quarterly earnings pressure from public shareholders demanding higher revenue from client fees. This structural advantage explains Fidelity's pricing: zero-expense-ratio index funds (FZROX, FZILX, FZIPX), the industry's highest money market yields paid automatically through their sweep, and no revenue from payment for order flow on equity trades. When Fidelity launched zero-fee index funds in 2018, it was a competitive move that only a privately held firm could sustain -- the short-term revenue loss would have destroyed a public company's stock price. Fidelity's FZROX (Zero Total Market Index) and FZILX (Zero International Index) charge literally 0.00% in fund expenses. There is no catch, no hidden fee, no minimum investment. The funds track proprietary Fidelity indices (not the standard S&P or MSCI benchmarks) to avoid licensing fees, which is how they achieve zero cost. In practice, FZROX has tracked the total U.S. stock market within 0.02% of Vanguard's VTI (0.03% expense ratio) since inception. The difference is negligible but the psychology is powerful: paying nothing feels different from paying a little. Two areas where Fidelity falls slightly behind: the active trading platform (Active Trader Pro) is decent but not at thinkorswim's level, and Fidelity's branch network (200+ locations) is half the size of Schwab's (400+). For most long-term investors, neither of these gaps matters. The combination of zero-fee index funds, automatic high-yield cash sweep (SPAXX at 4.5%+), fractional shares on any stock, and $0 commissions makes Fidelity the empirically cheapest place to invest in the United States. No other broker can match all four simultaneously.
Key Features
Zero Expense Ratio Index Funds
FZROX (Total Market), FZILX (International), FZIPX (Extended Market), and FZTXX (Treasury Money Market) charge 0.00% in fund expenses. No minimum investment. These funds are available only at Fidelity and cannot be transferred to another brokerage -- you must sell them before transferring, creating a taxable event in non-retirement accounts. This lock-in is the only meaningful trade-off for the zero-fee structure.
Automatic Cash Sweep to SPAXX
Fidelity's default cash sweep (SPAXX, Fidelity Government Money Market Fund) currently pays 4.5%+ APY, significantly higher than Schwab's 0.45% default sweep. This is the single biggest structural advantage Fidelity has over Schwab: your uninvested cash earns market rates automatically with no action required. On $20,000 in cash, this is $900/year at Fidelity vs. $90/year at Schwab.
Fractional Shares on Any Stock or ETF
Fidelity allows fractional share purchases starting at $1 for any stock or ETF they offer. Unlike Schwab's Stock Slices (limited to S&P 500 companies), Fidelity's fractional shares cover the entire equity universe. This makes dollar-cost averaging into high-priced stocks practical for any account size. Fractional positions at Fidelity can be transferred to another brokerage, which is not the case at all competitors.
Youth Account (Ages 13-17)
Fidelity's Youth Account is a brokerage account owned by a minor (not a custodial UGMA/UTMA), with parental oversight. Teens can trade stocks, ETFs, and Fidelity mutual funds with no commissions. Parents monitor activity and set guardrails. This is genuinely unique -- most brokers only offer custodial accounts where the parent, not the child, owns the assets and makes trading decisions.
How It Works
Open Your Account
Online application takes 5-10 minutes. $0 minimum. Available account types include individual, joint, IRA (all types), trust, estate, custodial, and youth accounts. If your employer offers a Fidelity 401(k), you can link it to your personal Fidelity accounts for a consolidated view.
Fund via ACH or ACAT
ACH transfer from a linked bank account (free, 1-2 business days). ACAT transfer from another brokerage (free, 5-7 business days). Fidelity frequently reimburses transfer-out fees from competitor brokerages for accounts over $25,000.
Build Your Core Portfolio
For passive investing, a two-fund portfolio of FZROX (U.S. total market, 0.00%) and FZILX (International, 0.00%) provides global diversification at zero cost. Add FXNAX (U.S. Bond Index, 0.025%) for bond exposure. This three-fund portfolio has a blended expense ratio of approximately 0.01% -- the cheapest possible diversified portfolio at any brokerage.
Verify Cash Sweep is SPAXX
Confirm your core position (cash sweep) is set to SPAXX (Fidelity Government Money Market Fund) in your account settings. This should be the default for new accounts, but verify -- some accounts opened through employer 401(k) rollovers may default to a lower-yielding option.
Set Up Automatic Investments
Configure recurring purchases of your chosen funds or stocks on a weekly, bi-weekly, or monthly schedule. Fidelity's automatic investment feature works with mutual funds and fractional shares of stocks/ETFs. Combine with direct deposit into your Fidelity Cash Management Account for a fully automated investing pipeline.
What They Do
- Stock & ETF Trading ($0)
- Options Trading ($0.65/contract)
- Mutual Funds (3,500+ no-fee)
- Fixed Income
- Zero-Fee Index Funds
- Fidelity Go (Robo-Advisor)
- Wealth Management
- Cash Management Account
- Youth Account
- HSA
- 529 Plans
- Crypto Trading (BTC, ETH)
Debt Types They Take On
- Individual Brokerage
- Joint
- Traditional IRA
- Roth IRA
- SEP IRA
- SIMPLE IRA
- Rollover IRA
- 529 Plan
- Custodial (UGMA/UTMA)
- Youth Account
- Trust
- HSA
Fee & Cost Structure
Regulatory & Trust
Review Summary
Notable Case Studies
Zero-Fee Index Fund Portfolio for Maximum Savings
A 30-year-old opened a Fidelity Roth IRA and invested $500/month split 80% FZROX (U.S. total market, 0.00%) and 20% FZILX (international, 0.00%). Total annual fund expenses: $0.00. Trading commissions: $0. Account maintenance fees: $0.
Cash Sweep Advantage Over Schwab
An investor maintained $50,000 in uninvested cash across their brokerage accounts while waiting to deploy it into the market over several months. At Fidelity, the SPAXX sweep paid 4.52% APY automatically. At Schwab, the default sweep paid 0.45%.
Fractional Shares for Dollar-Cost Averaging
A new investor wanted to buy shares of Amazon ($180/share), Berkshire Hathaway B ($380/share), and several other high-priced stocks with $200/month total budget. Fidelity's fractional shares allowed purchases as small as $1.
Pros & Cons
Pros
- Zero-expense-ratio index funds (FZROX, FZILX) are the cheapest investment products in existence -- no other broker can match 0.00%
- SPAXX cash sweep at 4.5%+ APY is dramatically higher than Schwab's 0.45% default -- your uninvested cash earns market rates automatically
- Privately held company with no public shareholder pressure to extract revenue from clients through hidden fees or monetization of order flow
- Fractional shares available on any stock or ETF starting at $1 -- broader coverage than Schwab's S&P-500-only Stock Slices
- $12.6 trillion in client assets makes Fidelity the largest brokerage by AUM, providing institutional stability and scale
Cons
- Active Trader Pro platform is functional but noticeably behind thinkorswim for options analytics and custom scanning
- Zero-fee index funds (FZROX, FZILX) cannot be transferred to another brokerage -- selling creates a taxable event in non-retirement accounts, creating mild lock-in
- 200+ investor centers is a smaller physical presence than Schwab's 400+ -- less convenient for in-person help depending on your location
- Crypto trading is limited to Bitcoin and Ethereum -- no altcoin access, unlike Coinbase (250+) or Robinhood (20+)
User Reviews (10)
Youth account for my teenager
Set up a Youth Account for my 15 year old son. He buys fractional shares of companies he likes with his birthday money. I can see everything he does. Great way for him to learn about investing with real money. He already understands more than most adults.
HSA is underrated
Fidelity's HSA is the best in the industry. No fees, you can invest in anything (including FZROX), and the contributions are triple tax advantaged. If your employer lets you pick your HSA provider, pick Fidelity.
Zero fee funds are incredible
Literally paying 0.00% to own the entire stock market. I keep waiting for the catch but there isn't one. Been using FZROX for 3 years and it tracks perfectly.
Switched from Vanguard
Vanguard's website was so bad I couldn't take it anymore. Moved everything to Fidelity. Better app, better website, same quality index funds, and FZROX is literally free. The ACAT transfer took 6 days and was painless.
SPAXX is so much better than Schwab sweep
Had cash at Schwab earning 0.45%. Moved it to Fidelity where SPAXX pays 4.5%. Same money. 10x more interest. I don't understand how Schwab gets away with their sweep rate.
Best broker. Period.
FZROX costs nothing. SPAXX pays me 4.5% on cash. $0 commissions. Fractional shares on anything. I honestly don't understand why anyone uses Schwab or Vanguard anymore. Fidelity wins on every metric that matters.
Website feels dated
The Fidelity website looks like it was designed in 2010. Navigation is confusing, finding specific account features takes too many clicks, and the mobile app is better than the desktop site which shouldn't be the case. The investing itself is great but the user experience needs work.
Great for investing, meh for trading
For buy and hold Fidelity is unbeatable. But Active Trader Pro is clunky compared to thinkorswim. If you actively trade options, Schwab or E*TRADE are better. For everything else, Fidelity.
ok
Good broker. No complaints. Use it for my IRA.
LOCKED OUT FOR 2 WEEKS DURING A CRASH
Account got locked due to a "security concern" during a market correction. Couldn't log in. Couldn't trade. Couldn't even call because wait times were over an hour. By the time I got back in, the positions I wanted to adjust had already moved. Lost money because of their security system being too aggressive. A security feature that prevents you from accessing your own money when you need it most is not a feature, it's a bug.
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Important Investing Disclaimers
- All investing involves risk, including loss of principal. Past performance does not guarantee future results. Returns and yields quoted are historical and not indicative of future performance.
- Brokerage accounts are not FDIC insured. Securities held in brokerage accounts are protected by SIPC up to $500,000 (including $250,000 for cash claims). SIPC does not protect against market losses.
- Robo-advisor and managed account performance depends on market conditions, asset allocation, and individual circumstances. Advertised returns reflect backtested or historical model performance and may not reflect actual client returns after fees.
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