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Fidelity Bank Review

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by Lauren Perez Updated
Fidelity

Fidelity largely focuses on investing, whether personal, workplace or otherwise. This means that most of its savings accounts below grow according to the various investments within the account, rather than a set interest rate. With investment accounts, you pay a set fee per trade.

Most of these accounts below focus on retirement savings, through IRAs and 401(k)s. Fidelity does offer basic CDs and a basic checking account that you can open. If you are interested in CDs from Fidelity, they grow at high set interest rates regardless of term length. 

Products Offered

Product Key Details
Certificates of Deposit
  • Brokered CDs
  • New issue offerings and secondary market offerings
  • Competitive interest rates
Checking Accounts
  • No ATM fees
  • Overdraft protection available 
IRAs
  • Eight different accounts available, including an IRA for Kids
  • Low to no fees 
401(k)s
  • Self-employed 401(k)s for self-employed workers and owner-only businesses and partnerships
College Savings
  • 529 College Savings Plans
  • Terms and fees will vary by state 

Fidelity Interest Rate Comparison

Fidelity Overview

Fidelity began as Fidelity Management & Research Company in 1946. It expanded its investment products to include 401(k)s by 1982. The following year, the company opened its first Investor Center to make its services more readily available to the everyday customer. Today, the company strives to work with responsibility, integrity, compassion and expertise to make each customer’s investing experience as successful as possible. 

Fidelity Account Features

Fidelity offers a few kinds of savings accounts. There is one type of certificate of deposit, although various term lengths and interest rates are available. The company really shines when it comes to its IRA offerings, with rollover IRAs, IRAs for kids and more. It also offers customers a college savings plan, with easy ways to fund and manage the account.

Fidelity Brokered Certificates of Deposit (CDs)

Key Features Details
Minimum Deposit $1,000
Access to Your CD Online, mobile and physical branches.
Security FDIC insurance up to the maximum amount allowed by law.
Fees None
Current Terms and Rates
  • 3 Month: 1.80% APY
  • 6 Month: 2.00% APY
  • 9 Month: 2.10% APY
  • 1 Year: 2.25% APY
  • 2 Year: 2.75% APY
  • 3 Year: 2.95% APY
  • 5 Year: 3.20% APY

Unlike most bank CDs, Fidelity offers brokered CDs for brokerage firm customers. Brokered CDs can be purchased from multiple banks and held in a single account with Fidelity. Consolidating multiple accounts into one allows for a higher FDIC-insured amount. These brokered CDs can be opened both as new issue offerings and from the secondary market. You won’t pay trading fees to purchase new issue offerings. When you purchase and sell on the secondary market, though, you’ll face a trading fee of $1 per CD. However, trading on the secondary market means the CDs don’t necessarily have to reach maturity for you to access it. 

You will also have access to the Fidelity Auto Roll Program. This program will automatically renew your CDs according to your chosen asset allocation. This program also allows you to withdraw from your CDs without any penalties. This is a huge difference from most bank CDs. You also have the flexibility of selling part of or adding to your funds. You will have to subscribe to Fidelity Alerts, too, which sends periodic alerts about your accounts. If you’re not interested in these features, you can cancel the auto roll program at any time. 

Fidelity Checking Account: Fidelity® Cash Management Account

Key Features Details
Minimum Deposit None
Access to Your Checking Account Online, mobile and physical branches.
Security FDIC insurance up to the maximum amount allowed by law.
Fees 1% foreign transaction fee 

The Fidelity® Cash Management Account is the company’s take on a checking account. It comes with all the features of a checking account like a free debit card, check-writing abilities and bill pay benefits. You also have access to Fidelity Mobile® where you can deposit checks and pay bills. You can also easily transfer money from your Fidelity® Cash Management Account to your Fidelity brokerage account at any time. 

A huge advantage to the Fidelity® Cash Management Account is your widespread access to thousands of ATMs worldwide. You won’t pay any fees for Fidelity ATM usage. Plus, you will be reimbursed for all the non-Fidelity ATM fees you pay with your Fidelity Visa® Gold Check Card, as long as the ATM displays the Visa®, Plus® or Star® logos. 

Fidelity® Cash Management Account includes the Fidelity Cash Manager, a feature that helps you move your money around in the most optimal ways. For one, when you need cash to spend, you can dip into your investments and transfer those funds to your Fidelity® Cash Management Account. To the opposite, you can receive alerts when you have some extra money in your account so you can quickly invest it. This program also includes overdraft protection to allow any available funds to be transferred to your Fidelity® Cash Management Account to avoid an overdraft. 

Fidelity IRAs: Traditional IRA, Roth IRA, Roth IRA for Kids

Key Features Details
Minimum Deposit None, although certain investments require a minimum initial investment.
Access to Your IRA Online, mobile and physical branches.
Security FDIC insurance up to the maximum amount allowed by law.
Fees
  • No account maintenance fees
  • $4.95 for online U.S. equity trades

Fidelity offers both traditional and Roth IRA accounts, which provides two different tax advantages when it comes to retirement savings. You fund a traditional IRA with pre-tax funds, lowering your current taxable income. However, this means that your withdrawals in retirement will be subject to taxation. Roth IRAs work in the opposite way, being funded with after-tax funds. Then, when you take withdrawals in retirement, you don’t have to worry about losing any of that to taxes. Roth IRAs tend to benefit those who expect to be in a higher tax bracket in retirement. 

Fidelity furthers its IRA benefits by waiving an account maintenance fee and a minimum balance requirement. This opens up retirement savings to even more customers. You will face a $4.95 fee, though, for the online U.S. equity trades that come with investing. 

These IRAs will be filled with a wide range of funds that include stocks, bonds, ETFs and CDs. You will also be able to help choose the funds that go into your accounts rather than allowing the institution to manage it completely. 

To open a Fidelity traditional IRA, you must be less than 70 ½ years of age and have employment compensation. This is because you must start taking required minimum distributions (RMDs) from your traditional IRAs at that age. You should also be aware of IRA contribution limits. Those limits regulate how much money you can place in an IRA in a year. If you disregard the limitations, you can end up facing a penalty. 

Because of their differences, you do not have to take RMDs from a Roth IRA. Thus there is no age limit requirement to open a Fidelity Roth IRA. You must have employment compensation, however, and must meet income requirements. 

Fidelity also offers customers a Roth IRA for Kids. These accounts are managed by adults, but are technically owned by the minor under the age of 18. The adult can be anyone from the minor’s parent to a family friend as long as they are over the age of 21. The minor must have qualified earned income in order to have the account and contribute post-tax funds. This earned income can be anything from an after school job to babysitting to shoveling snow. The contributions made to a Fidelity IRA for Kids may not exceed the minor’s earnings.

Again, Roth IRA withdrawals are typically tax-free. Having a Fidelity Roth IRA for Kids comes with the added bonus of the ability to make penalty-free withdrawals for qualified higher education expenses or up to $10,000 for a first-time home purchase. Once the minor reaches the required age (check your state’s age), the account’s assets will be transferred. 

You will always have online and mobile access to your accounts. Once you’re logged into your account, you can make contributions, transfers and withdrawals as you like. There, you can see your investment performance to track and analyze your returns. You can also change your online settings like direct deposits and account alerts. Plus, you have access to resources, tools and customer service representatives to help you understand your investments and make more educated investment decisions. 

Fidelity IRAs: Rollover IRA

Key Features Details
Minimum Deposit $2,500
Access to Your IRA Online, mobile and physical branches.
Security FDIC insurance up to the maximum amount allowed by law.
Fees
  • No annual fee
  • $4.95 for online U.S. equity trades

If you’re changing jobs or retiring, you may want to rollover your 401(k) funds into an IRA. You can also rollover multiple IRAs into a Fidelity Rollover IRA. Rolling over retirement funds into one account offers the opportunity to optimize your savings and tax advantages. Plus, it will make tracking your savings and investments much easier when they’re all in one place. 

A Fidelity Rollover IRA will also fund your account with a range of Fidelity and non-Fidelity funds, stocks, bonds, ETFs and CDs. You will have the ability to help choose these investments. You will also have access to a number of resources and tools to manage your money. 

To roll over your account(s), Fidelity provides a rollover assistant and financial specialists to make the process easier. First, you’ll have to choose the type of IRA that works for you, whether a traditional or a Roth IRA. Then the Fidelity Rollover Tracker tool will help you work with your previous account manager to transfer the funds. You’ll then receive an alert when your account is ready so you can start choosing your investments. 

Once your account is set up, you cannot withdraw any funds before the age of 59 ½. There are exceptions for some first-time home purchases and educational expenses. You must start taking required minimum distributions (RMDs) by age 70 ½. 

Fidelity IRAs: Inherited IRAs and Inherited Roth IRAs

Key Features Details
Minimum Deposit None
Access to Your IRA Online, mobile and physical branches.
Security FDIC insurance up to the maximum amount allowed by law.
Fees
  • No account maintenance fees
  • Only $4.95 for online U.S. equity trades

If you’re inheriting funds in the form of an IRA, you may want to move those assets into a singular Inherited IRA. Fidelity offers both inherited IRAs and inherited Roth IRAs. Your account and investment options will depend on your relationship to the original owner.  Either way, this move could be a good way to consolidate your funds and optimize any tax advantages. 

Both types of inherited IRAs offer a wide range of funds, stocks, bonds, ETFs and CDs. You will also have access to Fidelity Inheritor Services specialists to answer your questions and help manage your assets and accounts. Plus, your earnings will grow federal income tax-deferred or tax-free. 

These inherited accounts do have required minimum distributions (RMDs). RMDs are the minimum amounts you need to start withdrawing at a certain age. These factors are determined by your age, the deceased’s age at the time of death, your relationship to the deceased and more. Typically, you should expect to start taking this distributions by December 31 of the year following the date of death. If you miss taking a RMD, you’ll face a penalty. Fidelity does provide automatic withdrawal services, though, to calculate your annual RMD and to process the distribution. Outside of RMDs, you will not face any tax penalties on withdrawals at any age. You cannot roll withdrawals back into the account later. 

You can open both account types online unless you are a charity, organization, estate or trust beneficiary. If you are the spouse of the deceased account holder, you can also move the assets into your own Fidelity IRA. You will have to call Fidelity Inheritor Services at 800-544-0003 to find out the specific steps for your situation.

It can also help to give them a call since there are rules and deadlines surrounding the time you can open an inherited IRA. For one, if you’re not the only beneficiary of an inheritance, you’ll have to set up the assets in an inherited IRA by December 31 of the year following the IRA owner’s date of death. Also, if you don’t want the inheritance assets, you have to disclaim them within nine months of the date of death of the original owner. 

Fidelity IRAs: SEP IRA and SIMPLE IRA

Key Features  Details
Minimum Deposit None
Access to Your IRA Online, mobile and physical branches.
Security FDIC insurance up to the maximum amount allowed by law.
Fees
  • SEP IRA: $4.95 per online U.S. equity trade will apply
  • SIMPLE IRA: $350 per plan collected annually from the employer OR $25 per participant collected annually from participants' accounts

Both SEP IRAs and SIMPLE IRAs offer tax-advantage retirement savings for those who are self-employed or own a small business. They offer tax-deferred growth potential and, for employers, a business tax deduction for the contributions. Contributions to SIMPLE IRAs are made with pre-tax funds. 

When you open either account type, you’ll have access to a wide range of Fidelity and non-Fidelity funds, stocks, bonds, ETFs and CDs. You’ll also have the opportunity to help choose the funds that go into your accounts. You’ll also have access to research, tools and retirement specialists to help you manage your money. 

Opening a Fidelity SEP IRA offers a ton of flexibility from flexible annual funding requirements to a variety of investments to choose from to the ability to contribute online, by phone or by mail. A SEP IRA also allows you the abilities to increase, decrease or skip annual employer contributions. This makes it less of a burden for small businesses and self-employed workers. Plus, employer contributions are tax-deductible. 

Contributions to a SEP IRA must be made by the employer. If you’re self-employed, that’s you. This also includes sole proprietors, business owners and business partners who provide services.  Employer contributions can range from 0% - 25% and each employee must receive the same percentage. Again, it’s important to be familiar with each year’s contribution limits so you don’t accidentally incur a penalty. You will have to start taking required minimum distributions (RMDs) beginning at age 70 ½. Withdrawals before the age of 59 ½ will incur a penalty of 10%. 

SIMPLE IRAs focus on retirement savings for self-employed individuals and participants in small businesses with fewer than 100 employees. One way that SIMPLE IRAs differ from SEP IRAs is that you fund a SIMPLE IRA with pre-tax contributions. Another way is each IRAs customer eligibility. To qualify for a SIMPLE IRA, employers must have 100 or fewer employees who earned at least $5,000 in the preceding year. Employers also must not have any other employer-sponsored retirement plan. Additionally, participants must have earned at least $5,000 from that employer in any two of the preceding years and expect to receive that in the current year. 

Employers must contribute a 3% contribution matching the employee’s or 2% non-elective contribution. In turn, employees can contribute up to 100% of their compensation. Again, you must start taking RMDs starting at age 70 ½. Any withdrawals before the age of 59 ½ will meet a 10% early withdrawal penalty, or 25% within the first two years of the account. 

Fidelity Self-Employed 401(k)

Key Features Details
Access to Your Account Online, mobile and physical branches.
Security FDIC insurance up to the maximum amount allowed by law.
Fees None

If you’re self-employed, you don’t have access to an employer-sponsored retirement plan like a 401(k). However, there are options out there like a self-employed 401(k). These accounts are made for self-employed workers and owner-only businesses and partnerships who wouldn’t normally have access to a traditional 401(k). 

As pre-tax money, your self-employed 401(k) contributions are tax deductible. You can contribute up to 25% of your compensation. If you own an unincorporated business, you can deduct the contributions for yourself from your personal income. If you own an incorporated business, you can generally deduct the contributions as a business expense. Once in the account, the funds will grow tax-deferred within the account. However, this means that the withdrawals you make during retirement will be taxable. 

As with all other Fidelity retirement accounts, your Fidelity self-employed 401(k) will have access to a wide variety of mutual funds, stocks, bonds, ETFs and CDs. You will also have access to investing and retirement specialists to help you manage your accounts and assets. Again, once you have an account, you must start taking RMDs at age 70 ½. Any withdrawals before the age of 59 ½ will incur a 10% early withdrawal penalty.

Fidelity College Savings: Fidelity 529 College Savings Plans

Key Features Details
Minimum Deposit Varies by state plan
Access to Your Account Online, mobile and physical branches.
Security FDIC insurance up to the maximum amount allowed by law.
Fees Varies by state plan

You also have the option of opening a college savings plan here in the form of the Fidelity 529 College Savings Plan. The savings you accumulate in a 529 account can be used for education expenses like tuition and room and board. Most accredited two- and four-year colleges and universities, U.S. vocational-technical schools and foreign institutions qualify for 529 plan usage. 

The funds in a 529 plan grow federal income tax-deferred. You may also be able to claim them as state tax deductions. Plus, when you start making withdrawals for qualified higher education expenses, you won’t face federal income tax on those funds. 

Fidelity offers an added way to save in your 529 plan with the Fidelity Investments 529 College Rewards® Visa Signature® Card. Using this card can earn you cash back and help you save for your or a child’s college fund. You also have free access to the Fidelity College Gifting program. This provides a webpage for family and friends to contribute a monetary gift to your 529 plan. You’ll also have dashboard access to your Gifting page, shown here, to track progress and manage its settings. 

529 plans are sponsored by a state or state agency. Not all states will have a 529 plan. You’ll want to double check the specifics of your state plans, since each state will determine the plan’s required minimums and fees.

Where Can I Find Fidelity?

You can find Fidelity online at www.fidelity.com, on the Fidelity Mobile® app or at your local branch. The company’s physical branches, called investor centers, can be found in 39 states. 

What Can You Do Online With Fidelity?

You can do a lot online with Fidelity. You can open a number of accounts, from the ones detailed above to credit cards and other investing accounts. The institution also offers financial planning resources, advice and tools to help visitors understand their finances. For one, you can take a five minute financial checkup right from their homepage to see how you’re doing financially. You can also use a tool to find out your retirement score to better prepare for your golden years. 

Fidelity also offers a unique feature called guest access. If you want an insider’s look at what it’s like to have an account with the company, you can sign up for 30 days of free guest access. This provides the resources, tools and features that customers get. 

Once you have your account(s), you can easily log in from the homepage. Plus, you can access all your cash and investing balances and transactions in one place. 

How Do I Access My Money?

You can access your funds online, on the Fidelity Mobile® app, over the phone or at one of many Investor Centers. To access your accounts online and on mobile, you’ll need to log in with your username and password. When you call customer service or visit a location, you’ll need to provide account information for security purposes. An example of the bank's Cash Management Account card is shown here. You can use your cards at ATMs and at Investor Centers. 

How Can I Save More Money With a Fidelity Account?

Fidelity specializes in investing accounts, which means that your savings accounts can earn more through well-balanced investment portfolios. Plus, you’ll rarely face maintenance fees for having an account. You can also save when you have a Fidelity® Cash Management Account, since you don’t have to pay any ATM fees. 

You can save more when you have a Fidelity CD account, as well, since each term length carries a competitive rate. 

What’s the Process for Opening an Account With Fidelity?

To start the process of opening a Fidelity account, you simple have to click an “Open an Account” button on the account’s page. Opening an account will typically take a few minutes. If you’re already a Fidelity customer, the process can go by even faster since your information will already be saved. If not, you’ll start by providing your name and email. 

You’ll then have to provide more personal information including your Social Security number, date of birth, legal address and employment information. To begin funding your new account, you’ll need to provide your bank account’s routing and account numbers or another brokerage account number and account type. 

You can also choose to visit an Investor Center or call Customer Service to open an account.

What’s the Catch? 

The catch with Fidelity is that its accounts focus on growing money through investing. If you’re looking to deposit a sum of money and watch it grow at a set interest rate, you won’t find that here. 

While the CD rates are set, you should still review your account agreements to make sure you’re opening an account at the terms you want. Additionally, Fidelity’s CDs are brokered. This results in lower yields, interest rate fluctuation, credit risk, issuer insolvency and selling before maturity.

Bottom Line

Fidelity offers a number of savings accounts by way of investment portfolios. While you cannot find a basic savings account here, you can find multiple IRAs, a unique checking account, CDs and a college savings plan. Fidelity will also provide each account with a wide variety of investments to choose from. Plus, you have a say in the funds that are placed in your accounts, making you a more active participant in your savings. 

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Best Places to Save

SmartAsset’s interactive map highlights the places in the country where people have the opportunity to save money. Zoom between states and the national map to see the best places to save.

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Rank County Median Household Income Cost of Living Purchasing Power Estimated Tax Rate

Methodology Where you live can have a big impact on how easy it is to save money based on several regional factors. Our study aims to find the most suitable places for people to save based on median household income, average living expenses and income tax burden.

First, we calculated the average cost of living in each county for a household with two adults (one working). We then created a purchasing power index for each county. This reflects the counties with the highest ratio of household income to cost of living.

To better compare income tax burdens across counties, we applied relevant deductions and exemptions before calculating federal, state and local income taxes for a family making $50,000 annual income in each location. Next, we created an effective tax rate index for each county, which reflects the counties with the lowest ratio of income taxes to the assumed $50,000 annual income.

Finally, we calculated the weighted average of the indices to yield an overall best places to save score. We used a three-fourths weighting for purchasing power and a one-fourth weighting for tax rates. We indexed the final number so higher values reflect places that are better to save.

Sources: US Census Bureau 2016 5-Year American Community Survey, MIT Living Wage Study