Fidelity Investments is one of the largest and most well-known financial services companies in the world. With over $2.46 trillion in assets under management, it is a trusted name for investors looking to grow their wealth. But with so many investment options and services offered by Fidelity, it can be overwhelming for beginners or even experienced investors to understand where to start. In this article, we will take a deep dive into the number to Fidelity Investments and everything you need to know to make informed investment decisions.
Understanding the Different Types of Accounts at Fidelity
Fidelity offers a wide range of investment options, including individual retirement accounts (IRAs), 401(k) plans, brokerage accounts, and more. Let’s take a closer look at each type of account and what they offer.
Individual Retirement Accounts (IRAs)
An IRA is a type of retirement account that allows individuals to save for their retirement while receiving tax benefits. There are two types of IRAs offered by Fidelity: Traditional and Roth.
Traditional IRA
A traditional IRA allows individuals to contribute pre-tax dollars, meaning that they do not pay taxes on the money until they withdraw it in retirement. This can be advantageous for those who expect to be in a lower tax bracket during retirement.
Contribution Limits and Eligibility
For 2021, the contribution limit for a traditional IRA is $6,000, with an additional $1,000 “catch-up” contribution allowed for individuals aged 50 and older. However, there are income limits for contributing to a traditional IRA. For single filers, the modified adjusted gross income (MAGI) must be less than $125,000, and for married joint filers, it must be less than $198,000.
Roth IRA
A Roth IRA, on the other hand, allows individuals to contribute after-tax dollars, meaning that they pay taxes on the money upfront. However, withdrawals in retirement are tax-free, making it a popular option for those who anticipate being in a higher tax bracket during retirement.
Contribution Limits and Eligibility
The contribution limits and eligibility requirements for a Roth IRA are the same as a traditional IRA. However, there is an income limit of $140,000 for single filers and $208,000 for married joint filers for contributing to a Roth IRA in 2021.
401(k) Plans
A 401(k) plan is an employer-sponsored retirement account that allows employees to contribute a portion of their salary towards retirement savings. Fidelity offers both traditional and Roth 401(k) plans, with similar contribution limits and eligibility requirements as mentioned above for IRAs.
Brokerage Accounts
Fidelity’s brokerage accounts allow individuals to invest in a wide range of securities, including stocks, bonds, mutual funds, and more. These accounts do not have any tax benefits but offer the flexibility to manage investments and access them at any time.
Portfolio Management Options
Fidelity offers various portfolio management options for investors looking for expert guidance in managing their investments. These include:
- Fidelity Go: This is a robo-advisor service that utilizes algorithms to build and manage a personalized investment portfolio based on your goals and risk tolerance.
- Fidelity Personalized Portfolios: This service pairs you with a dedicated financial advisor who will work with you to create a custom investment plan and manage it for you.
- Fidelity Wealth Management: This is a comprehensive wealth management service for high-net-worth individuals, offering personalized financial planning and investment management.
How to Open an Account with Fidelity
Now that you understand the different types of accounts and services offered by Fidelity, let’s take a look at how to open an account.
Online Account Opening
Fidelity offers a convenient and straightforward process for opening an account online. You can start by visiting their website and clicking on the “Open an Account” button. From there, you will be prompted to create a login and password, after which you can choose the type of account you want to open.
Paper Application
If you prefer to open an account through paper application, you can download the forms from Fidelity’s website, fill them out, and mail them to the address provided on the form.
Funding Your Account
Once your account is open, you will need to fund it to start investing. Fidelity allows you to fund your account through various methods, including bank transfer, check, wire transfer, or rollover from another retirement account.
Frequently Asked Questions About Fidelity Investments
1. Is it safe to invest with Fidelity?
Yes, Fidelity is a reputable financial services company with a long history of success and customer satisfaction. They also have measures in place to protect investors’ assets, such as SIPC insurance and advanced security measures.
2. What is the minimum amount required to open an account with Fidelity?
The minimum amount to open an account varies based on the type of account and service you choose. For example, the minimum for a brokerage account is $2,500, while the minimum for a Fidelity Go account is $10.
3. Can I access my investments at any time with Fidelity?
Yes, Fidelity’s brokerage accounts offer the flexibility to buy and sell securities at any time. However, there may be fees and taxes associated with early withdrawals from retirement accounts.
4. Does Fidelity offer any educational resources for investors?
Yes, Fidelity offers a wealth of educational resources, including articles, videos, webinars, and more, to help investors make informed decisions about their finances.
5. Are there any fees associated with investing with Fidelity?
Fidelity’s fees vary depending on the type of account and services you choose. For example, there are no annual fees for a brokerage account, but there may be management fees for portfolio management services.
Conclusion
When it comes to investing, having a trusted partner like Fidelity can make all the difference. With a range of account options, expert portfolio management services, and educational resources, Fidelity is an excellent choice for investors looking to grow their wealth and secure their financial future. By understanding the different types of accounts and services offered by Fidelity, as well as how to open an account and fund it, you can confidently start your investment journey with this reputable company.