Investing in mutual funds is one of the easiest ways to build long-term wealth, and Fidelity makes the process simple even for complete beginners. Whether you are investing a few dollars or building a large portfolio, understanding how to buy and sell mutual funds on Fidelity can help you make better decisions and avoid costly mistakes.
In this guide, you’ll learn how to place your first order, evaluate a fund, understand expense ratios, and discover some popular Fidelity funds that many investors consider for long-term growth.
Why Investors Choose Mutual Funds on Fidelity
Many investors prefer mutual funds on Fidelity because of the low fees, no minimum investment requirements on many funds, and easy-to-use platform. Fidelity offers index funds, international funds, dividend funds, and even zero-expense-ratio funds that are unique to the brokerage.
One of the biggest advantages is that you can start investing with as little as $1 and buy fractional shares automatically through dollar-based investing.
How to Search for Mutual Funds on Fidelity
Finding mutual funds on Fidelity starts with the search feature.
- Open the Fidelity app.
- Tap “Transact” at the bottom of the screen.
- Select the search icon or magnifying glass.
- Enter the ticker symbol of the fund you want to purchase.
- Tap the fund when it appears.
For example, the Fidelity 500 Index Fund uses the ticker symbol FXAIX.
A ticker symbol is simply a short code representing an investment. Stocks, ETFs, and mutual funds all have ticker symbols that make them easy to find.
Understanding a Fund Before You Buy
After selecting a fund, you’ll see important information including:
- Current price
- Performance chart
- Historical returns
- Detailed quote information
- Expense ratio
- 52-week range
One useful feature Fidelity provides is hypothetical growth. This allows investors to see how a $10,000 investment would have performed over different time periods.
Although past performance never guarantees future results, historical data can provide perspective on how a fund has performed through different market conditions.
Why Expense Ratios Matter
Before buying mutual funds on Fidelity, it is important to understand expense ratios.
The expense ratio is the annual fee charged for managing the fund. Even small differences can have a significant impact over decades because fees compound over time.
For example, the Fidelity 500 Index Fund (FXAIX) charges an expense ratio of only 0.015%. That means a $1,000 investment costs just 15 cents annually in management fees.
Low-cost funds allow investors to keep more of their returns over the long run.
How to Place Your First Order
Buying mutual funds on Fidelity is straightforward.
Step 1: Tap the Trade Button
After opening the fund page, select the green “Trade” button.
You’ll see two options:
- Buy recurring
- Buy
Recurring purchases allow automatic investing weekly, biweekly, or monthly. For a one-time purchase, select “Buy.”
Step 2: Enter Your Investment Amount
Unlike stocks, many Fidelity index funds allow dollar-based investing.
You don’t need enough money to buy an entire share. If one share costs $250, you can still invest $5 or even $1.
Simply enter the dollar amount you want to invest.
Step 3: Preview the Order
Select “Preview” to review:
- Account information
- Fund ticker
- Dollar amount
- Purchase details
Once everything looks correct, tap “Place Order.”
How Mutual Funds Work Differently from ETFs
One major difference between mutual funds and ETFs is pricing.
Mutual funds only receive a new price once per day after the market closes. That means your order executes at the next available closing price rather than instantly.
Because of this, your purchase may not appear immediately in your account. Typically, orders settle after market close and become visible the following day.
Best Mutual Funds on Fidelity for Beginners
Many investors keep their portfolios simple with just a few funds.
FXAIX: Fidelity 500 Index Fund
FXAIX tracks the S&P 500 and provides exposure to 500 of America’s largest companies.
Its low expense ratio and broad diversification make it a popular core holding.
Major companies include:
- Apple
- Microsoft
- Nvidia
- Amazon
- Alphabet
FSKAX: Fidelity Total Market Index Fund
FSKAX expands beyond the S&P 500 by including thousands of companies across the U.S. stock market.
This gives exposure to large-cap, mid-cap, and small-cap stocks.
FTIHX: Fidelity Total International Index Fund
FTIHX offers international diversification by investing in companies outside the United States.
It includes businesses from Europe, Japan, and emerging markets, helping investors diversify globally.
Zero Expense Ratio Funds
Fidelity also offers several unique funds with no management fees:
- FZROX
- FNILX
- FZILX
These funds charge a 0% expense ratio. However, they are exclusive to Fidelity and cannot be transferred to another brokerage without selling.
For retirement accounts such as Roth IRAs, they can be particularly attractive.
Understanding the Exchange Feature
When viewing mutual funds on Fidelity, you’ll notice three options:
- Buy
- Sell
- Exchange
Exchange allows investors to move money directly from one Fidelity mutual fund to another.
However, an exchange still counts as a sale in taxable accounts. If gains are involved, taxes may apply just as they would with a normal sale.
Therefore, exchange should not be viewed as a tax loophole.
How to Sell Mutual Funds on Fidelity
Selling is almost identical to buying.
Step 1: Open Your Investment Account
Tap “Investing” and select the fund you want to sell.
Step 2: Choose the Trade Button
Select the green trade button and switch to the “Sell” tab.
Step 3: Enter the Amount
You can:
- Sell a specific dollar amount.
- Sell a certain number of shares.
- Sell the entire position.
Step 4: Review and Submit
Tap “Preview” and confirm the order.
Like purchases, sales execute after market close and proceeds are typically returned to your core position within one to two business days.
Taxes and Selling Investments
Before selling mutual funds on Fidelity, investors should understand capital gains taxes.
Short-Term Capital Gains
Investments held for less than one year are taxed at ordinary income rates.
Long-Term Capital Gains
Investments held for more than one year usually qualify for lower tax rates.
Long-term investing often provides tax advantages in addition to allowing compounding to continue working.
When Should You Sell?
Most long-term investors rarely sell.
Typical reasons include:
- Funding major life goals.
- Rebalancing a portfolio.
- Generating retirement income.
Frequent selling interrupts compounding and can create unnecessary taxes. Many successful investors focus on consistent contributions and maintaining a long-term perspective.
How to Buy and Sell Mutual Funds on Fidelity Successfully
Learning how to buy and sell mutual funds on Fidelity doesn’t have to be complicated. Fidelity’s low fees, simple interface, and broad selection of index funds make it accessible for beginners and experienced investors alike.
Whether you choose FXAIX, FSKAX, FTIHX, or one of Fidelity’s zero-expense funds, the key is consistency. Building wealth usually comes down to starting early, contributing regularly, and avoiding the temptation to constantly trade.
FAQ
Can I buy mutual funds on Fidelity with only a few dollars?
Yes. Many Fidelity index funds have no minimum investment requirement, allowing investors to start with as little as $1.
Do mutual funds trade instantly?
No. Mutual funds are priced once daily after the market closes, so orders execute at the next available closing price.
What is the expense ratio?
The expense ratio is the annual fee charged for managing the fund. Lower expense ratios help investors keep more of their returns.
Are Fidelity zero-fee funds really free?
Yes. Funds such as FZROX, FNILX, and FZILX have a 0% expense ratio, meaning there are no management fees.
Do I pay taxes when selling?
Selling investments in a taxable account may trigger capital gains taxes, especially if the investment increased in value.
How To Buy Mutual Funds on Fidelity
- Open the Fidelity app.
- Tap “Transact.”
- Search for the fund ticker.
- Select the fund.
- Tap “Trade.”
- Choose “Buy.”
- Enter the dollar amount.
- Review the order.
- Tap “Place Order.”
- Wait for the trade to execute after market close.
