Fidelity Investments is one of the most trusted brokerage platforms in the world, known for its beginner-friendly app, strong customer support, and extremely low-cost investing options. For new investors, it can feel overwhelming at first, but once you understand how the system works, it becomes one of the most powerful tools for building long-term wealth.
In this guide, you will learn how it works from setup to investing, including how to open an account, fund it, choose investments, automate contributions, and avoid beginner mistakes.
Getting Started
The first step is downloading the mobile app and creating an account. Once inside, you will see options like:
- General investing (standard brokerage account)
- Retirement accounts (Roth IRA or Traditional IRA)
- Crypto investing (Bitcoin, Ethereum, etc.)
- Custodial and college savings accounts
For most beginners, Fidelity Investments recommends starting with a general brokerage account, which allows you to buy stocks, ETFs, bonds, and mutual funds.
During setup, you will enter personal details such as your name, address, phone number, email, and Social Security Number. This is required for identity verification under financial regulations.
Account Setup in Fidelity Investments
After selecting your account type, you will choose whether it is:
- An individual account (just for you)
- A joint account (shared ownership)
Most beginners choose an individual account.
Your identity may be verified instantly or request additional documentation such as a driver’s license or passport. This is normal and part of regulatory compliance.
Once approved, your account becomes active and ready for funding.
Securing Your Account
Security is an important part. You should immediately enable:
- Face ID or fingerprint login
- Two-factor authentication (authenticator app)
- Secure session settings
These tools ensure your Fidelity Investments account remains protected, especially once real money is deposited.
Funding Your Account
To fund your account, you must link a bank account using electronic funds transfer (EFT).
There are three main methods:
- EFT (free, takes 1–3 business days)
- Wire transfer (faster but may cost fees)
- Transfer from another Fidelity account
Most users choose EFT because it is free and reliable.
Fidelity Investments also allows you to connect your bank instantly using secure login systems or manually with routing and account numbers.
Once linked, you can transfer money directly into your brokerage account.
Understanding the Home Screen
After funding your account, the home screen shows:
- Total portfolio value
- Daily gains or losses
- Performance chart (1 month, 1 year, 3 years, etc.)
- List of all accounts
At the bottom, you will see key navigation tabs:
- Home
- Investing
- Transact
- Planning
- Discover
The Discover tab shows stocks, ETFs, mutual funds, and market trends, but beginners should avoid chasing trending stocks and focus on long-term investing strategies instead.
What to Invest in
One of the biggest advantages of Fidelity Investments is access to low-cost index funds and ETFs.
A simple beginner portfolio can include:
1. Total Market Index Fund
FSKAX (Fidelity Total Market Index Fund)
This represents the entire US stock market, including thousands of companies.
2. S&P 500 Index Fund
FXAIX (Fidelity 500 Index Fund)
Tracks the 500 largest US companies and is one of the most popular funds in Fidelity Investments.
3. Dividend ETF
SCHD (Schwab US Dividend Equity ETF)
Focuses on stable, dividend-paying companies that generate regular income.
These three assets form a balanced portfolio of growth, stability, and income inside Fidelity Investments.
Fees
One of the strongest advantages of Fidelity Investments is its extremely low cost structure.
- Stocks and ETFs: $0 commission
- Most mutual funds: $0 transaction fee
- Fidelity index funds: extremely low expense ratios (some as low as 0.015%)
Some funds even have a 0% expense ratio, meaning you pay no management fee at all.
This makes it one of the lowest-cost investing platforms available.
How to Buy Investments
To buy an investment:
- Go to Transact
- Search for a ticker (e.g., VTI, AAPL)
- Tap Buy
- Choose between:
- Dollars (fractional investing)
- Shares
- Select order type:
- Market (recommended for beginners)
- Limit (advanced users)
Fidelity Investments allows fractional shares, meaning you can invest with as little as $1.
Once confirmed, your order executes immediately or at market close depending on the investment type.
Tracking Your Portfolio in Fidelity Investments
The Investing tab shows:
- All your positions
- Total gains/losses
- Average cost per share
- Individual investment performance
When you buy an investment, cash may still temporarily appear in your account due to settlement delays. This is normal and resolves automatically in 1–2 business days.
Selling Investments in Fidelity Investments
To sell:
- Tap Trade
- Select Sell
- Choose amount (dollars or shares)
- Confirm order
However, selling can trigger taxable events:
- Short-term gains (taxed at higher rates)
- Long-term gains (lower tax rates after 1 year)
Because of this, long-term holding is generally preferred.
Dividends and DRIP in Fidelity Investments
Dividends are payments from companies or funds to investors.
In Fidelity Investments, you can choose:
- Take dividends as cash
- Automatically reinvest them (DRIP)
DRIP in Fidelity Investments allows compounding by automatically buying more shares whenever dividends are paid.
This creates exponential growth over time and is one of the most powerful features of Fidelity Investments.
Automating Investments in Fidelity Investments
Fidelity Investments allows automatic investing through recurring contributions.
You can set:
- Investment amount
- Frequency (weekly, biweekly, monthly)
- Investment fund (e.g., FSKAX)
- Bank source
Automation ensures consistency, which is one of the most important factors in long-term investing success.
Withdrawing Money from Fidelity Investments
You can withdraw money anytime by transferring funds back to your bank.
However, only cash in your core position (SPAXX) is immediately available. Investments must be sold before withdrawal.
Withdrawals typically take 1–3 business days.
Beneficiaries in Fidelity Investments
Fidelity Investments allows you to assign beneficiaries who inherit your account.
You can assign:
- Spouse
- Family members
- Trusts
- Organizations or charities
You can also split percentages between multiple beneficiaries, ensuring your assets are distributed exactly as you want.
Taxes and 1099 in Fidelity Investments
Fidelity Investments provides a 1099 tax form each year, which includes:
- Dividends earned
- Capital gains
- Investment sales
This form is used when filing taxes with a CPA or tax software.
Key tax rules in Fidelity Investments:
- Short-term gains are taxed higher
- Long-term gains are taxed lower
- Dividends are taxable even if reinvested
Common Beginner Mistakes
Many beginners lose money not because of Fidelity Investments itself, but because of behavior:
- No clear investment plan
- Checking portfolio constantly
- Trying to time the market
- Chasing trending stocks
- Selling too early during volatility
Successful investors focus on consistency, patience, and long-term holding.
Final Thoughts
Fidelity Investments is a powerful platform that gives beginners everything needed to build long-term wealth: low-cost funds, automation tools, fractional investing, and strong security features.
The key to success in Fidelity Investments is not complexity—it is consistency, discipline, and time in the market.
