Fidelity Promotions 2024 ($100 Bonus) (2024)

August 2024 Fidelity promotions, $100 for $50 offer, and bonus incentives. Current best Fidelity promotions for opening a new account or for existing customers depositing cash into a regular brokerage account, ROTH IRA, or 401K rollover IRA.

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Transitioning from a 401K to a Rollover IRA Account

Upon leaving a job, one is often left under the impression that 401K funds must be immediately removed from the 401K account into another institution. This myth is often unfounded as these investment companies are happy to find ways to retain a customer’s business.

Funds Transfer Process

With Fidelity, they make it easy to transition from an Employer Sponsored 401k to a Rollover IRA Account. Simply contact a Fidelity representative through the 1-800 number or online chat where you are quickly connected to a representative located within the United States. There are no long hold times. You are provided an account manager, and if you request, a direct contact line to work directly with the customer service agent. This agent will act as a private consultant who will make recommendations and provide the knowledge to make an educated transfer and dispel the myth of having to leave a financial institution simply because you are no longer hold an Employer Sponsored 401K account.

Typically the transfer takes approximately 24-48 hours to process where a single account representative will contact you to confirm the transfer is complete. During the transfer process, the account balance is sold than purchased into a new account for the Rollover IRA Account. The benefits of transferring internally are that the assets are only out of the market for a short period of time while if you switched into another financial institution, it could take a number of weeks to transfer as Fidelity would not transfer the funds directly into a new financial institution. Fidelity only mails a check to the owner of the account who then has to deposit it into the new account. This strategy is likely put in place by Fidelity to make it more appealing to stay with them rather than switching into between accounts.

Online Portal

The Fidelity online portal clearly shows your current balance. However, it is riddled with advertisem*nts that may serve as a distraction to an individual user looking only for account performance information. This is a stark contrast to an online interface such as Vanguard whose portal is virtually ad-free.

While the Fidelity Portal highlights the Today’s Gain/Loss and shows a chart of performance that can be to show a 1-month view, 1-year view, or a year to date. Tabs inside the portal direct you to Portfolio Positions, Balances, Activity & Orders, Analysis, Statements, and Account Features – the interface is rather cumbersome to navigate. It appears to be designed for someone who is familiar with the investment process vs. a novice user who is interested in putting their investments on auto-pilot.

Expense Ratio

The Fidelity Expense Ratio is tough to find within the online portal. Ultimately the Expense Ratio can be found by digging into the specific investor fund where it is tucked away as part of the fund information. In the example above, the mutual fund is FBIFX - Fidelity Freedom® Index 2040 Fund - Investor Class. While Fidelity touts no transaction fees just below the heading, you can see below that the Gross Expense Ratio for this fund is .24%. Previously, when using a 401K sponsored plan, the fee structure was as high as .75%. This information is impossible to locate within an individual’s account and likely due to their higher than average fee schedule.

When comparing this to the VFORX Vanguard Target Retirement 2040 fund, which is .16%, there is a difference of .08%. On the Vanguard Portal, the Expense Ratio is clearly visible and easy to find the in the account information. In fact, in the Vanguard portal, you can import in accounts from other investment funds where the expense ratio is easier to find on the Vanguard site versus the Fidelity site. While these percentages may seem small, in terms of the life of the plan, the differences in fees could cost an individual XXXX (do you know how we could calculate this). Therefore this factor must be considered when selecting an investment company.

Access to Funds

Those who would like to use the funds within their IRA account would simply need to open a Cash Management Account. This account acts like a traditional checking account but does not include the bank. The Cash Management Account certainly offers some perks to those who are utilizing their funds. It eliminates the need to transfer money between bank accounts which may result in additional fees. The Fidelity Cash Management Account can be opened online and includes the following features:

• ATM/Debit Cards
• Automatic Investments
• Automatic Withdrawals
• Bank Wire
• BillPay®
• Checkwriting(Including reorders)
• Deposit Slips
• Direct Debit
• Direct Deposit
• Electronic Funds Transfer (EFT)
• Foreign Currency Wire Transfers
• Mobile Check Deposit

While the transition process to move money from a 401K account to a Rollover IRA account is easy, and Fidelity offers top notch customer service, the Fidelity online portal is hard to navigate, and investor fund fees are higher than competitors like Vanguard. Even with the higher fees, there is a constant stream of advertising material that may distract from the value of online fund management. However, accessing the funds are easy using Cash Management Accounts. Additionally, Fidelity offers the benefits of 196 Investor Centers in metropolitan areas around the country making it easy to find a physical location to conduct business, hold portfolio reviews, and ultimately manage your investments. Fidelity manages over 6 billion in customer assets with a portfolio of 484 mutual funds to select from1. The decision on which company to use is a matter of an individual’s customer support needs and fund preference.

Updated on 8/1/2024.