Hey there! Ever found yourself wishing you could consistently invest without having to remember to do it every single time? What if I told you there's a super convenient way to do just that, right within your Fidelity account? It's called Fidelity Recurring Investments, and it's a game-changer for building wealth systematically. Let's dive in and see how it works!
Understanding Fidelity Recurring Investments: Your Automated Wealth Builder
Fidelity recurring investments allow you to set up automatic, scheduled purchases of various investments within your Fidelity brokerage account. Think of it as putting your investing on autopilot. Instead of manually buying stocks, ETFs, or mutual funds every week or month, Fidelity does it for you. This strategy is also widely known as dollar-cost averaging, a powerful approach to investing that helps mitigate market volatility and build disciplined habits.
Why You Should Consider Recurring Investments:
Discipline and Consistency: It takes the emotion out of investing. No more trying to "time the market" – you're consistently putting money to work.
Dollar-Cost Averaging: By investing a fixed amount regularly, you buy more shares when prices are low and fewer when prices are high. Over time, this can lead to a lower average cost per share, potentially enhancing your returns.
Time-Saving: Once set up, it requires virtually no ongoing effort. You free up time that would otherwise be spent on manual trades.
Compounding Power: Regular contributions, combined with the power of compounding, can significantly grow your wealth over the long term.
Reaching Financial Goals: Whether it's saving for retirement, a down payment on a house, or your child's education, recurring investments provide a consistent pathway to achieving your financial aspirations.
Now, let's get to the nitty-gritty of how to set this up.
Step 1: Getting Started – Logging In and Navigating to the Right Place
Ready to take control of your financial future? Your first step is to access your Fidelity account.
Sub-heading 1.1: Log In to Your Fidelity Account
Open your web browser and go to the official Fidelity Investments website (Fidelity.com).
Locate the "Log In" button, usually found in the top right corner of the page.
Enter your User ID and Password.
If you have multi-factor authentication enabled (which you absolutely should for security!), complete the verification process.
Sub-heading 1.2: Navigate to "Transfers" or "Trade"
Once logged in, you'll see your portfolio summary. To set up recurring investments, you typically need to go to either the "Accounts & Trade" section or the "Trade" menu.
Look for a menu item like "Accounts & Trade" or simply "Trade" in the top navigation bar.
From the dropdown, select "Recurring Investments" or "Transfers & Investments". Fidelity's interface may vary slightly, but these are the common pathways.
Step 2: Choosing Your Account and Investment Type – Where the Money Goes
Now that you're in the right place, it's time to decide where you want your recurring investments to go and what you want to invest in.
Sub-heading 2.1: Select the Investment Account
Fidelity will prompt you to choose the specific investment account you wish to use for recurring investments. This could be a brokerage account, IRA (Traditional, Roth, SEP), or even a 529 college savings plan.
Make sure you select the correct account as this is where your money will be invested.
Sub-heading 2.2: Choose Your Security Type
Fidelity offers a good range of investment options for recurring investments:
Stocks/ETFs: You can set up recurring purchases for individual stocks or Exchange-Traded Funds. This is great for building a diversified portfolio of specific companies or market sectors.
Mutual Funds: If you prefer a professionally managed and diversified portfolio, mutual funds are an excellent choice. Fidelity offers a vast selection of their own funds and those from other companies.
Fidelity Basket Portfolios: This unique feature allows you to create your own "basket" of stocks and ETFs and manage them as a single investment. You can then set up recurring investments into this custom basket.
Step 3: Defining Your Investment Details – How Much and How Often
This is where you customize the specifics of your recurring investment plan.
Sub-heading 3.1: Enter the Ticker Symbol and Dollar Amount
Ticker Symbol: If you chose stocks or ETFs, you'll need to enter the ticker symbol for each security you want to invest in. You can usually add multiple tickers if you're building a diversified recurring investment.
Dollar Amount: Specify the exact dollar amount you wish to invest in each chosen security per interval. For example, "$50 in XYZ stock" or "$100 in ABC mutual fund." Fidelity typically allows a minimum of $1 for stocks/ETFs/baskets and $10 for mutual funds.
Sub-heading 3.2: Select Your Investment Frequency
This is crucial for establishing your disciplined investing habit. Fidelity offers various frequencies to suit your needs:
Weekly: For the most frequent contributions.
Every 2 Weeks (Bi-weekly): A popular choice for those paid bi-weekly.
Monthly: A common and effective frequency.
Quarterly: Less frequent, but still provides the benefits of dollar-cost averaging.
Sub-heading 3.3: Choose Your Start Date
You'll need to select a start date for your first recurring investment. Keep in mind that if the selected date falls on a weekend or holiday, the investment will typically execute on the next business day.
Step 4: Funding Your Investments – Where the Money Comes From
How will Fidelity get the money to make these automatic investments? You have two primary options.
Sub-heading 4.1: Fund from a Linked Bank Account
This is often the most convenient option. You can link your external bank account (checking or savings) directly to your Fidelity account.
When setting up the recurring investment, you'll see a toggle or checkbox to "Use a linked bank account." Turn this on, and Fidelity will automatically pull the specified funds from your bank account on your scheduled investment date.
Important Note: For mutual fund purchases, the money is typically debited from your bank account on the day the investment is purchased. For stocks and ETFs, it's usually two days before the trade date. Ensure sufficient funds are available in your bank account to avoid any issues.
Sub-heading 4.2: Fund from Your Fidelity Core Position
Your Fidelity account has a "core position," which is essentially a cash management account where uninvested cash is held.
If you leave the "Use a linked bank account" option toggled off, Fidelity will draw the funds for your recurring investment from your Fidelity core position.
This means you'll need to ensure there's enough cash available in your core position before each scheduled investment date. You can set up separate recurring transfers from your bank to your Fidelity core position if you prefer this method.
Step 5: Review and Confirm – Making It Official
You're almost there! This final step ensures everything is set up correctly.
Sub-heading 5.1: Preview Your Recurring Investment Details
Before confirming, Fidelity will display a summary of your recurring investment plan. Carefully review all the details:
Account selected
Investment(s) chosen
Dollar amounts
Frequency
Start date
Funding source
Double-check everything to ensure it aligns with your financial goals.
Sub-heading 5.2: Confirm and Celebrate!
If all looks good, click the "Confirm" or "Create Plan" button.
Congratulations! You've successfully set up recurring investments with Fidelity. You'll likely receive a confirmation message or email.
Step 6: Managing Your Recurring Investments – Staying in Control
Life changes, and so might your investment strategy. Fidelity makes it easy to adjust your recurring investments.
Sub-heading 6.1: Accessing Your Recurring Activity
Log in to your Fidelity account.
Navigate to the "Accounts & Trade" section and then look for options like "Transfers," "Payments & Transfers," or "Your Recurring Activity." This central hub allows you to view and manage all your scheduled transfers and investments.
Sub-heading 6.2: Modifying or Cancelling Plans
From your recurring activity dashboard, you can:
Edit an existing plan: Change the investment amount, frequency, or even the investment itself.
Skip a payment: If you need to temporarily pause a specific investment without canceling the entire plan, you might have the option to skip a single payment.
Delete a plan: If your financial situation changes or you've met a goal, you can easily cancel a recurring investment plan.
Remember: Changes typically need to be made a few business days before the next scheduled investment date to take effect.
Frequently Asked Questions (FAQs) about Fidelity Recurring Investments
Here are 10 common questions you might have about Fidelity recurring investments, along with quick answers:
How to set up recurring investments on Fidelity?
You can set them up by logging into your Fidelity account, navigating to "Accounts & Trade" or "Trade," selecting "Recurring Investments," choosing your account and investment, specifying the amount and frequency, selecting a funding source, and then reviewing and confirming.
How to change the amount of a Fidelity recurring investment?
Log in to your Fidelity account, go to "Accounts & Trade," then "Your Recurring Activity," select the specific recurring investment plan, and you'll find options to edit or modify the amount.
How to stop or cancel a Fidelity recurring investment?
Access "Accounts & Trade," then "Your Recurring Activity" in your Fidelity account. Locate the recurring investment you wish to stop and select the option to delete or cancel the plan.
How to fund Fidelity recurring investments?
You can fund them either by linking an external bank account, from which Fidelity will automatically pull funds, or by using the cash available in your Fidelity core (cash) position.
How to know if my Fidelity recurring investment went through?
You can check your account activity and transaction history within your Fidelity portfolio summary. You'll see the purchase confirmation and the updated share balance.
How to choose investments for Fidelity recurring investments?
You can choose individual stocks, ETFs, mutual funds (Fidelity or third-party no-transaction-fee funds), or even Fidelity Basket Portfolios for your recurring investments.
How to link a bank account for Fidelity recurring investments?
During the setup process for recurring investments, Fidelity will provide an option to link a new bank account or use an existing linked account. You'll typically need to provide your bank's routing and account numbers.
How to check the status of my pending Fidelity recurring investment?
In your "Your Recurring Activity" section within your Fidelity account, you can typically see upcoming scheduled investments and their status.
How to deal with insufficient funds for a Fidelity recurring investment?
If there are insufficient funds in your linked bank account or Fidelity core position, the recurring investment may fail. Fidelity will usually notify you of the failed transaction. You'll need to ensure funds are available for the next scheduled investment.
How to use dollar-cost averaging with Fidelity recurring investments?
By setting up recurring investments with a fixed dollar amount at regular intervals, you are inherently employing dollar-cost averaging. Fidelity automates this strategy for you, helping you buy more when prices are low and less when high.
