Do you find yourself constantly thinking about how to build your wealth, but then get bogged down by the actual process of logging in, transferring money, and placing trades? What if I told you there's a simpler way? A way to put your investments on autopilot, so your money works harder for you, even when you're busy with life's demands.
That's right – we're talking about automating your investments on Fidelity! This isn't just a convenience; it's a powerful strategy that can help you reach your financial goals faster and more efficiently. Let's dive in and learn how to set up this incredible financial superpower.
Why Automate Your Investments?
Before we jump into the "how-to," let's quickly understand the immense benefits of automating your investments:
Discipline and Consistency: Life gets busy. Automated investments ensure you consistently contribute to your financial goals, even when you forget or are tempted to spend the money elsewhere. This is the core of dollar-cost averaging, a strategy that can help mitigate market volatility.
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 and potentially better returns. It takes the emotion out of investing.
Time-Saving: Once set up, it runs in the background. No more remembering to log in or manually initiate transfers and trades.
Goal Achievement: Consistent contributions accelerate your progress towards retirement, a down payment, a child's education, or any other financial aspiration.
Reduced Stress: Knowing your investments are on track provides peace of mind and frees up mental energy.
Now, let's get down to the practical steps!
A Step-by-Step Guide to Automating Your Investments on Fidelity
Fidelity offers a robust platform that makes automating your investments surprisingly easy. Whether you want to set up recurring contributions to your IRA, a taxable brokerage account, or even automatic investments into specific stocks or ETFs, Fidelity has you covered.
Step 1: Log In to Your Fidelity Account (And If You Don't Have One, Open One!)
First things first, you'll need to access your Fidelity account. If you haven't opened a Fidelity account yet, don't worry! It's a straightforward process. You can open various account types, including:
Brokerage Account: For general investing goals.
IRA (Traditional, Roth, Rollover): For retirement savings with tax advantages.
Health Savings Account (HSA): A triple-tax-advantaged account for healthcare expenses.
529 College Savings Plan: For education funding.
To open an account, visit Fidelity's website and look for the "Open an Account" option. You'll typically need to provide personal information, link a bank account, and choose your account type. Once that's done, or if you already have an account, proceed to log in.
Pro Tip: Always ensure you're on the official Fidelity website (fidelity.com) and that the connection is secure (look for "https://" in the URL).
Step 2: Navigate to the Recurring Investments Section
Once logged in, the interface might vary slightly depending on updates, but generally, you'll follow a path similar to this:
Look for a main navigation bar at the top of the page.
Hover over or click on "Trade" or "Accounts & Trade".
From the dropdown menu, select "Recurring Investment" or "Recurring Transfers" (sometimes these are grouped together).
Alternative Navigation: If you're having trouble finding it, you can often use the search bar on Fidelity's website and type "recurring investments" or "automate investments."
Step 3: Choose Your Investment Type and Account
Now you're in the heart of setting up your automation.
3.1 Select Security Type
Fidelity allows you to automate investments into a variety of asset classes:
Stocks/ETFs: Ideal for building a diversified portfolio of individual companies or exchange-traded funds.
Mutual Funds: Professionally managed funds that pool money from many investors to buy a diversified portfolio of securities. Fidelity offers its own funds (including Fidelity Flex® funds with zero expense ratios in managed accounts) and funds from other companies.
Fidelity Basket Portfolios: A newer feature that allows you to create and manage a custom basket of stocks and ETFs as a single investment. This is a great option if you want to invest in a theme or sector without managing individual positions constantly.
3.2 Choose Your Fidelity Account
Select the specific Fidelity account where you want these automated investments to occur. This could be your taxable brokerage account, your Roth IRA, your Traditional IRA, or an HSA.
Step 4: Specify Your Investment Details
This is where you tell Fidelity exactly what, how much, and how often you want to invest.
4.1 Enter Ticker Symbols (for Stocks, ETFs, or Baskets)
If you're investing in stocks, ETFs, or Fidelity Basket Portfolios, you'll need to enter their ticker symbols. You can add multiple symbols at once (often up to 10). If you don't know the ticker, there's usually a search function next to the input field.
4.2 Define Your Dollar Amount
Enter the specific dollar amount you wish to invest for each chosen security or for your overall recurring investment. Fidelity typically has minimums for recurring investments, such as $1 for stocks/ETFs/baskets and $10 for mutual funds, but it's always good to check their latest requirements.
4.3 Select Investment Frequency
This is crucial for setting your consistent habit. Fidelity offers various frequencies:
Weekly
Every 2 weeks (Bi-weekly)
Monthly
Choose the frequency that aligns best with your budgeting and income schedule.
4.4 Set Your Start Date
Select the date you want your recurring investment to begin. Keep in mind that if your chosen date falls on a weekend or holiday, the investment will typically execute on the next business day.
Step 5: Fund Your Automated Investments
How will the money get into your Fidelity account to fund these recurring investments? Fidelity gives you two primary options:
5.1 Use Your Linked Bank Account
This is the most common and convenient method. You'll likely see a toggle or option to "Use your linked bank account to fund your investment." Ensure your bank account is already linked to your Fidelity account. If it's not, you'll need to link it first, which might involve a small verification process (like micro-deposits) that could take a few days.
5.2 Use Your Fidelity Account Balance (Core Position)
If you prefer to first transfer money into your Fidelity account (e.g., to your core cash position like Fidelity Government Money Market Fund - SPAXX) and then have the recurring investment draw from that, you can select this option. This is useful if you want to manage your cash flow into Fidelity separately from your investment schedule.
Step 6: Review and Confirm
Before finalizing, Fidelity will provide a summary of your recurring investment setup. Carefully review all the details:
Investment type(s) and ticker symbols
Dollar amount(s)
Frequency
Start date
Funding source
The account receiving the investment
If everything looks correct, click "Preview" and then "Confirm."
Step 7: Monitor and Adjust (Optional, But Recommended)
Congratulations! You've just automated your investments on Fidelity. The hard part is over. However, investing is not a "set it and forget it" entirely. It's "set it and occasionally review it."
7.1 Manage Your Recurring Investments
You can easily adjust or stop your recurring investments at any time. Look for a "Manage recurring transfers" or "Recurring activity" section within your Fidelity account (often under "Transfers" or "Accounts & Trade"). Here you can:
Change the amount you're investing.
Adjust the frequency.
Add or remove investments.
Pause or cancel the recurring plan.
7.2 Periodically Review Your Portfolio
While automation handles the consistent investing, it's wise to:
Rebalance your portfolio: Over time, your asset allocation might drift from your target due to market fluctuations. Rebalancing involves selling some of your overperforming assets and buying more of your underperforming ones to get back to your desired allocation. Fidelity Go (their robo-advisor service) does this automatically. If you're self-directing, you might need to do this manually.
Check on your financial goals: Are your contributions still aligned with your objectives? Have your goals changed?
Review investment performance: Ensure your chosen investments are still performing as expected and align with your risk tolerance.
Exploring Fidelity Go for a Fully Managed Approach
If the idea of selecting individual stocks, ETFs, or even mutual funds feels overwhelming, Fidelity offers a robo-advisor service called Fidelity Go®. This is an even more automated approach to investing.
With Fidelity Go:
You answer a few questions about your financial goals and risk tolerance.
Fidelity Go builds and manages a diversified portfolio of low-cost Fidelity Flex® mutual funds for you.
It automatically rebalances your portfolio as needed to stay in line with your strategy.
There's no advisory fee for balances under $25,000. For balances $25,000 and over, there's an annual advisory fee of 0.35%.
This is an excellent option for hands-off investors who want professional management without the high costs of a traditional financial advisor. You can also set up recurring contributions directly into your Fidelity Go account.
Frequently Asked Questions (FAQs)
Here are 10 common "How to" questions about automating investments on Fidelity, with quick answers:
How to set up recurring investments for multiple stocks on Fidelity?
You can typically set up recurring investments for up to 10 different stock or ETF ticker symbols within a single recurring investment plan. When setting up, you'll have fields to add multiple tickers and their respective dollar amounts.
How to change the amount of my recurring investment on Fidelity?
Log in to Fidelity, navigate to "Transfers" or "Accounts & Trade," then select "Manage recurring transfers" or "Recurring activity." Find your existing recurring investment plan and you should see an option to "Modify" or "Edit" the amount.
How to pause or cancel a recurring investment on Fidelity?
Similar to changing the amount, go to "Manage recurring transfers" or "Recurring activity" within your Fidelity account. Locate the specific recurring investment you wish to pause or cancel and select the corresponding option (e.g., "Pause," "Stop," or "Cancel").
How to link a new bank account for recurring investments on Fidelity?
Within the Fidelity platform, look for a "Transfers" or "Move Money" section, and then an option to "Link External Accounts" or "Manage Bank Accounts." You'll need your bank's routing number and your account number. Fidelity might use micro-deposits or instant verification to confirm ownership.
How to set up recurring contributions to my Fidelity IRA?
The process is the same as setting up any recurring investment. Select your IRA account when prompted to choose an account, then proceed with selecting your investment (e.g., a target-date fund, an ETF, or a mutual fund) and setting the amount and frequency.
How to automate investments into a Fidelity Go account?
When setting up your Fidelity Go account, you'll be prompted to set up recurring transfers. You can also do this post-setup by navigating to your Fidelity Go account details and looking for options to add or manage recurring contributions.
How to see my current recurring investment schedule on Fidelity?
After logging in, go to "Transfers" or "Accounts & Trade," then select "Manage recurring transfers" or "Recurring activity." This section will list all your active recurring investment plans and their schedules.
How to understand if I have enough funds for a recurring investment on Fidelity?
If your recurring investment is set to draw from your linked bank account, Fidelity will initiate an Electronic Funds Transfer (EFT). If there aren't sufficient funds in your bank account, the transfer may fail. If it's drawing from your Fidelity core position, the purchase will only happen if there's enough cash available. Fidelity may send you an alert if a recurring investment fails due to insufficient funds.
How to know which investments are eligible for recurring investments on Fidelity?
Most standard stocks, ETFs, Fidelity mutual funds, and Fidelity Basket Portfolios are eligible for recurring investments. Certain less common or highly illiquid securities might not be. When you go through the setup process, Fidelity's system will typically indicate if a chosen security is not eligible.
How to use dollar-cost averaging effectively with Fidelity's automation?
Simply by setting up a recurring investment with a consistent dollar amount and frequency (e.g., monthly contributions of $100), you are inherently employing dollar-cost averaging. The key is consistency, regardless of market ups and downs.