Alright, let's dive into the world of recurring investments with Fidelity! This is a fantastic way to build wealth over time, and Fidelity makes it incredibly straightforward. So, are you ready to take control of your financial future and make your money work harder for you? Let's get started!
Step 1: Understanding the Power of Recurring Investments – Why Bother?
Before we get into the "how-to," let's briefly touch upon the "why." You might be thinking, why should I set up recurring investments instead of just investing a lump sum whenever I have extra cash? Great question! Here's why recurring investments, also known as dollar-cost averaging, are a game-changer:
Discipline and Consistency: It automates your savings and investing, removing the temptation to spend that money elsewhere. You're essentially paying yourself first.
Dollar-Cost Averaging: This is a big one! By investing a fixed amount regularly, you buy more shares when prices are low and fewer shares when prices are high. Over time, this can lead to a lower average cost per share than if you tried to time the market (which is notoriously difficult, even for pros!).
Compounding: The magic of compounding works best with consistent contributions. Your earnings start earning their own earnings, and this snowball effect accelerates over time.
Reaching Your Goals Faster: Whether it's a down payment on a house, retirement, or your child's education, regular contributions help you hit those financial milestones more efficiently.
Now that you're convinced, let's move on to the practical steps!
Step 2: Logging In and Navigating to the Right Place
This is where your journey begins!
2.1 Accessing Your Fidelity Account:
First things first, open your web browser and go to the official Fidelity website:
www.fidelity.com Locate the "Log In" button, usually prominently displayed in the top right corner of the page.
Enter your Fidelity Username and Password. Make sure you're on a secure connection (look for "https://" in the URL).
If you have two-factor authentication enabled (which you absolutely should!), complete that step. This might involve a code sent to your phone or an authenticator app.
2.2 Finding the "Recurring Investments" Section:
Once you're logged in, you'll land on your account summary page. This gives you an overview of all your Fidelity accounts.
Look for navigation menus. Fidelity's interface is generally user-friendly, but menus can vary slightly. You're typically looking for something like:
"Accounts & Trade"
"Transfers & Payments"
"Planning & Advice"
"Investments"
Within one of these broader categories, you'll usually find options related to "Automatic Investments," "Recurring Transfers," "Set Up an Investment Plan," or similar. Often, it's under "Transfers & Payments" and then "Automatic Transfers & Investments."
Pro Tip: If you're having trouble finding it, use the search bar on the Fidelity website (if available) and type in "recurring investments" or "automatic investments."
Step 3: Choosing Your Investment Account and Source
This is where you specify where the money is coming from and where it's going.
3.1 Selecting the Destination Account:
Fidelity will present you with a list of your eligible accounts. This could be a brokerage account, an IRA (Traditional, Roth, SEP), a 529 college savings plan, or another type of investment account.
Carefully select the account into which you want to make recurring investments. Double-check this step! Investing in the wrong account can lead to complications later.
3.2 Designating the Funding Source:
Next, you'll need to tell Fidelity where to pull the funds from. Your options typically include:
Linked Bank Account: This is the most common and convenient method. If you haven't linked a bank account yet, you'll be prompted to do so. This usually involves providing your bank's routing number and your account number. Fidelity will perform a small "micro-deposit" verification to confirm the account.
Fidelity Core Account: If you have cash sitting in your Fidelity core account (e.g., your Fidelity Cash Management account), you can select that as the source.
Money Market Fund: Sometimes, you might have funds in a Fidelity money market fund within your brokerage account that you wish to use.
Step 4: Setting Up the Investment Details
Now for the specifics of what you're investing in and how often. This is where the customization happens!
4.1 Specifying Your Investment Vehicle:
This is crucial! You'll need to decide what you want to invest in. Common options include:
Fidelity Mutual Funds: If you already own Fidelity mutual funds or want to start investing in them, you can select the specific fund(s) by their ticker symbol (e.g., FSKAX for Fidelity Total Market Index Fund).
ETFs (Exchange-Traded Funds): While some brokers allow recurring investments into ETFs, Fidelity generally makes it easier for mutual funds. However, you can buy ETFs with recurring transfers if you manually set up the trade after the money arrives. For truly automated ETF investing, you might need to use a slightly different approach or consider mutual fund equivalents. For simplicity and automation, Fidelity mutual funds are often the easiest for direct recurring investments.
Individual Stocks: Fidelity typically doesn't offer automated recurring investments into individual stocks directly through the "set up recurring investment" feature. You'd set up a recurring transfer and then manually buy the stocks.
Consider your investment goals and risk tolerance when selecting your investment. Diversified index funds or target-date funds are often excellent choices for long-term recurring investments.
4.2 Determining the Investment Amount:
Enter the exact dollar amount you wish to invest in each cycle. Start with an amount that is comfortable and sustainable for your budget. Even small amounts add up significantly over time.
Fidelity often has minimum investment requirements for mutual funds, so be mindful of those.
4.3 Choosing the Frequency:
How often do you want to invest? Fidelity typically offers several options:
Weekly: Great for those who get paid weekly.
Bi-Weekly: Common for bi-weekly paychecks.
Monthly: A popular and easy-to-manage option.
Quarterly: Less frequent, but still provides dollar-cost averaging benefits.
Select the frequency that aligns best with your income and financial planning.
4.4 Setting the Start Date:
You'll need to pick a date for your first recurring investment to occur. Choose a date that works best for your cash flow.
Remember: If you choose a weekend or holiday, the transaction will typically process on the next business day.
Step 5: Review and Confirm!
This is a critical step to ensure everything is set up correctly.
5.1 Scrutinize the Details:
Fidelity will present you with a summary of your recurring investment setup. READ EVERY DETAIL CAREFULLY!
Destination account: Correct?
Funding source: Correct?
Investment vehicle (fund/ETF): Is it the one you intended?
Investment amount: Is this the right amount?
Frequency: Is it set correctly?
Start date: Does it align with your plans?
Look for any disclaimers or important notes from Fidelity.
5.2 Agree to Terms and Conditions:
You'll likely need to check a box indicating that you've read and agree to Fidelity's terms and conditions for recurring investments. It's always a good idea to at least skim these, especially if you have questions about cancellations or modifications.
5.3 Confirm and Set It!
Once you're absolutely sure everything is accurate, click the "Confirm" or "Set Up" button.
Fidelity will then process your request, and you should receive a confirmation message on screen and possibly an email confirmation.
Step 6: Monitoring and Adjusting Your Recurring Investments
Setting it up is just the beginning!
6.1 Verifying Transactions:
After your first recurring investment is scheduled to occur, log back into your Fidelity account within a few days to ensure the transaction went through as planned.
Check your account activity or transaction history. You should see the purchase of your chosen investment.
6.2 Making Changes or Stopping Recurring Investments:
Life happens, and your financial situation might change. You can usually modify or cancel your recurring investment plan at any time through the same section where you set it up.
Look for options like "Manage Automatic Investments," "Edit," or "Cancel."
Give yourself enough lead time if you need to make changes, as transactions are often processed a day or two before the scheduled date.
6.3 Increasing Your Contributions Over Time:
As your income grows, or as you get closer to your financial goals, consider increasing your recurring investment amount. Even a small increase can make a significant difference over the long term thanks to compounding. Fidelity often has a feature to easily adjust the amount.
Congratulations! You've successfully set up recurring investments with Fidelity. You're now on a disciplined path to building wealth.
FAQs: How to Manage Recurring Investments Fidelity
Here are 10 common "How to" questions related to managing recurring investments with Fidelity, along with their quick answers:
How to set up recurring investments for multiple Fidelity accounts? You will need to set up a separate recurring investment plan for each individual Fidelity account you wish to fund. Go through the steps outlined above for each account.
How to change the amount of my recurring investment on Fidelity? Log in to your Fidelity account, navigate to the "Automatic Investments" or "Recurring Transfers" section, locate your existing plan, and look for an "Edit" or "Modify" option to adjust the investment amount.
How to change the frequency of my recurring investment with Fidelity? Similar to changing the amount, access your recurring investment plan through the "Automatic Investments" section and select the "Edit" or "Modify" option to change the frequency (e.g., from monthly to bi-weekly).
How to stop or cancel a recurring investment on Fidelity? Log in, go to the "Automatic Investments" or "Recurring Transfers" section, find the plan you wish to stop, and look for a "Cancel" or "Delete" option. Confirm your cancellation.
How to find where my recurring investments are going in my Fidelity account? Once logged in, go to your account summary, select the specific investment account, and then navigate to the "Activity & Orders" or "History" tab. You will see the details of your recurring investment purchases there.
How to link a new bank account for recurring investments on Fidelity? Navigate to the "Transfers & Payments" section, then "Link External Accounts" or "Bank Information." Follow the prompts to add your new bank account, which may involve micro-deposit verification.
How to set up recurring investments into an ETF on Fidelity? While direct recurring investments into ETFs are less common than mutual funds via the automated feature, you can set up a recurring transfer of cash from your bank to your Fidelity brokerage account, and then manually purchase the ETF after the funds arrive.
How to ensure I'm meeting minimums for Fidelity mutual funds with recurring investments? When selecting a Fidelity mutual fund for recurring investments, Fidelity's system will typically alert you if your chosen amount does not meet the fund's minimum initial or subsequent investment requirements. Adjust your amount accordingly.
How to view all my active recurring investment plans on Fidelity? From your Fidelity dashboard, typically under "Transfers & Payments" or "Accounts & Trade," look for a section specifically titled "Automatic Investments," "Recurring Transfers," or "Scheduled Activity." This will show all your active plans.
How to adjust the start date for an existing recurring investment on Fidelity? Access your recurring investment plan via the "Automatic Investments" section, select "Edit" or "Modify," and you should find an option to change the next scheduled payment date or the overall start date of the recurring plan.
