Investing regularly is one of the most powerful habits you can cultivate for long-term financial success. It allows you to harness the magic of dollar-cost averaging and compounding, taking the emotion out of market fluctuations. Fidelity, a popular brokerage, makes setting up automatic investments incredibly straightforward. If you're ready to put your savings on autopilot and watch your wealth potentially grow, let's dive in!
Ready to build your financial future on autopilot? Let's get started!
This comprehensive guide will walk you through setting up automatic investments on Fidelity, covering both their website and mobile app, with insights gleaned from the active Fidelity community on Reddit.
Step 1: Prepare for Automated Investing
Before you click a single button, a little preparation goes a long way. This ensures your automatic investment plan aligns with your financial goals and current situation.
Sub-heading: Determine Your Investment Goals and Account Type
Why are you investing? Are you saving for retirement in an IRA (Traditional, Roth, or Rollover), a down payment on a house in a brokerage account, or a child's education in a 529 plan? Your goal will often dictate the best account type to use. Fidelity supports recurring investments in a variety of accounts, including:
Brokerage accounts (taxable)
Retirement accounts (Traditional, Roth, Rollover IRAs)
Health Savings Accounts (HSAs)
Fidelity Basket Portfolios
Do you already have a Fidelity account? If not, you'll need to open one. This is typically a quick and easy process online.
Sub-heading: Choose Your Investments Wisely
What will you invest in? Fidelity offers a wide range of investment options for recurring investments:
Mutual Funds: A popular choice for beginners as they offer instant diversification. Fidelity has many excellent low-cost index funds (e.g., FZROX, FNILX) that are often recommended on Reddit for their simplicity and broad market exposure. Note that some non-Fidelity mutual funds may have different minimum investment requirements.
Stocks & ETFs: Yes, Fidelity now allows automatic investments into individual stocks and Exchange Traded Funds (ETFs)! This was a highly requested feature from the Reddit community.
Fidelity Basket Portfolios (formerly FidFolios): These allow you to create and manage a customized basket of stocks and ETFs as a single investment. Recurring investments can be set up for these as well.
Research is key: Don't just pick something randomly. If you're unsure, consider starting with a broad market index fund or an ETF that aligns with your risk tolerance. The r/fidelityinvestments and r/Bogleheads subreddits are excellent resources for research and portfolio ideas.
Sub-heading: Link Your Funding Source
Where will the money come from? You'll need a linked bank account (checking or savings) to fund your automatic investments. If you plan to fund from your Fidelity core (cash) position, ensure you have sufficient funds or set up an automatic transfer into your Fidelity account first.
If you're funding directly from a bank account, Fidelity will initiate a pull from that account.
If you're funding from your Fidelity core position, the funds need to be present in your Fidelity account. Some users on Reddit have noted that if you want to automate both the transfer and the investment, setting up the auto-investment to pull directly from your bank account can consolidate these steps.
Step 2: Setting Up Automatic Investments on Fidelity.com (Website)
The Fidelity website provides a robust and user-friendly interface for managing your investments. This is often the preferred method for initial setup due to the larger screen and clearer navigation.
Sub-heading: Navigating to the Recurring Investments Feature
Log In: Go to Fidelity.com and log in to your account.
Access Account Features: Hover your mouse over "Accounts & Trade" in the top navigation bar.
Find Recurring Transfers: From the dropdown menu, select "Account Features."
Manage Recurring Transfers: On the Account Features page, look for the "Payments & Transfers" section and click "Manage" next to "Recurring Transfers." This section now also includes "Recurring Investments."
Sub-heading: Creating Your Automatic Investment Plan
Select "Create": On the Recurring Transfers & Investments page, you'll see an option to "Create" a new recurring plan. Click on it.
Choose Your Security Type: You'll be prompted to select the type of investment you want to automate:
Stocks/ETFs
Mutual Funds
Fidelity Basket Portfolios
Choose the one that fits your investment strategy.
Select Your Account: Choose the specific Fidelity account (e.g., your Roth IRA, brokerage account) where these automatic investments will take place.
Enter Ticker Symbol(s) and Amount:
For Stocks/ETFs or Mutual Funds: Enter the ticker symbol(s) for the investment(s) you wish to purchase. You can often include multiple symbols in one plan (up to 10 for Stocks/ETFs). Then, specify the fixed dollar amount you want to invest for each.
For Fidelity Basket Portfolios: Select your desired basket. You can choose whether your investment is distributed via "Smart Buys" (most underweight securities first) or "target weights."
Minimums: Fidelity generally allows as little as $1 for stocks/ETFs and $10 for Fidelity mutual funds for recurring investments.
Set Your Frequency: Decide how often you want these investments to occur. Fidelity offers:
Weekly
Every two weeks (bi-weekly)
Monthly
Choose Your Start Date: Select the specific day of the month or week you want your automatic investments to begin. Keep in mind: If your chosen date falls on a weekend or holiday, the investment will typically execute on the next business day. Stock and ETF market orders are generally placed around 10 AM EST on the planned investment date.
Select Funding Source: This is a crucial step.
You can choose to fund from your Fidelity core (cash) position.
Alternatively, you can select a linked bank account to directly pull funds from your external bank. This is often the most convenient option for true "autopilot" investing.
Review and Confirm: Carefully review all the details of your automatic investment plan. Make sure the amounts, frequencies, investments, and funding source are correct. Once satisfied, confirm your plan.
Step 3: Setting Up Automatic Investments on the Fidelity Mobile App
For those who prefer managing their finances on the go, the Fidelity mobile app offers a streamlined experience for setting up recurring investments.
Sub-heading: Accessing Recurring Investments via the App
Open and Log In: Launch the Fidelity Mobile App on your device and log in.
Navigate to "Transact": Look for the "Transact" icon (often a dollar sign or transfer icon) at the bottom or top of the screen and tap it.
Select Recurring Transfers & Investments: From the "Transact" menu, tap on "Recurring Transfers & Investments."
Sub-heading: Creating Your Mobile Recurring Investment Plan
Tap "Create": Similar to the website, you'll find a "Create" option to start a new recurring investment.
Follow the Prompts: The app will then guide you through a series of prompts, much like the website:
Select the account for the investment.
Choose the security type (Stocks/ETFs, Mutual Funds, or Baskets).
Enter the ticker symbol(s) and the dollar amount you want to invest.
Set the frequency (weekly, bi-weekly, or monthly).
Select your start date.
Choose your funding source (Fidelity core or linked bank account).
Review and Confirm: Before finalizing, the app will present a summary of your recurring investment plan. Double-check everything and then confirm.
Step 4: Managing and Monitoring Your Automatic Investments
Once your automatic investments are set up, the beauty is that they largely run themselves. However, it's good practice to periodically check in and make adjustments as needed.
Sub-heading: Modifying or Cancelling Plans
On Fidelity.com: Navigate back to "Accounts & Trade" > "Account Features" > "Manage" next to "Recurring Transfers." From there, you can edit existing plans (change amounts, frequency, investments) or delete them entirely.
On the Mobile App: Go to "Transact" > "Recurring Transfers & Investments." You'll see your existing plans and options to modify or cancel them.
Flexibility is key: Fidelity makes it easy to adjust your plans if your financial situation or goals change. Don't be afraid to tweak them!
Sub-heading: Understanding Execution Times
Stocks & ETFs: Market orders for stocks and ETFs are generally placed at approximately 10 AM EST on the scheduled investment date.
Mutual Funds: Mutual fund orders are placed at the next available price based on the selected investment date.
Non-Trading Days: If your scheduled investment date falls on a weekend or holiday, the transaction will occur on the next business day.
Sub-heading: The Power of Dollar-Cost Averaging
By investing a fixed amount regularly, you're practicing dollar-cost averaging. This strategy helps to reduce the impact of market volatility by ensuring you buy more shares when prices are low and fewer shares when prices are high. It takes the guesswork and emotion out of trying to time the market. This disciplined approach is highly recommended by many seasoned investors on Reddit and elsewhere.
Step 5: Optimizing Your Strategy (Advanced Considerations)
For those looking to go beyond the basics, here are a few additional tips for maximizing your automatic investment strategy.
Sub-heading: Diversification and Rebalancing
Don't put all your eggs in one basket: Even with automatic investments, ensure your portfolio is diversified across different asset classes (stocks, bonds, etc.) and geographies.
Rebalancing: Periodically (e.g., once a year), review your portfolio's asset allocation. If some investments have grown significantly, you might need to rebalance by selling a portion of the overperforming assets and buying more of the underperforming ones to maintain your target allocation. Fidelity provides tools to help with this.
Sub-heading: Tax Efficiency (Especially for Taxable Accounts)
For taxable brokerage accounts, consider investing in tax-efficient ETFs or broad market index funds.
Be mindful of capital gains when rebalancing in taxable accounts.
Sub-heading: Emergency Fund First!
Before aggressively investing, ensure you have a robust emergency fund (3-6 months of living expenses) readily accessible in a high-yield savings account. This prevents you from having to sell investments at an inopportune time during an unexpected expense.
By following these steps, you'll be well on your way to building a consistent and effective automatic investment plan with Fidelity, leveraging the power of automation for your financial future.
10 Related FAQ Questions
How to start investing with a small amount on Fidelity?
You can start automatic investments with as little as $1 for stocks/ETFs and $10 for Fidelity mutual funds, making it very accessible for beginners.
How to change the investment amount for my recurring plan on Fidelity?
Log in to Fidelity.com, go to "Accounts & Trade" > "Account Features" > "Manage" next to "Recurring Transfers," and select your plan to edit the amount. The Fidelity mobile app has a similar path via "Transact."
How to set up recurring investments for multiple stocks/ETFs on Fidelity?
Yes, when creating a recurring investment plan, you can typically add up to 10 different stock or ETF ticker symbols within a single plan, each with its own specified dollar amount.
How to switch the funding source for my automatic investments on Fidelity?
When editing an existing recurring investment plan on Fidelity.com or the mobile app, you'll have the option to change the funding source between your Fidelity core position and a linked bank account.
How to tell if my automatic investment went through on Fidelity?
You can check your "Activity & Orders" tab on Fidelity.com or your transaction history in the mobile app. You'll typically see a "Purchase" transaction for your recurring investment on the scheduled date or the next business day.
How to ensure my Fidelity account has enough cash for automatic investments?
If funding from your Fidelity core position, regularly check your cash balance or set up an automatic transfer from your bank account into your Fidelity core position before your investment date.
How to cancel an automatic investment plan on Fidelity?
Navigate to the "Manage" section for "Recurring Transfers & Investments" on either Fidelity.com or the mobile app, select the specific plan, and choose the option to cancel or delete it.
How to set up automatic dividend reinvestment on Fidelity?
Dividend reinvestment is typically a separate setting. On Fidelity.com, go to "Accounts & Trade" > "Account Features" > "Brokerage & Trading" > "Dividends and Capital Gains" to update your preference for individual securities or your entire account to automatically reinvest dividends.
How to manage Fidelity Basket Portfolios for recurring investments?
You can create a recurring investment for an existing Fidelity Basket Portfolio. When setting it up, you can choose whether the investment distributes funds via "Smart Buys" (to underweight securities) or according to your target weights.
How to get help from Fidelity if I have issues setting up automatic investments?
Fidelity offers excellent customer support. You can contact them via phone, live chat on their website, or by posting a question on the official r/fidelityinvestments subreddit, where Fidelity representatives often provide direct assistance.
