In my previous post I went through the process of deciding on a Roth IRA broker. I chose Fidelity. In this post, I’ll describe how my account opening experience with Fidelity was. I’ve put up a nice slideshow of the process, so you’ll get a picture of what’s involved.
I used Google’s Chrome browser on a Mac and the site rendered fine. Works well with Firefox and Safari as well.
The application process was fairly straightforward and well organized, not to mention quick. There were a few areas I needed clarification and I could instantly chat with a Fidelity rep to get those clarified as I was doing the application. I thought that was very nice rather than interrupt the process with either a phone or wait for an email response.
What you’ll need
- Employer Info
- Beneficiary Info (optional, can be updated once the account’s been opened)
- Bank info or broker info if you intend an in-kind transfer (shares, mutual funds etc)
- Account minimum is $2500
Key account features
- You have the option of holding any uninvested cash in either Fidelity’s money market account (FDRXX) or in a bank. The difference is, a money market yields a higher interest but this is not insured. A bank typically yields very low interest but your money is backed by the Federal Reserve as it is FDIC insured. Choosing either one is fine
- You also have the option to apply for a Fidelity issued Amex card with a 2% reward on purchases. This is not instant approval
- Option to receive statements electronically or via snail mail
Funding your account
- There are 4 ways to fund your account
- Transfer money from your bank via ACH
- Transfer assets from another brokerage
- Via deposit slip
- Via Direct Deposit
You should receive a confirmation email, and that’s pretty much it!
The account opening was pretty smooth. Fidelity gives you an account number and a lets you choose a login name. When you actually login to the site, you can login with your ssn or customer id. I tried with the account number, it didn’t recognize. I tried my ssn, it recognized it, but wanted me to call a customer service rep. Then I remembered the login name, tried that and it worked. Very confusing to say the least. Basically, it works only with the login name.
I did an ACH from my bank to fund the account. The money showed up promptly the next day. I logged in to Fidelity and I could see the money sitting there. No problems. I placed a trade which was well within the available limits. The trade didn’t go through. The message was something like the trade value exceeds cash available. Which wasn’t true and misleading. Since I was in a hurry, I shot an email to Fidelity support. I got a response from Fidelity at the end of the day. With my existing broker I usually get a response in a couple of hours. Fidelity took almost 9 hours to get back when contacted via email. Maybe this was a one time thing. I was pretty impressed with their chat reps, I was connected almost instantaneously. But with email, 9 hours seemed kinda long. Anyway, here’s why the trade did’t go through. Fidelity takes 5 days to process an ACH transfer. During that time, the account shows the cash and doesn’t say anything about being processed, but when you place a trade won’t allow you. According to Fidelity, you can place the trade via a broker during this collection period at no extra charge.
Why? Why 5 days? If I can place the order via a broker, why not online? I understand if this was a one time thing to establish trust, but according to Fidelity, if I don’t want to wait till the end of the collection period, broker assisted call is the only way to go.
I got about 6 or 7 separate snail mails from Fidelity. There was a mail about a mail I will be receiving! I can’t remember if I did opt for snail mail delivery, but either way, this is wasteful.
Again, these are not deal breakers, but mild annoyances I didn’t expect to encounter.
What I did like
After a few days of opening the account, a Fidelity rep called up to make sure I was doing. That was a nice touch. Fidelity emails you about any activity on your account. I think that is very important to avoid fraud and id thefts.
The Fidelity website organization is pretty straightforward and not confusing. There are some research tools available, but I usually use other free online resources, so I can’t really say much about Fidelity’s. They aren’t too shabby though. Quite basic. No flash or even ajax (if you are technically inclined).
Overall, I do like Fidelity. Once you know how things work and what to expect, it isn’t too bad.