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Is Fidelity Investments Safe and Legitimate Firm? Is Fidelity a Scam/Fraud? Is it FDIC/SIPC Insured? Fidelity BBB Rating.

Is Fidelity Investments Safe?

After collapse of Lehman Brothers, Merrill Lynch, MF Global and other financial giants the sense of security many people had in most of United States financial companies is gone. Maybe if the firm is considered "too big to fail" then one could put his or her savings there? But who is "too big to fail"? With which companies could investors now safely invest their money and have a peace of mind?

Fidelity Investments is a firm that have never asked government for a bailout and came out of Great Recession stronger than ever. It has been for many years one of the five largest brokerage houses in the United States and it keeps growing. You can read detailed review of their brokerage account under this link.

Is Fidelity Investments SIPC Insured And FINRA Regulated?

As a member of FINRA, Fidelity Investments has to comply with strict government imposed rules aimed to keep brokerage companies and their clients' accounts safe and sound. As a member of SIPC (The Securities Investor Protection Corporation), Fidelity provides insurance in case of the firm's bankruptcy on customer accounts of up to $500K, including up to $250K for cash balances. So unless client's balance is over that amount he of she has nothing to worry about.

Is Fidelity FDIC Insured?

Fidelity Cash Management, Health Savings, and eligible IRA accounts have a Federal Deposit Insurance Corporation (FDIC, U.S. government agency that insures cash deposits at FDIC member banks) insurance of up to $250,000 per account.

Fidelity BBB (Better Business Bureau) Rating

Fidelity Investments' BBB (Better Business Bureau) rating is C-. The details could be seen at this link. Out of 256 closed complaints at BBB, 197 were problems with service, and 29 were billing issues. This is one of the lowest Better Business Bureau ratings for brokerage houses.


Account deposits of $50,000 to $99,999 will receive 300 free trades; account deposits over $100,000 of net new assets will receive 500 free trades. Trades must be used within 90 calendar days of being credited to the customer's account. Account holders must maintain a minimum account balance of $50,000 of net new assets for the 300 free trade offer or $100,000 of net new assets for the 500 free trade offer (minus any losses related to trading or market volatility) for at least nine months from the date on which the trades are credited to the account, otherwise commission charges may be incurred retroactively on free trade executions based on the customer's applicable commission rate

Fidelity Reviews

Before opening an account at the firm, we advise to read Fidelity Investments review. There we list investing commissions and important fees, areas where company excels and where it is lacking, and also we describe trading and research amenities.

Fidelity's Cash Management account review could be found here.

Fidelity Pros

  • No surcharges on stocks under $1, large orders, or after-hours trading
  • Great investment research tools with large selection of independent research from 12 firms
  • Good selection of commission-free mutual funds
  • Free DRIPs (dividend reinvestment plans)
  • No account maintenance or inactivity fees
  • Great customer service
  • Good banking services (checking, savings accounts, and credit cards)
  • 91 commission-free ETFs

Fidelity Cons

  • Very high commissions - $49.95 ($75 for some funds) - to purchase non-Fidelity mutual funds
  • $12 annual Low Balance Fee for each noncore Fidelity mutual fund if balance is under $2,000
  • High margin rates
  • Advanced trading platform, Active Trader Pro, is available only to clients making 36+ trades per year
  • High $2,500 minimum to open an account

Updated on 7/20/2017.

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