Fidelity Automatic Investing Plan

2020: Does Fidelity offer automatic investment plan (AIP)? Fidelity Investments dollar cost averaging program (DCA) setup and review. Fees on ETFs, stocks, and mutual funds weekly/monthly/quarterly auto investing.

Does Fidelity Offer Automatic Investment Plan?

Fidelity traders have access to a very user-friendly automatic investing plan (AIP). The brokerage house offers both a pdf form and an on-line enrollment form, and signing up takes just a few minutes.

Eligible Products

Fidelity’s automatic investment plan can be used to purchase additional shares of mutual funds that you already own. Both transaction-fee funds and no-transaction-fee funds are eligible. Stocks and ETF’s cannot be purchased with Fidelity’s AIP.

NTF funds are free to purchase in an automatic investment plan, although transaction-fee funds carry a $5 charge. There are 3,746 funds on the Fidelity website that carry no transaction fee, and a total of 11,191 products. Mutual funds with front-end sales charges (typically these are Class A funds) are ineligible.


Fidelity Dollar-Cost Averaging

Fidelity’s automatic investment plan is a type of dollar-cost averaging. It uses a fixed-purchase amount each month instead of a fixed amount of shares. Using this method results in more shares being purchased when the NAV is low. It also allows fractional shares to be purchased, something that mutual funds have always offered, but which is not available with stocks and ETF’s.

For example, you could buy $100 each month of JAGTX, the Janus Henderson Global Technology Fund. It carries no transaction fee normally, so AIP purchases would cost nothing.

Funding the Regular Purchases

In order to pay for regular mutual fund purchases, you will need to supply regular deposits into your Fidelity brokerage account. To do this, simply go to ‘Accounts & Trade’ at the top of the broker’s website. In the drop-down menu, click on ‘Account Features’ and choose ‘Automatic Investments’. Here you will be able to establish a regular transfer from an external bank account.

The same on-line form also allows you to set an investment schedule for a specific fund. A stop date can be added if you want the program to end at some point in the future. The purchase frequency can set to monthly, quarterly, or certain months. The purchase date can be any date of the month.

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Other Fidelity AIP Information

Fidelity’s automatic investment plan can be used with a regular brokerage account or an Individual Retirement Account. All deposits into an IRA are coded for the current year. Also available are 529 and HAS accounts.

The broker provides a pdf form that can be used to sign up as well. You simply need to supply the mutual fund ticker symbol, along with the regular purchase amount, and the purchase frequency. An external bank account needs to be added to the form along with a deposit slip or voided check. Finally, the form needs to be mailed to the broker or taken to one of its branch locations.

Fidelity Automatic Investing Comparison

TD Ameritrade also has an automatic investment plan, but the broker provides zero information on it. Customers who want to add the program must call and talk to a representative over the phone.