Are you tired of manually transferring funds to your investment accounts every month? Do you wish you could automate the process and let your money grow without lifting a finger? Look no further! In this article, we’ll show you how to setup automatic investment in Fidelity, one of the largest and most reputable investment firms in the world.
Why Automate Your Investments?
Automating your investments can have a significant impact on your financial well-being. By setting up a regular investment schedule, you can:
- Take advantage of dollar-cost averaging: By investing a fixed amount of money at regular intervals, you’ll be buying more shares when prices are low and fewer shares when prices are high. This can help reduce the overall cost per share over time.
- Avoid emotional investing: When you automate your investments, you’re less likely to make impulsive decisions based on market volatility.
- Build discipline and consistency: Automatic investments can help you stay committed to your long-term investment goals, even when markets get volatile.
Getting Started with Fidelity
Before we dive into the setup process, make sure you have a Fidelity account. If you don’t have one yet, you can open a brokerage account or an IRA account on Fidelity’s website.
Fidelity Account Types
Fidelity offers a range of account types to suit different investment goals and needs. Some popular options include:
- Brokerage accounts: For general investing and trading
- IRAs (Individual Retirement Accounts): For retirement savings
- Roth IRAs: For tax-free retirement growth
- 529 college savings plans: For education expenses
Setting Up Automatic Investments in Fidelity
Now that you have a Fidelity account, let’s get started with setting up automatic investments.
Step 1: Log in to Your Fidelity Account
Log in to your Fidelity account online or through the mobile app. If you’re using the app, make sure you have the latest version installed.
Step 2: Navigate to the “Accounts” Section
Once you’re logged in, click on the “Accounts” tab at the top of the page. This will take you to a dashboard showing all your Fidelity accounts.
Step 3: Select the Account You Want to Automate
Choose the account you want to set up automatic investments for. Click on the account number or name to access the account details page.
Step 4: Click on “Set Up Automatic Investments”
Scroll down to the “Account Activity” section and click on “Set up automatic investments.” This will take you to a new page where you can configure your automatic investment settings.
Step 5: Configure Your Automatic Investment Settings
On this page, you’ll need to specify the following details:
- Frequency: Choose how often you want to invest, such as monthly, quarterly, or annually.
- Amount: Enter the amount you want to invest automatically. You can choose a fixed dollar amount or a percentage of your account balance.
- Fund selection: Select the investment fund(s) you want to invest in. Fidelity offers a range of index funds, ETFs, and mutual funds to choose from.
- Start date: Select the date you want your automatic investments to begin.
Example: Setting Up a Monthly Automatic Investment
For example, let’s say you want to invest $500 every month in the Fidelity 500 Index Fund (FUSAEX). Here’s how you would configure your settings:
- Frequency: Monthly
- Amount: $500
- Fund selection: Fidelity 500 Index Fund (FUSAEX)
- Start date: 1st of every month
Step 6: Review and Confirm Your Settings
Review your automatic investment settings carefully to ensure everything is correct. If you need to make any changes, now is the time to do so.
Once you’re satisfied with your settings, click “Confirm” to set up your automatic investments. Fidelity will then deduct the specified amount from your linked funding source (e.g., your bank account) and invest it in your chosen fund.
Tips and Variations
Here are some additional tips and variations to consider when setting up automatic investments in Fidelity:
- Take advantage of fractional shares: Fidelity allows you to invest in fractional shares, which means you can invest smaller amounts of money and still diversify your portfolio.
- Consider a lump sum investment: If you receive a windfall or inheritance, consider investing a lump sum in addition to your regular automatic investments.
- Monitor and adjust: Regularly review your automatic investment settings to ensure they’re still aligned with your financial goals and risk tolerance. Adjust as needed to stay on track.
Common Errors and Troubleshooting
If you encounter any issues while setting up automatic investments in Fidelity, here are some common errors and troubleshooting tips:
- Error: Insufficient funds: Make sure you have sufficient funds in your linked funding source to cover your automatic investment amount.
- Error: Invalid fund selection: Double-check that you’ve selected a valid investment fund and that it’s eligible for automatic investments.
- Error: Invalid start date: Ensure that your start date is in the correct format (MM/DD/YYYY) and that it’s at least one business day in the future.
Conclusion
Setting up automatic investments in Fidelity is a straightforward process that can help you build wealth over time. By following the steps outlined in this article, you can take advantage of dollar-cost averaging, avoid emotional investing, and build discipline and consistency in your investment approach. Remember to review and adjust your settings regularly to ensure they’re still aligned with your financial goals and risk tolerance. Happy investing!
What is Automatic Investment in Fidelity?
Automatic investment in Fidelity is a convenient feature that allows you to invest a fixed amount of money at regular intervals, without having to manually initiate the transaction every time. This feature enables you to automate your investments, making it easier to stick to your investment plan and avoid emotional decisions based on market fluctuations.
By setting up automatic investments in Fidelity, you can take advantage of dollar-cost averaging, which involves investing a fixed amount of money at regular intervals, regardless of the market’s performance. This strategy helps reduce the impact of market volatility on your investments and can lead to lower average costs over time.
What are the benefits of setting up Automatic Investment in Fidelity?
Setting up automatic investments in Fidelity offers several benefits, including convenience, discipline, and the potential for higher returns. By automating your investments, you can ensure that you invest a fixed amount of money regularly, without having to remember to do so. This helps you stick to your investment plan and avoid procrastination.
Additionally, automatic investments can help you take advantage of dollar-cost averaging, which can lead to lower average costs over time. This strategy can be particularly beneficial in a volatile market, as it enables you to invest in a disciplined manner, without trying to time the market.
How do I set up Automatic Investment in Fidelity?
To set up automatic investments in Fidelity, log in to your account and navigate to the “Accounts & Trade” section. From there, select the account you want to set up automatic investments for, and click on “Set up automatic investments” or “Transfer money.” Follow the prompts to specify the amount, frequency, and timing of your investments.
You can choose to invest a fixed amount of money at weekly, bi-weekly, or monthly intervals, and select the specific date of the month for the transfer to occur. You can also choose to invest a percentage of your paycheck or a fixed amount from your bank account.
Can I change or cancel my Automatic Investment in Fidelity?
Yes, you can change or cancel your automatic investments in Fidelity at any time. To do so, log in to your account and navigate to the “Accounts & Trade” section. Select the account for which you want to modify or cancel the automatic investment, and click on “View/Modify” next to “Automatic investments.”
From there, you can modify the amount, frequency, or timing of your investments, or cancel the automatic investment feature altogether. Please note that if you cancel your automatic investment, you will need to manually initiate future investments.
Is Automatic Investment in Fidelity secure?
Yes, automatic investments in Fidelity are secure. Fidelity is a reputable online brokerage firm that takes the security of its customers’ accounts and transactions seriously. The firm uses state-of-the-art security measures, including encryption and firewalls, to protect its customers’ personal and financial information.
In addition, Fidelity is a member of the Securities Investor Protection Corporation (SIPC), which provides limited insurance coverage for customers’ securities accounts. This means that in the unlikely event of Fidelity’s insolvency, your investments are protected up to $500,000, including $250,000 in cash claims.
Are there any fees associated with Automatic Investment in Fidelity?
Fidelity does not charge any fees for setting up or maintaining automatic investments. However, you may be subject to other fees associated with buying or selling securities, such as transaction fees or management fees.
It’s essential to review the fees associated with your investments before setting up an automatic investment plan. You can find more information on Fidelity’s fees and commissions on their website or by contacting their customer service.
Can I set up Automatic Investment in Fidelity for my IRA or 401(k) account?
Yes, you can set up automatic investments in Fidelity for your IRA or 401(k) account. In fact, automating your retirement savings can be an excellent way to build wealth over time.
To set up automatic investments for your IRA or 401(k) account, log in to your account and follow the same steps as you would for a brokerage account. You can specify the amount and frequency of your contributions, and choose from a range of investment options, such as mutual funds, exchange-traded funds (ETFs), or index funds.