How to Set Up Fidelity Recurring Investment?

Do you know that automating your investments is one of the ways through which you improve your chances of wealth creation in the long run?

A Morningstar report indicates that investors who continually contribute to their portfolios with commitment, ignoring market ups and downs, perform better than those trying to time the markets. Fidelity’s recurring investment option is powerful for staying consistent, growing through automation, and also simplifying the path that leads you toward wealth.

This guide will discuss how Fidelity’s recurring investments work, their benefits, the process to set them up, and how you can make them work for your financial future.

What Is Fidelity Recurring Investment?

A Fidelity recurring investment is an automated process where you invest a fixed amount of money regularly weekly, monthly, or quarterly into stocks, ETFs, or mutual funds in your portfolio. It’s like putting your financial goals on autopilot.

This feature works smoothly by deducting your chosen amount from your linked bank account and investing it in your preferred securities. Whether you’re a beginner or an experienced investor, Fidelity’s recurring investment option alleviates the pressure of manual investing and promotes consistency in your strategy.

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Benefits of Recurring Investments with Fidelity

1. Simplicity and Automation
   Life can get busy, and remembering to invest regularly can be challenging. With Fidelity’s automation, your investments are never missed, even if you forget.
2. Dollar-Cost Averaging
   By investing regularly, you’re buying more shares when prices are low and fewer when prices are high. This reduces your average cost per share over time.
3. Flexibility
   You can customize your recurring investments based on amount, frequency, and asset type, whether stocks, ETFs, or mutual funds.
4. Emotional Discipline
   One of investors’ most prominent challenges is emotional decision-making during market fluctuations. Automation keeps you focused on the long term.

Pro Tip: If you’re hesitant, start small. Even $50 per month can increase significantly over time through compounding returns.

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How to Set Up Recurring Investments with Fidelity

Setting up a recurring investment through Fidelity is simple and user-friendly. Here’s a step-by-step guide:

1. Log In to Your Fidelity Account
Visit Fidelity’s website or use the Fidelity mobile app. To access your account dashboard, enter your username and password.

2. Access the Automatic Investments Section
After logging in, go to the “Accounts & Trade” menu at the top of the page. Select “Automatic Investments” and click on it. This section allows you to manage or set up recurring account investments.

3. Choose Your Investment Account
Select the account you want to use for your recurring investment. Fidelity supports individual brokerage accounts, retirement accounts like IRAs, and education accounts like 529 plans.

4. Pick the Fund, ETF, or Stock
Choose the mutual fund, ETF, or stock you wish to invest in from the list of available investments. If you’re unsure, Fidelity provides tools to guide you toward suitable options based on your financial goals.

5. Set Your Contribution Amount and Frequency
Decide how much you want to invest and how often (weekly, monthly, or quarterly). For example:

• Amount: $100 per investment cycle
• Frequency: Monthly, on the 15th of each month

6. Review and Confirm Your Settings
Double-check the details you entered, including the amount, frequency, investment type, and funding account. Once confirmed, click “Submit” to activate your recurring investment plan.

7.  Fidelity Takes Care of the Rest
After setup, Fidelity will automatically transfer the set amount from your bank account and invest it in your chosen securities on the scheduled dates. You’ll receive notifications upon each transaction, and you can adjust or pause your investments anytime.

Example Scenario

Suppose you want to invest $200 monthly in the Fidelity ZERO Total Market Index Fund (FZROX). By setting up a recurring investment, Fidelity will automatically withdraw $200 from your linked account on your chosen date each month and purchase FZROXshares for you.

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Fidelity Recurring Investment Options

Stocks and ETFs

Fidelity supports recurring investments in individual stocks and ETFs, such as FZROX (Fidelity Zero Total Market Index Fund) or FSKAX (Fidelity Total Market Index Fund). This is an excellent option for building a diversified portfolio over time.

Mutual Funds

Fidelity’s mutual funds are an excellent choice for those who prefer professionally managed investments. These funds spread risk across multiple assets, making them ideal for long-term goals.

Comparison

Investment Option	Best For	Advantages
ETFs	Beginners, DIY investors	Low expense ratios, diversification
Mutual Funds	Long-term planners	Professional management, stability
Stocks	Risk-takers, strategists	Potential for high returns

Recurring Investment Calculator

Are you wondering how much your recurring investments could grow? Fidelity’s tools, such as its recurring investment calculator, can help you estimate your future portfolio value.

For instance, if you invest $200 monthly in an ETF with an average return of 8%, your portfolio could grow to $36,000 in 10 years!

Use this tool to experiment with different amounts and timeframes and see how small contributions can add up over time.

Fidelity Recurring Investment Withdrawal Options

Fidelity’s recurring investments offer flexibility, allowing you to modify or withdraw based on your changing circumstances:

1. Modify Contributions
   You can alter the frequency of your recurring investments or the amount you pay.
2. Pause Without Canceling
   Fidelity allows you to pause your recurring investment plan if you need a financial break. This keeps your plan intact without permanently canceling it so you can resume later.
3. Withdraw Funds
   Withdrawing funds is straightforward for regular brokerage accounts, but early withdrawals may incur penalties or taxes for retirement accounts like IRAs. Always check the rules for your specific account type.
4. Understand Tax Implications
   Withdrawals from taxable accounts might trigger capital gains taxes, while withdrawals from retirement accounts could involve taxes and penalties. Consult a financial advisor to understand the implications.

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Real-Life Example: How Fidelity Recurring Investment Transforms Portfolios

Emily, a close friend, decided to automate her investments with Fidelity when she turned 30. She set up a recurring investment of $150 per month into the FZROX ETF—a zero-expense-ratio fund. Over five years, her portfolio grew to around $15,000 thanks to consistent contributions and market growth.

What made her plan so effective? The automatic deductions made saving effortless, and she didn’t have to worry about timing the market. 

“Begin small, start early, and let automation and compounding do the heavy lifting,” Emily said.

Fidelity vs. Other Investment Platforms

Feature	Fidelity	Vanguard	Schwab
Recurring Stock/ETF Option	✅	❌	✅
Account Fees	None	Low	Low
Mobile Experience	Excellent	Average	Good

Fidelity is praised for its no-fee accounts and user-friendly platform, making it an excellent choice for new and experienced investors.

Overcoming Challenges with Fidelity Recurring Investments

While Fidelity’s recurring investment plans offer significant benefits, they have some challenges. Here’s a breakdown of potential challenges and practical tips for success:

Challenges:

1. Overcommitting: It’s easy to set an investment amount that strains your monthly budget.
2. Market Volatility: Watching your portfolio fluctuate during market downturns can cause anxiety and lead some investors to abandon their plans prematurely.
3. Forgetting Adjustments: Over time, your financial goals and income may change, and failing to adjust your contributions might leave you over- or under-invested.

Tips for Success:

1. Set Realistic Goals: Start with an amount that comfortably fits your budget. Over time, even modest efforts can have a significant impact.
2. Embrace Long-Term Thinking: Understand that market ups and downs are regular. Patience and consistency are crucial to reaping the benefits of compounding.
3. Review Regularly: Schedule an annual review to ensure your investments align with your changing goals.
4. Automate Smartly: While automation simplifies the process, monitoring your portfolio and making informed decisions is essential.

The Bottom Line

Automating your investments through Fidelity is an innovative and disciplined way to build long-term wealth. Whether investing in ETFs, mutual funds, or individual stocks, recurring investments simplify the process, making staying consistent with your financial goals more accessible.

Remember, the power of investing lies in time, consistency, and compounding. There’s no “perfect time” to start—what matters is beginning today. Take that first step, set up your recurring investment, and let Fidelity guide you toward financial independence.

Frequently Asked Questions