The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: nvmama on May 31, 2014, 06:25:58 AM
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I recently opened a Fidelity Amex credit card, for the 2% cash back. I am planning on having the cash rewards automatically put into a fidelity investment account. So I opened a fidelity investment account. So far I have not funded it yet. I was thinking about putting the rewards in a taxable investment account. I have read that Fidelity allows purchases of certain ETFs commission free, so I planned on using the rewards in this manner. When doing further reading it mentioned that I need $2500 with fidelity to purchase the ETFs commission free. My question is, does that $2500 have to be invested in the ETF that you want to purchase or invested any way in Fidelity or simply in the hold account. Any in site in this would be helpful as I am very new to Fidelity. Thanks.
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I have used Fidelity for six years and love them. I also used to use their Amex card, it has a nice cash back award.
I think the minimum purchase amount is because there is no commission. One thing to consider, Vanguard's ETFs have a lower expense ratio, so depending on the amount, it may be worth paying the $7 commission and getting the lower expense ratio ETF. You'll pay one way or another.
Good luck!
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The $2500 wasn't a minimum purchase amount for the ETF. I wasn't actually clear on what it was. I heard that one of the great thing about Fidelity is that you can make smaller fee free ETF purchases. Maybe it is just a base amount you need in your Fidelity account....anyone know?
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Call Fidelity and ask them to clarify. I have used the Fidelity 2% Visa card for several years and it is great because they put the rebate money directly into your account each month. Also, the iShares core funds that are commission free are VERY low expense ratios, so I would recommend them.
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It must be an account minimum
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It must be an account minimum
+1.
Dump your emergency fund in there, and keep it in a money market account within your brokerage account, perhaps?
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I use Fidelity and also use their amex card. I mostly stick to the Spartan SP500 mutual fund and have not gotten into ETFs. At least for most the Fidelity mutual funds that have no transaction fee, they require a $2,500 minimum initial purchase and a minimum balance of $2,000 in the event the fund drops in value.
Also, if you want to invest elsewhere, there are no restrictions on transferring your cash back reward out of your Fidelity account as soon as it arrives. I do this often when I haven't maxed out my Roth IRA, which is not held with Fidelity.
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I use Fidelity and also use their amex card. I mostly stick to the Spartan SP500 mutual fund and have not gotten into ETFs. At least for most the Fidelity mutual funds that have no transaction fee, they require a $2,500 minimum initial purchase and a minimum balance of $2,000 in the event the fund drops in value.
Also, if you want to invest elsewhere, there are no restrictions on transferring your cash back reward out of your Fidelity account as soon as it arrives. I do this often when I haven't maxed out my Roth IRA, which is not held with Fidelity.
I thought there was a monthly transfer option of at least $200/month that waved that initial purchase requirement.
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I thought there was a monthly transfer option of at least $200/month that waved that initial purchase requirement.
That sounds like a great alternative too. I didn't know about that option.
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I thought there was a monthly transfer option of at least $200/month that waved that initial purchase requirement.
That sounds like a great alternative too. I didn't know about that option.
I know it works in the IRAs and I would assume it works in the taxable accounts but I don't know. Maybe they treat them differently? I looked and can't see anything that states it clearly.