Fidelity Minimum Initial Investments

According to the latest Fidelity Investments Select Funds Prospectus, all of the Select funds require a $2,500 minimum initial investment for traditional and Roth IRA accounts, but they require only a $500 minimum initial investment for SEP-IRA and Keogh accounts. In practice, however, Fidelity’s online trading system allows minimum initial investments of $500 for new positions in Select funds for traditional IRAs and Roth IRA accounts, as well. At the time of this posting, Fidelity’s online trading system does not seem to work correctly for Select Utilities, for which it still requires a minimum initial investment of $2,500 for any IRA or Keogh account, in exception to the prospectus.

If you exchange between $500 and $2,000 into a new position in one of the Select funds online, you’ll receive a warning that your account may be subject to a small balance maintenance fee of $12. According to the Select Fund Prospectus, account fund balances are evaluated in November or December each year, and those with balances less than $2,000 are charged the $12 fee, even those in SEP-IRA and Keogh accounts. Accounts opened after September 30 are not subject to the small balance maintenance fee for that calendar year. Also, if you have at least $25,000 in assets at Fidelity, small balance maintenance fees for your accounts are waived.

In our FAQs about getting started and rebalancing, we discuss minimum amounts you should invest when using the Fundranker system for various types of accounts. Because of how Fidelity’s online trading system treats traditional and Roth IRA accounts in exception to the Select Funds Prospectus, in practice you can lump traditional and Roth IRA accounts in with the minimums we discuss for SEP-IRA and Keogh accounts.

Posted 6/18/09 1:34pm ET in Fidelity Investments, Fundranker

Comments (0)

Submit a Comment