Is your hard-earned money working hard for you?

Value is key. Know what you pay for and what you get from your financial firm.

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Key takeaways

  • Got cash? Look for a firm that offers you choice, including a money market fund.
  • Investing in US stocks or ETFs? Find a firm that offers zero-commission trades, and the capability and commitment to improve the price you pay through quality trade execution.
  • Prefer mutual funds? Seek out funds with zero or low expense ratios.
  • Buying bonds? Work with a firm that offers low transaction costs and no hidden fees.
  • Shopping for a credit card? Consider one with 2% cash back, no ATM fees, free online bill pay, and rewards.

People look to their financial services firm to help them save and invest their hard-earned money and achieve their life goals. So it's critically important to understand if you're getting your money's worth. Getting the services you want—like a brokerage account, credit and debit cards, and financial advice—can help you build your wealth faster and achieve your goals.

"The key is to make sure your financial firm gives you true value, without hidden fees and higher prices that aren't transparent," says Kathleen Murphy, President of Personal Investing at Fidelity. "We are proud that Fidelity is recognized as the leader that puts our customers first, providing more value than other firms in very important ways that can add up to real money for you."

Want to get the most out of your financial services? Here are 3 key areas to focus on.

1. Earn more on your cash

Making your cash work for you can be an important, and sometimes overlooked, strategy to help improve your finances.

Look for relatively high rates. Ask your brokerage firm if they automatically sweep your cash into a low-paying, FDIC-insured bank account or give you the choice to automatically put that cash to work in a higher-yielding money market fund.

Fidelity is one of the only firms that automatically sweeps your cash into a money market fund when you open a new brokerage or retirement account, while many firms move that money into a much lower-yielding FDIC-insured bank account.1 At Fidelity, you can also choose higher-yielding options for money in your existing brokerage and retirement accounts.

Says Murphy: "Most other firms don't offer that choice and make a lot of money for themselves by paying you an extremely low rate for your hard-earned cash—and hope you don't notice."

How Fidelity compares: What you could save on trades

  Fidelity Schwab TD Ameritrade E*Trade
Yield as of 10/21/19
Yield may vary due to market conditions
Government Money market fund 7-day yield
Default Sweep APY
Default Sweep APY
Default Sweep APY
Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted. See current yield and most recent month-end performance for Fidelity® Government Money Market Fund SPAXX. Money market funds are not insured or guaranteed by the FDIC or any other government agency. Consider each product and its fees and features carefully.

2. Lower your investment costs

Costs shouldn't be the only factor when building your investment portfolio. However, they should be an important consideration in your overall investing plan. There are several ways to reduce your investing expenses. Consider the following:

  • Zero commissions. Why pay commissions when there's zero-fee online trading for US stocks, ETFs, and options, and zero account fees?
  • No or low fund fees. Seek lower fund fees to help maximize your returns.
  • Low bond markups. Look for low and transparent bond markups—with no hidden fees—so that you can potentially enhance your returns and know what you are buying.
  • Price improvement. Don't forget to seek a broker that has the capabilities to potentially enhance the value of your trade after you place an order.

At Fidelity, we offer zero-commission online trading for US stocks, ETFs, and options,2 zero account fees,3 low expenses on our mutual funds and bond pricing, as well as quality execution.

For example, Fidelity only charges $1 for online bond purchases, while 3 competitors studied by Corporate Insight have charged $14.55 more per bond on average.4 "On a typical bond trade of over 20 bonds, this can add up to several hundreds of dollars in savings per trade," says Richard Carter, Fidelity Vice President, Fixed Income Products and Service.

What's more, the average price improvement on stock trades at Fidelity is almost 6 times higher than the industry average for a 1,000-share equity order (see graph).5 To estimate your potential savings, use our calculator below.

Says Murphy: "We believe you should benefit, not your broker."

See how the savings can add up

Average price improvement1

For a 1,000-share equity order

Whether you trade a lot or a little, Fidelity's price improvement can help you save.

3. Get smart about daily spending

You interact with your financial services company nearly every time you buy something—by using a credit card, withdrawing cash from an ATM, or by making a mobile payment. The more you save when spending, the more you will be able to save, spend, and invest in your future.

When it comes to spending, here are some things to consider:

At Fidelity, you can get a 2% cash-back credit card, free online bill pay, no ATM fees, and rewards too.

Small amounts can add up

Consider 2 hypothetical affluent investors, Sally and Sam. Both are 60, had successful careers, and have accumulated $1,600,000. They each have $100,000 in cash, $900,000 in stock mutual funds, $500,000 in corporate and municipal bonds, and $100,000 in individual stocks. They both buy stock mutual funds 5 times a year and individual stocks 10 times a year. They both have a 10-year bond ladder with 10 rungs of $50,000 in bonds that mature each year and they reinvest the proceeds. Both also spend $3,000 a month using a credit card, which they pay off every month.

But Sally is value conscious, while Sam is not, and he doesn't work with a high-value broker like Fidelity.

Sally invests $900,000 in one of Fidelity's zero-expense-ratio stock index mutual funds. Sam invests in a large-cap stock mutual fund with a 0.97% expense ratio, the average for large-cap blend funds, according to Morningstar.6

Sally benefits from Fidelity's $1 per bond markup, while Sam pays $15.55 at one of the firms studied by Corporate Insight.4 Fidelity charges Sally $50 in mark-ups each year, as her bonds mature and the funds are reinvested in the ladder, for a total of $500. Sam’s firm charges him $777 in markups each year for the same trades. Sally saves $7,270 over 10 years.

Sally also enjoys price improvement on her stock trades at Fidelity, averaging $17.20 for a 1,000-share trade. Sam only gets $2.89, the industry average.5 Finally, Sally has a 2% cash-back card, and Sam does not.

What's the bottom line? Over 10 years in our hypothetical example, Sally ends up $99,487 ahead of Sam. See the breakdown below.

And that advantage does not include the higher yield potential Sally would enjoy by opening a new Fidelity retail brokerage account, where her cash is automatically swept into a money market fund with a current 7-day yield of 1.57%, as of 10/21/2019. Meanwhile, the cash in Sam’s brokerage account is swept into one of the lower yielding FDIC-insured bank products featured above with an annual percentage yield (APY) of only 0.01%, as of 10/21/2019.

Remember, the story of Sally and Sam is hypothetical, based on recent data and industry averages, and is not a recommendation. Rates will change. And there is no guarantee you could get the same savings. Any potential advantages you might realize would be based on your individual investments and trades.

Choose the best financial path

Don't compromise your hard-earned money. Choose the financial path that gives you the value you deserve.

Whether you are a do-it-yourself investor or prefer to work with a professional, look for a financial firm that can bring all these benefits together, leverage their price advantages, and help keep you on track with your financial plan.

You can research zero commissions, no- or low-fee funds, high-yielding money market funds, smart cash management options, and more on Prefer to work with a professional? Fidelity advisors can help you build a financial plan that meets your personal goals, leveraging the firm's low costs and quality products. If you need help, a Fidelity representative can guide you along the way.

Next steps to consider

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