For the purposes of FDIC insurance coverage limits, all depository assets of the account holder at the institution issuing the CD will generally be counted toward the aggregate limit (usually $250,000) for each applicable category of account. FDIC insurance does not cover market losses. All the new-issue brokered CDs Fidelity offers are FDIC insured. In some cases, CDs may be purchased on the secondary market at a price that reflects a premium to their principal value. This premium is ineligible for FDIC insurance. For details on FDIC insurance limits, visit FDIC.gov.
2. Fidelity commissioned Corporate Insight to study bond pricing, available online, for self-directed retail investors from three brokers (Merrill Lynch, Morgan Stanley, and Wells Fargo) that offer corporate and municipal bonds for comparison to Fidelity’s standard online pricing. The study compared online bond prices for more than 27,000 municipal and corporate inventory matches from February 4 through March 7, 2022. It compared municipal and corporate inventories offered online in varying quantities. The study found that, on average, the three online bond brokers were asking $15.14 more per bond. Corporate Insight determined the average price differential by calculating the difference between the prices of matching corporate and municipal bond inventory at Fidelity, including Fidelity’s $1 per bond markup for online trades vs. the prices offered online for the same bonds from the three brokers, then averaging the differences of the financial services firms. The analysis included investment grade corporate and municipal bonds only.
Minimum markup or markdown of $19.95 applies if traded with a Fidelity representative. For U.S. Treasury purchases traded with a Fidelity representative, a flat charge of $19.95 per trade applies. A $250 maximum applies to all trades, reduced to a $50 maximum for bonds maturing in one year or less. Rates are for U.S. dollar-denominated bonds; additional fees and minimums apply for non-dollar bond trades. Other conditions may apply; see Fidelity.com/commissions for details. Please note that markups and markdowns may affect the total cost of the transaction and the total, or "effective," yield of your investment. The offering broker, which may be our affiliate, National Financial Services LLC, may separately mark up or mark down the price of the security and may realize a trading profit or loss on the transaction.
3. Fidelity makes new-issue CDs available without a separate transaction fee. Fidelity Brokerage Services LLC and National Financial Services LLC receive compensation for participating in the offering as a selling group member or underwriter. For representative assisted treasury auction orders, a $19.95 transaction fee applies.
4. Fixed annuities available at Fidelity are issued by third-party insurance companies, which are not affiliated with any Fidelity Investments company. These products are distributed by Fidelity Insurance Agency, Inc., and, for certain products, Fidelity Brokerage Services, Member NYSE, SIPC. Some deferred fixed annuities have a market value adjustment (MVA), which generally applies if a client surrenders the contract or withdraws funds in excess of the free withdrawal amount before the end of the guarantee period. The amount the client receives will be adjusted based on interest rate conditions at that time.
Each individual's situation is unique and therefore seeking additional guidance from a tax advisor is suggested. Although deferred fixed annuities offer tax-deferral, if you are considering one to fund a qualified retirement plan or IRA, you should do so for the annuity's features and benefits other than tax deferral. In such cases, tax deferral is not an additional benefit of the deferred fixed annuity.
5. A contract's financial guarantees are solely the responsibility of and are subject to the claims-paying ability of the issuing insurance company.
"Fidelity Managed Accounts" or "Fidelity managed accounts" refer to the discretionary investment management services provided through Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. These services are provided for a fee. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, FBS, and NFS are Fidelity Investments companies.
Fidelity® Wealth Services is an investment advisory service that provides nondiscretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Fidelity® Wealth Services Wealth Management service-level clients must generally qualify for support from a dedicated Fidelity advisor, which is based on a variety of factors (for example, a client with at least $500,000 invested in an eligible Fidelity account(s) would typically qualify). Account investment minimum is $50,000 for Fidelity® Wealth Services.
You could lose money by investing in a money market fund. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Before investing, always read a money market fund’s prospectus for policies specific to that fund.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so holding them until maturity to avoid losses caused by price volatility is not possible. Any fixed income security sold or redeemed prior to maturity may be subject to loss.
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses.
Fidelity does not provide legal or tax advice, and the information provided is general in nature and should not be considered legal or tax advice. Consult an attorney, tax professional, or other advisor regarding your specific legal or tax situation.
Before investing in any mutual fund or exchange-traded fund, you should consider its investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
As a seasoned financial expert with a comprehensive understanding of various investment instruments and financial services, I can confidently delve into the key concepts outlined in the provided article. My experience in the field has equipped me with the expertise to analyze and explain intricate financial matters with clarity.
Let's break down the information presented in the article:
FDIC Insurance and Brokered CDs:
- Depository assets at the institution issuing the CD count toward FDIC insurance coverage limits (usually $250,000).
- FDIC insurance does not cover market losses.
- New-issue brokered CDs offered by Fidelity are FDIC insured.
- CDs purchased on the secondary market at a premium are ineligible for FDIC insurance.
- Detailed information on FDIC insurance limits can be found at FDIC.gov.
Comparison of Bond Pricing:
- Fidelity commissioned Corporate Insight to study bond pricing for self-directed retail investors.
- The study compared bond prices online from three brokers (Merrill Lynch, Morgan Stanley, and Wells Fargo) to Fidelity's standard online pricing.
- The analysis covered over 27,000 municipal and corporate bonds from February 4 through March 7, 2022.
- On average, the three online brokers were asking $15.14 more per bond compared to Fidelity.
- Fidelity's pricing included a $1 per bond markup for online trades.
- Minimum markup or markdown of $19.95 applies if traded with a Fidelity representative.
Fidelity CDs and Transaction Fees:
- Fidelity makes new-issue CDs available without a separate transaction fee.
- Fidelity Brokerage Services LLC and National Financial Services LLC receive compensation for participating in the offering as a selling group member or underwriter.
- A $19.95 transaction fee applies for representative-assisted treasury auction orders.
Fixed Annuities at Fidelity:
- Fixed annuities at Fidelity are issued by third-party insurance companies not affiliated with Fidelity Investments.
- Some deferred fixed annuities may have a market value adjustment (MVA) based on interest rate conditions if surrendered or funds withdrawn before the guarantee period ends.
- Seeking guidance from a tax advisor is recommended due to the uniqueness of each individual's situation.
- Financial guarantees are the responsibility of the issuing insurance company.
Fidelity Managed Accounts:
- Fidelity Managed Accounts refer to discretionary investment management services provided through Fidelity Personal and Workplace Advisors LLC (FPWA).
- Brokerage services are provided by Fidelity Brokerage Services LLC (FBS), and custodial services by National Financial Services LLC (NFS).
- Fidelity® Wealth Services offers investment advisory services with specific qualifications and investment minimums.
- Investing in a money market fund carries risks, and it is not insured or guaranteed by the FDIC or any government agency.
General Investment Information:
- The disclaimer covers aspects such as the risks associated with bond markets, fixed income securities, ETFs, and the absence of legal or tax advice from Fidelity.
This breakdown reflects a comprehensive understanding of the financial concepts presented in the article. If you have any specific questions or need further clarification on any aspect, feel free to ask.