Two Reasons I Have Accounts With Fidelity

Disclosure: I receive no compensation for anything in this post and thoughts and opinions are my own.

After I got back from my trip to Brazil, I spent some time poking around the Saverocity forums (which I highly recommend signing up for!) and catching up on my RSS reader. While the forums were more a fun diversion and look into some of the interesting things people are doing out there, a few posts from Saverocity really gave me some food for thought. Three posts that really caught my eye were Kenny and Joe’s posts about travel savings accounts (here and here) and also Matt’s post about wanting to beat the system everywhere.

These posts have inspired me to do things:

1) Start a travel savings account

2) Share with readers more about how I personally try to beat the system. I’m certainly not as creative and fiscally knowledgeable as those other guys, but I do have one or two simple tricks to share.

So, one way I try to maximize travel savings is through my Fidelity Investments account. There are two main reasons I keep this account. Investment wise, I generally stick to indexing and rebalancing, which means that making the most money is in large part a function of the amount I pay in fees (or don’t pay). Vanguard generally offers the lowest fees and we have an account there, but I still feel the Fidelity account is worth keeping for two reasons.

The first reason I keep my Fidelity account is the reason most directly related to travel. If you have a Fidelity Debit Card, officially the Fidelity Gold Check Card, you receive reimbursements of all ATM fees (provided you have an account with Fidelity). This applies whether you have an investment account or a cash management account. Now, the terms and conditions state that “there is a foreign transaction fee of 1% which is not waived” but that has not been the practice in my experience. In fact, when I called to let Fidelity know I was in Brazil, they explicitly told me that I would not be charged a foreign transaction fee when taking money out of an ATM, but I would be charged the 1% fee on purchases. It still could be hard coded into the exchange rate, but overall I still save a decent chunk of change getting cash overseas thanks to this card. (Also of note, Fidelity’s fraud department was totally on top of things when my card got hacked in Brazil).

The second reason I keep the account is it is easy to use in concert with my Fidelity Charitable account. If you’re not familiar with the reasoning behind why donating stock to charity is a sound financial strategy, I encourage you to read what Matt wrote on the subject here. Simply put, donating stocks that have appreciated to charity helps reduce tax liabilities, saving you money. I find Fidelity is way more user-friendly than Vanguard, so I opened my charitable account with them (I just find Vanguard’s website too clunky for my tastes). It’s very simple to sell assets into the charitable account (generating the tax savings) and equally simple to recommend grants (donate the money to charity).

If you regularly contribute to charities and have an investment portfolio, I’d highly recommend looking into opening a charitable account. Most of the bigger brokerages offer them. The money you can save can then go into your travel savings account (hey, there’s an idea!).

Final Thoughts

While not earth shattering, avoiding foreign transaction and ATM fees while traveling overseas and saving some money on taxes are two simple ways I try to beat the system. Fidelity helps me to do that and I’m happy with them. I know Charles Schwab could offer me the same things, but I already had a Fidelity account when I started doing this so it just was easier this way. Oh yeah, Fidelity’s mile bonuses don’t hurt, either. Anyway, I know there are tons of saving strategies out there – this is just my personal one. Feel free to share yours in the comments!