Fidelity
Fidelity International Travel Taxes

Two Reasons I Have Accounts With Fidelity

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

Fidelity
I use Fidelity as one of our family’s two brokerage firms

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.

Fidelity Gold Check Card
My Fidelity check card reimburses all ATM fees and charges no foreign transaction fee on ATM withdrawals overseas

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).

Donating stock or assets to Fidelity Charitable is super straightforward
Donating stock or assets to Fidelity Charitable is super straightforward

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!

Joe
Just an average joe trying to fly his family for less
http://www.asthejoeflies@gmail.com

9 thoughts on “Two Reasons I Have Accounts With Fidelity

  1. I’m not sure if this is true, but I think it is. The reason Fidelity mentions the 1% transaction fee for ATM withdrawals is because they go through Visa to do the currency exchange. So Visa charges a 1% transaction fee to do a conversion and Fidelity isn’t charging you anything. This charge won’t ever show up on your statement and it’s just embedded in the exchange rate. It’s still obviously the best way by far to get local currency (except for countries that have black market currency exchanges like Argentina). I’ve noticed a different exchange rate when I do an ATM withdrawal versus when I use my Capital One card, who I think supposedly reimburses the Visa transaction fee. It could be just that different banks are exchanging currency differently but I’ve attributed it to the Visa fee.

    1. I totally believe that’s possible and that’s actually what I originally assumed was the case (and still think might very well be). Here’s my datapoint though – I withdrew 450 BRL at that accursed airport ATM, that cost me $201.50 USD. Google’s current exchange rate (over a week later) says that should have cost $203.27, so it seems like I got a good rate and there doesn’t seem to be a 1% in there. Actually come to think of it, that rate seems a little too good…maybe my memory is hazy. I’m gonna need to pay more attention when I’m in Germany next month though to compile some more data points, will try to update!

      1. Just an update here. Took 200 Euros out of ATM in Germany, was charged $273.03 USD. Google at this moment says 200 Euro = $272.15. So looks like no 1% and a favorable rate!

  2. I have a Schwab account for roughly the same reasons: low-cost ETFs and a ATM-fee-refunded debit card with no forex fees. If Vanguard offered a similar debit card, I’d switch most of my money there. Vanguard has a sounder and lower-cost variety of index ETFs.

    I enjoy Schwab’s hold “music” too, which is stock market news. I got to listen to it while reporting fraudulent activity on a card (and clearing the card to be used for small stretches) in…. Brazil.

  3. Hi… My Fidelity card is the sames as yours, but green (its linked to my cash managment account). I noticed yours is gold. Just wondering if they are different or maybe you just have the older version of the card? Again, just wondering… thanks PS, I love mine too

    1. Not sure. Mine is old (and maybe that’s why it’s gold?) My wife’s, which I got more recently, is green as well

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