In this step-by-step guide, I will walk through the steps to set up automatic investing with Fidelity. But before I do, I want to highlight the primary reasons I love to use automatic investing to help me reach my $10M FI/RE goal by age 40 .
Dollar-cost averaging (DCA). By consistently investing a fixed dollar amount every week or month, I get the sweet benefit of dollar-cost averaging. DCA is where, instead of investing a lump sum into the market all at once, you spread out that contribution over a period of time in the hopes of reducing the impact of market volatility.
Less stress. So many people are hung up by daily swings in the stock market. To me, that can be very, very stressful. By auto-investing, I don’t have to worry about that. My money just gets invested on a fixed schedule, no matter how high or low the market is. Since my investing horizon is long, I can leave my investments on auto-pilot more or less. I just have to keep an eye on the mutual funds I invest in by tracking their performance over the years and their expense ratios.
Out of sight, out of mind. Most people are tempted to spend money they see. By automatically withdrawing money out of my bank accounts, I don’t have much chance to spend extra income.
Lack of discipline. To invest consistently, one has to be disciplined to transfer money into a brokerage account and invest over time. Most people don’t have the time or habits to do this regularly and, therefore, miss out on potential growth by sitting on idle cash. By auto-investing, I don’t have to think about this anymore; my money just gets socked away into mutual funds on a regular basis.
Now that we know how powerful auto-investing can be, let’s walk through the motions to get it all set up!
Prefer a video walkthrough? Watch the quick tutorial below, or scroll down to follow along with the complete step-by-step screenshots:
Before proceeding, note that you can currently only auto-invest into mutual funds you already own. If you don’t own any mutual funds yet, make an initial one-time purchase into at least one index fund before configuring recurring transfers. Compare Fidelity's top zero-fee funds below:
Compare Fidelity Zero-expense ratio index funds (FZROX, FZILX) with classic Vanguard ETFs (VTI, VXUS) across 3 hands-off portfolio models.
Login to your Fidelity account and go to https://www.fidelity.com/cash-management/automatic-investments .
It should take you to https://digital.fidelity.com/ftgw/digital/auto-invest , where you will see a list of your accounts.
Click on the account you wish to set up automatic investing for. A dialog will appear with several options: by clicking on the link for the account you wish to set up automatic investing for. From there, a dialog should appear with several options:
a) Transfer funds from an external bank account. This would simply transfer money from your bank account to your investment account, but it will not invest that cash upon transfer.
b) Transfer and then invest funds from an external bank account . This is the one I do. It performs (a) and automatically invests it in a mutual fund for me.
c) Invest funds from core position. This is a way to auto-invest funds already sitting in your investment account.
For the purposes of this guide, I will proceed by selecting option 3b. Fidelity will then take you to the page to actually configure your auto-investing schedule. It should look something like this:
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If you want to transfer funds from a bank account you haven’t used previously, you’ll need to go through Fidelity’s step-by-step instructions by clicking on the “ Set up Electronic Funds Transfer” link. Once you add it, return to this page.
Select which bank you wish to transfer money from.
Choose where your money goes:
Enter an amount you want to automatically transfer and invest. Be careful not to overextend yourself! You can always start small and increase this amount at a later point. The minimum amount you can auto-invest is $10.
This is where you can customize your auto-investing schedule. The frequencies available for your choosing only indicate monthly or quarterly, but you can actually get this down to daily or weekly if you really wanted to, by setting up multiple schedules!
Note
Click “Next” to review and finalize your schedule. Here, you get to review your schedule and finalize it. After you finalize your schedule, you can review, edit, and even skip specific months if you want.
Congratulations! That’s it. You’ve successfully set up your automatic investments!
Note
Disclaimers
Quick answers to common questions, technical edge cases, and tax rules.
Fidelity supports recurring automated investments for both mutual funds and individual stocks/ETFs (including fractional shares). While traditional automatic plans historically prioritized mutual funds like FXAIX and FZROX, Fidelity now lets you set up automated dollar-based purchases of exchange-traded funds with a $1 minimum.
Yes. In the "Transfers and Investments" workflow, you can choose "Transfer & Invest" with your linked external checking account as the funding source. Fidelity will pull the designated dollar amount via ACH on your schedule and immediately purchase your target funds.
The minimum recurring automated investment is only $10 per fund for mutual funds and $1 for ETFs or fractional stock purchases, making automated dollar-cost averaging accessible for any budget.
Log into Fidelity, navigate to "Accounts & Trade" > "Transfers", and click on "Manage recurring transfers". From there, you can adjust the dollar amount, modify frequency, change dates, or delete the schedule anytime with zero penalties.
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