With Schwab out of the mix now, Fidelity Investments is the only brokerage offering 2% cash back on all purchases on their Fidelity Rewards American Express cards. There are three flavors, depending on if you want the money deposited into a Fidelity taxable account, an IRA, or a 529 college savings plan. I personally have mine deposited into a 529 although I don’t think Fidelity’s 529s are the best… only $50 to open, no annual account fees, and tax-deferred growth for the kiddos! An IRA would be too confusing for me due to the stringent contribution limit rules. (If you’ve maxed out the limit, they say that they will automatically defer the rebate until the next year. But what if you have a partially phased-out limit due to income, and your limit is reduced to $2,350? How would they know that?)
However, since Fidelity started offering $7.95 trades and free iShares ETF trades, the taxable brokerage account option might be more attractive. You need $2,500 to open a Fidelity brokerage account, but after that you can take everything out with no minimum balance requirements.
I’ve found the number of merchants accepting American Express in the US to be pretty good these days, minus some small mom&pop food shops. You accrue rewards $50 a time, which can be redeemed automatically. From the Terms and Conditions:
Customers earn 2 points for each $1 in net retail purchases. Once you reach 5,000 points, they can be redeemed automatically or on demand for cash at a 1% exchange rate into an eligible Fidelity account (i.e. 5,000 points = $50 deposit).