Fidelity Investments is now offering a new American Express card that gives you 2% back on all purchases when credited directly into a Fidelity IRA*. This is nice if you have a Fidelity IRA, although it is not one of my favorite places to start an IRA since their index funds have a $10,000 minimum and their stock trades aren’t that cheap. Also, it could be confusing due to IRA contribution limits. If you’ve maxed out the limit, they say that they will automatically deferred 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 $2,150? How would they know that?
What’s more interesting: In early 2009, according to this press release, there will be new Fidelity American Express cards that also offer 2% cash back into Fidelity brokerage and 529 plan accounts. Note that if you have the Fidelity Investment Rewards card that offers 1.5% back right now, that is a Visa card and you will probably have to apply for a new American Express card to get the 2% back. The 529 card should just be bumped up to 2% since it is already American Express.
*Update: It appears that you can deposit the 2% for this card into a variety of Fidelity accounts include their plain brokerage account, not just IRAs. From the Terms and Conditions:
You can redeem points for deposits into an eligible Fidelity account. You are solely responsible for the accuracy of the data you provide in connection with designating a Fidelity account, for ensuring that the account can accept deposits on your behalf and that the deposits comply with applicable laws and regulations. Eligible Fidelity Accounts include all Fidelity non-retirement, Individual Retirement Accounts, and Fidelity-managed 529 Plan accounts that accept ACH deposits.
From the Rewards tab on the application page:
Earn 2 points for every dollar in net retail purchases and choose to automatically sweep them as a cash deposit into your Fidelity IRA or other Fidelity account(s). Or, redeem your points for WorldPoints® rewards.
By Jonathan Ping | Credit Cards | 12/10/08, 11:08am