Fidelity Retirement Rewards Card: 2% Cash Back Into IRA + More

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.

Comments

  1. If it is not clear, you can already sign up for this card at:

    http://www.fidelity.com/retirementrewards

  2. Schwab has the same deal but better interms of mininum investment.

    But why use 2% reward when you can get 5%?

  3. And what has 5%?

  4. Does anyone know if this is a teaser rate? Or something that will be long term?

  5. Although Fidelity is not the cheapest on trades, their service is by far the best I have experienced anywhere. Everytime I have called with a question they answer on the second ring and the person knows the answer. They are fast and efficient. At one of the low cost brokerage companies I was on hold for 30 minutes only to have someone whom I had to educate about a self directed roll over IRA.

    If you trade enough, you can get trades down to $9 a trade.

  6. fortune8,

    What gives you 5% cash back? I don’t think there is such card.

    Thanks,

  7. There are only 5% cashback cards on certain areas like gas rewards cards. There couldn’t possibly be a 5% cashback card on everything as that is more than the actual fees that the credit card issuers collect per transaction; they’d be losing money. Besides, who says you can only use one card?

  8. Have you looked at the Orchard Bank Premium Gas Cards? Earn 3% cash back when you use your card at gas stations and Earn 2% cash back on credit card purchases you make everywhere else

  9. This would work great at Costco! Since I spend 5k a year there, this will benefit me $50/year over my current 2% card.

  10. fortune8:
    I can not understand either of your statements.
    1. Where did you see Fidelity requires a minimum investment? I only see Schwab requires a $1000 balance or an automatic transfer each month.
    2. Where is the 5% card?

  11. If I remember correctly, the Fidelity brokerage account requires $1,500 to open initially, but there is no ongoing minimum balance requirement or inactivity fee. You can open with $1,500 and just take it out.

  12. I have been using the Orchard Premium Card for about 2 years and it has worked great, 2% back on all purchaces, no anual fee, just pure rewards. Although I understand its hard to get the anual fee waved and they give you like a 2k credit line to start with, but I was able to raise it to 7k no problem.

  13. I’m pretty sure Fidelity requires an initial $2,500 to open a standard brokerage account. I just checked on a Traditional IRA and that also has a $2,500 minimum to open as well. While they say there is no annual maintenance fee, I can find no language saying that there isn’t a minimum balance requirement. I suspect this is because they generally expect new investors to be using mutual funds and there aren’t many at Fidelity that have a minimum requirement lower than $2,500.

  14. there’s a 5% card on gas/grocery/drugs from Associated Bank (issued by Citi)

    you have to call 877-577-9485

    if you’re concerned about possible fraud from calling a nondescript call center, just put a fraud alert on your credit reports. The Associated Bank website doesn’t list this card.

  15. Stacey Vanek Smith says:

    Hey everyone,

    I’m a reporter with Marketplace–a business show on NPR. I’m putting together a story for next week on savings/cash back credit cards. I was really interested in this discussion and I was wondering if someone who has one of these cards might be willing to talk with me about what their experience has been. My email is: svaneksmith@marketplace.org.

    Thank you!
    Stacey

  16. Does this card charge foreign transcation fees?

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