Fidelity Vs TIAA CREF: Which is a better optional investment plan for future?

Fidelity Vs TIAA CREF

Meet TIAA and Fidelity, two big players in the money world. TIAA, or Teachers Insurance and Annuity Association of America – College Retirement Equities Fund, started in 1918 thanks to the Carnegie Foundation. It’s become a major money helper for people in academics, research, medicine, culture, and government. On the other side, we have Fidelity, a company that helps all sorts of folks with their money – regular people, big organizations, and money intermediaries.

Now, these two have been around the block for a while, and people trust them with their money matters. But they’re not twins – they’ve got differences that make them unique. Let’s check out some important stuff that might help you pick between them.

Fidelity and TIAA (used to be TIAA-CREF) offer different ways for people to invest their money. Fidelity is good for those who want good deals, while TIAA is more for government and education workers. But anyone can open an account with either of them. 

This article will figure out which one is better — TIAA or Fidelity Investments.

Which Is Better For Buying Funds?

Fidelity and TIAA CREF let people buy mutual funds and ETFs. Fidelity offers over 11,000 funds, with about 3,757 having no fees. They have 320 special funds, and if you buy them on their website, there’s no fee. But selling them in less than two months costs $49.95.

TIAA CREF has over 7,200 funds, but it’s tricky to know which ones are fee-free. They have 290 special funds, some with no extra fees. Unlike Fidelity, TIAA CREF doesn’t have its ETFs. Be cautious with TIAA CREF, as buying certain funds not on their free list may incur a $50 fee, but special customers get $15 back. Selling specific TIAA CREF funds before six months has a $50 price. Overall, Fidelity is better for buying funds.

Which Has Better Account Options?

TIAA CREF and Fidelity have two types of accounts: ones where you decide everything and ones where someone helps you. TIAA charges 1.15% for help, needing at least $50,000. They also have a cheaper computer helper at 0.30%, requiring at least $5,000.

Fidelity also has people and a computer helper. The computer helper costs 35 basis points, needing at least $5,000 like TIAA. Fidelity offers various packages with people helping, ranging from $50,000 to $2,000,000, with prices from 20 to 170 basis points.

Fidelity provides more options with people helping, and some are cheaper, making it better in this part.

Which Broker Is Better for Stock Trading: TIAA or Fidelity?

TIAA charges $0 for trading stocks and options, while Fidelity charges $0 for supplies but 65 cents for options.

Both TIAA and Fidelity have phone systems to make trades. TIAA charges $35 for stocks and an extra $2 for options, while Fidelity charges $12.95 for supplies and 10 cents additional for options.

No annual fees or minimum balances are needed for accounts at either broker. Closing an IRA at TIAA costs $130, but at Fidelity, it’s a lower $50.

For orders with a live person, TIAA charges $55 plus an extra $2 for options. Fidelity clients pay $32.95 (plus 65 cents for options).

In this part, too, Fidelity comes out as the winner.

Fidelity is offering $0 trades, and if you trade options, it’s 65 cents per contract.

TIAA says to open an investment account with them. Charles Schwab is giving $0 commissions and has a satisfaction guarantee. These are the deals they have going on right now.

Who Offers Better Customer Service?

Fidelity is always ready to talk on the phone, day or night. They have a special number for people outside the country, too. Their website has a chat where you can type and ask questions. They even have a robot that can help with common questions. Plus, they have lots of offices all over the country, almost 200!

TIAA also has many offices, but some might not offer all the services. Unlike Fidelity, TIAA doesn’t give investment tips to people who make their own choices.

You can call TIAA from 8 in the morning to 10 at night, Monday to Friday. On Saturday, they’re open from 9 to 6, but closed on Sunday. They have a robot voice you can talk to any time, offer help in Spanish, and have a special number for everyone.

Overall, Fidelity is better because they’re always available, day or night.

Which Brokerage Website Is Better: TIAA CREF or Fidelity?

TIAA CREF’s website isn’t the greatest. The charts are basic, and if you want to trade, you can’t do it directly from the bar at the bottom. Also, there’s no special program you can install on your computer.

Fidelity’s website is friendlier and easier to use. When you want to trade, there’s a ticket on the side that shows up. Fidelity also has a computer program you can use without any special requirements. They even have an app for Apple TV that doesn’t cost anything.

In this part, Fidelity is the better choice.

Background Of Fidelity

Fidelity Investments, or just Fidelity, is a big financial company in the United States. It started back in 1946 and is now one of the largest money managers globally. It takes care of about $4.3 trillion in assets. They do a bunch of money-related things like managing funds, helping with retirement plans, and offering insurance.

They used to be called the “Fidelity Fund” but changed to Fidelity Investments in 1930. They made a part called Fidelity International in 1969 for non-U.S. markets and later made it a separate company in 1980.

Over the years, they added new services like 401(k) products in 1982 and computerized stock trading in 1984. They also started offering ETFs in 2003 and got into cryptocurrency in recent years.

In 2014, Abigail Johnson became the big boss, and in 2018, they got serious about crypto with a separate part just for that. They even started offering Bitcoin in retirement plans in 2022, making them the first big retirement plan provider to do so.

They’re still growing, hiring lots of new people, and in 2023, they applied to launch cryptocurrency ETFs, which would be among the first of their kind in the U.S.

Fidelity’s Summary

Fidelity is a well-established investment platform in the US, catering to both novice and experienced traders. With the option to trade stocks and ETFs without fees, Fidelity stands out as a cost-effective choice. Importantly, the platform does not impose inactivity or withdrawal fees. Beginners will appreciate the absence of a mandatory minimum deposit requirement.

Fidelity supports various currencies, offering flexibility to users. The account opening process typically takes 1-3 days, and for those wanting to hone their skills, a demo account is available for practice. The platform provides a diverse range of investment products, including stocks, ETFs, funds, bonds, options, and cryptocurrencies.

Crucially, Fidelity operates under regulatory oversight in the USA, ensuring a secure and compliant environment for investors. The platform is designed with a user-friendly interface, enhancing the overall experience for individuals engaging in the investment process.

Background Of TIAA CREF

TIAA is like a money helper for people who work in jobs that help others, like teachers, doctors, and researchers. It started a long time ago, back in 1918, thanks to a guy named Andrew Carnegie, who wanted to make sure professors had enough money when they retired.

At first, it was called TIAA-CREF, which is a bit of a mouthful, but in 2016, they decided to keep it simple and call it TIAA. After a law change in 1997, TIAA became a money-making company but kept a part of its nonprofit.

TIAA gives money to people who have accounts with them, especially those who use the TIAA Traditional account. The main office is in New York, and they have lots of offices all over the U.S.

As of 2023, TIAA has over five million active and retired accounts with more than $1.3 trillion under its care. They’re good at managing money and got awards for it, too.

TIAA didn’t stop at just helping teachers with retirement. They bought other companies, like Nuveen and EverBank, to offer more stuff.

A lady named Thasunda Brown Duckett became the big boss at TIAA in 2021. She’s one of the few Black women leading big companies. TIAA helps with retirement in different ways. They have plans like TIAA-CREF Traditional, which is like a savings plan for when you’re done working. They also have personal annuities, which is like having a special savings account with them. And there are IRAs for even more retirement savings.

They even have something called target-date funds, which are like special investment plans that change as you get closer to retiring. So, TIAA is like a helpful friend for your money, making sure you have enough when you’re done working.

TIAA-CREF needs at least $2000 if you want a margin account. But for a regular cash account, you don’t need any money to start. Fidelity lets you create with $0.

TIAA-CREF charges $0 for buying stocks, ETFs, and options. But if you use their phone system, it’s $35 for some trades. If a person helps you, it’s $55. Also, buying certain mutual funds costs $50. Fidelity doesn’t charge anything for buying stocks, ETFs, and options. Bonds cost $1 each. Mutual funds can be free or up to $49.95.

TIAA-CREF has things like stocks, ETFs, and bonds for you to invest in. They also offer options and annuities. Fidelity offers similar stuff like stocks and mutual funds. They even have something called fractional shares!

TIAA-CREF has something called TIAA Personal Portfolio, a computer helper for your money, but you need at least $5000 to join, and they take a small fee of 0.3% each year. It watches your money every day and fixes things if needed. You can talk to money helpers too, and it won’t cost more. Fidelity also has a computer helper called Fidelity Go. It charges more, 0.35% every year. They watch your money and try to make it grow.

Can You Switch Your Money From TIAA To Fidelity? How Does It Work?

Sure, if you want to move your money from TIAA to Fidelity, you can do that by something called a “rollover.” It’s like moving your toys from one box to another without any tax troubles. 

But be careful; check for any extra charges or rules when you do this. To start the rollover, get in touch with both TIAA and Fidelity. They’ll guide you through each step.

What’s The Best Choice: TIAA or Fidelity, Based On Your Job And Money Style?

Picking between TIAA and Fidelity depends on what job you have. If you’re a teacher, or doctor, or work in certain fields, TIAA might be better for you. It has special plans just for people like you.

But if you like doing things with your money and using the computer a lot, Fidelity could be better. It’s good for people who trade stocks often and use apps to manage their money.

How Do You Choose Between TIAA And Fidelity For Your Money?

Deciding on a financial institution for your savings is a significant choice. Both TIAA and Fidelity are reputable options overseen by regulatory bodies like the SEC and FINRA.

Your choice might hinge on specific needs. TIAA is especially beneficial for professionals such as teachers, doctors, and government employees, offering specialized retirement planning assistance. Meanwhile, Fidelity stands out with its user-friendly online platform, catering to a broad spectrum of clients, from individuals to large corporations.

Consider your priorities. Are you seeking a financial partner aligned with your profession, or do you prioritize a straightforward online experience? Ultimately, it’s essential to select the institution that aligns best with your financial objectives and preferences.

What Does TIAA-CREF And Fidelity Offer In Mutual Funds?

Fidelity offers a wide range of investment options, with over 200 different mutual funds. These funds cover various sectors, geographical regions, and investment strategies. Fidelity manages these funds in two main ways: through index funds, which follow a predetermined market index, and actively managed funds, where professionals make investment decisions.

For those seeking a specific type of investment, Fidelity likely has a suitable option. However, some retirement plans may offer a limited selection of Fidelity’s funds, akin to a special menu rather than the full range.

TIAA provides around 50 to 60 funds and annuities, managed through both active decision-making and passive strategies. What sets TIAA apart is its unique offerings, such as the “Traditional Annuity,” functioning like a specialized bank account that may yield long-term benefits. Additionally, TIAA offers a “Real Estate Account” where investors can own portions of different properties.

The “Traditional Annuity” at TIAA comes with some nuances, as certain options allow for withdrawals at any time, while others have specific rules regarding timing and amounts. Although these details may be confusing, TIAA offers assistance via phone to help clarify any uncertainties.

How Much Do Mutual Funds Cost at Fidelity and TIAA CREF?

Mutual funds come with associated costs, and comparing these costs is crucial when choosing between Fidelity and TIAA CREF.

Fidelity typically offers mutual funds at competitive prices, often lower than many other options. However, due to the extensive range of choices available, costs can vary. It’s essential to pay attention to the specific costs associated with each fund to ensure they align with your preferences.

TIAA, on the other hand, also provides mutual funds at reasonable prices, usually around the 15th percentile when compared to other options. Fidelity tends to have some of the most affordable funds, especially when considering their Index funds. Meanwhile, TIAA stands out for its particularly low costs, especially in the case of Target Date funds.

In comparison to other providers, Fidelity generally offers lower costs, and TIAA’s prices are even more competitive, especially for specific types of funds. Carefully assessing these costs in relation to the fund’s performance and investment goals is crucial in making an informed decision.

How Does Fidelity Handle Taxes on Your Money?

Fidelity looks at IRS rules to figure out the least amount of tax money to take from your money when you get it. This means it might be hard to know how much you’ll actually have left after taxes. But Fidelity lets you change this amount. You can decide to have more taken out if you want.

If Fidelity thinks your money will last for less than ten years, you can set the smallest amount they’ll take out for taxes at 20%.

TIAA does what the IRS suggests by taking 20% of taxes from your money. But, if you want, they let you choose to have even more taken out. This helps you know exactly how much money you’ll have after taxes. However, because they set a high starting point, you might end up paying more taxes than needed.

TIAA also gives you the option to turn your retirement money into a steady income for life, called “Annuitization.” This works if your money is in their special annuities. Keep in mind that once you start this process, it’s usually permanent, so plan carefully.

Choosing The Right Platform: Factors To Consider

Let’s compare TIAA CREF and Fidelity to consider which one might be better for your money plans:

Who They Help

TIAA CREF likes to help folks in schools and such, while Fidelity helps all kinds of people. Think about if you’re more like a school person or someone else.

Choices for Your Money

Look at the different ways you can put your money in. Do you want lots of choices or just a few? Figure out what suits you best.

Easy or Tricky to Use

Check out how easy it is to use their websites and tools. If things are easy to understand and use, it can make your money stuff less confusing.

What They Know About

See what these companies know a lot about. TIAA CREF is big on teachers and researchers, while Fidelity knows about a bunch of things. Think about what fits your needs better.

Money Fees

Look at the money stuff they charge you for – like keeping your account or other fees. See which one is more friendly to your wallet.

How Well They Did Before

Take a peek at how well their money choices did in the past. But remember, just because they did good before doesn’t mean they’ll do the same in the future. It’s a bit like looking at a team’s scores from last year.

Think about these things, and you’ll be on your way to picking the right money helper for you!

Which Investment Option Suits You: Fidelity or TIAA?

Fidelity funds are good if you like putting together and taking care of your money plan just how you want. They have funds that don’t cost a lot, and you can pick from many options. This means you can take risks or play it safe – it’s up to you. Fidelity is a good choice if you really know a lot about investing and want to control everything. But, if you don’t know much, you could make mistakes.

On the other hand, TIAA funds are great if you want something simpler. They don’t confuse you with too many choices, and they cost very little. TIAA is good for people who like the idea of following a plan that copies the overall market (they call it “indexing”). It’s hard to make a wrong move with TIAA because they keep things easy. They also have some special money options like the TIAA Traditional and the Real Estate Account. Plus, they let you turn your retirement money into payments for life if you want.

Conclusion

When you’re choosing between TIAA CREF and Fidelity, think about what you really want. TIAA CREF is great if you’re into schools and want to invest in a way that helps out. They aim to pick things that are good for the planet. Now, Fidelity is a bit more for everyone. They have lots of ways you can use your money, and their website is easy to figure out. Ask yourself who you are, what kind of money choices you like, if their website works for you, and if they know stuff that matters to you. Also, check out the fees they charge and how they did in the past. But remember, just because they did well before doesn’t mean they’ll do the same now. Investing can be tricky, so gather as much info as you can and have a chat with someone who knows money stuff before you make up your mind. Once you figure out what you want and what these companies can do, you can pick the one that suits you best, whether you’re a teacher, a scientist, or just someone trying to save more.

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