Transfer to Fidelity for Sign on Bonus?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
smurflady
Posts: 23
Joined: Tue Jan 22, 2013 11:45 am

Transfer to Fidelity for Sign on Bonus?

Postby smurflady » Wed Apr 19, 2017 5:49 pm

Fidelity has a sign on bonus of up to $2500 for transferring IRA or brokerage assets. I'm currently at Vanguard (except for 401Ks at Fidelity) and was curious if there is a downside to opening up a brokerage account for the bonus. I would transfer some Vanguard ETFs in kind and hold them at Fidelity for a year. I would keep the Vanguard brokerage account open for any new investments and at the end of the year could move the assets back to Vanguard.

Am I missing something? Seems like free money to park my assets for a year.

Portfolio7
Posts: 125
Joined: Tue Aug 02, 2016 3:53 am

Re: Transfer to Fidelity for Sign on Bonus?

Postby Portfolio7 » Wed Apr 19, 2017 6:11 pm

If it's the same promo I'm familiar with, then, the 'up to $2500' is doled out as a percentage of new contributions. They don't just hand it to you. Unless it's something different than I've seen (I just transferred a few old accounts to Fidelity last year, and this promo has been around for a while, if it's the same one.) Certainly it's a nice little bonus, but there's fine print.

Church Lady
Posts: 223
Joined: Sat Jun 28, 2014 7:49 pm

Re: Transfer to Fidelity for Sign on Bonus?

Postby Church Lady » Wed Apr 19, 2017 6:45 pm

Just be careful to read the fine print. Here is a sample offer (this may or may not be to your offer):

This offer is valid for new or existing Fidelity customers. In order to receive the cash bonus, you must designate an existing eligible Fidelity brokerage IRA or brokerage account or open and fund a new eligible Fidelity brokerage IRA or brokerage account. Deposits of $50,000 to $99,999 may receive $200, deposits of $100,000 to $249,999 may receive $300, deposits of $250,000 to $499,999 may receive $600, deposits of $500,000 to $999,999 may receive $1,200, and deposits of $1,000,000 or more will receive $2,500. Offer is nontransferable, limited to one per individual per rolling 12 months, and may not be combined with other offers. Fidelity reserves the right to modify these terms and conditions or terminate this offer at any time. Other terms and conditions, or eligibility criteria, may apply.

Customers must register at rewards.fidelity.com/offers/depositbonus. New accounts or designated eligible accounts must be funded within 60 days ("the qualification period"). Funding must come from an external, non-Fidelity source via any standard monetary transfer method (a standard Transfer of Assets form, check, electronic funds transfer, ADM deposit, etc.). Rollovers from a former employer's Fidelity-record kept workplace savings plan are not eligible for this offer. Cash, eligible securities, and/or margin debit balance transfers from external sources will be valued at the time Fidelity receives them.

Cash bonus will be calculated on net deposits into any qualifying accounts over the qualification period from the time of registration for the offer. The bonus will be paid directly to the qualifying account(s). For purposes of this offer, net deposits shall mean total external deposits or transfers (including cash, eligible securities and/or margin debit balance transfers) minus assets withdrawn or transferred out of the accounts within the qualification period.

Account holders must maintain the minimum qualifying account balance (minus any losses related to trading or market volatility, or margin debit balances) at Fidelity for at least nine months from the date on which the bonus award is credited to the account, or Fidelity may charge the account the cost of the bonus award. In addition, account holders must not use qualifying deposits to purchase insurance or annuity products offered or distributed by Fidelity within 60 days of receiving a bonus award, or Fidelity may charge the account the cost of the bonus award. Please allow 2-4 weeks after the qualification period for the bonus award to be credited to your account.

<and so on ...>

In this example, you have to REGISTER then FUND the account. If you FUND then REGISTER, the monies transferred don't count towards the bonus. You have to deposit $1M to qualify for the full $2500. Fidelity can modify the terms at any time (although, if you follow all the rules, I'd be surprised if they dared renege). The use of the word 'may' is unsettling to me because I take that to mean 'maybe you'll get the $; maybe not!'.

So, read that fine print carefully, and follow the rules. Call Customer Service if you're not sure about anything.

You say brokerage, so I presume you mean taxable account brokerage. If VG is tracking your basis, I'd investigate carefully whether you lose that information when the ETFs transfer back and forth. How would you track your basis if that information does not transfer to and from Vanguard?

Good luck!
He that loveth silver shall not be satisfied with silver; nor he that loveth abundance with increase: this is also vanity. Ecclesiastes 1:8

stlutz
Posts: 3675
Joined: Fri Jan 02, 2009 1:08 am

Re: Transfer to Fidelity for Sign on Bonus?

Postby stlutz » Wed Apr 19, 2017 10:31 pm

You might be interested in this rather long thread on the subject:

viewtopic.php?t=196884

For some folks it's very much worth it. Others don't see the point. If you have enough to get a $2500 bonus, well then your portfolio value changes by more than that on a very large number of days.

User avatar
TimeRunner
Posts: 996
Joined: Sat Dec 29, 2012 9:23 pm
Location: Coastal Central Cali4nia

Re: Transfer to Fidelity for Sign on Bonus?

Postby TimeRunner » Wed Apr 19, 2017 10:36 pm

I got $600 for my Roth IRA transfer. It's covered the cost of a few trades ($4.95 each) and the rest was just added to the balance. It was a bonus, not a prime motivator. Fido's been easy to work with as far as paperwork, transfers, notary on site, etc. Overall I'm pleased.
One cannot enlighten the unconscious. | Endurance athletes are the Bogleheads of sports.

JCE66
Posts: 215
Joined: Wed Jul 15, 2015 6:08 pm

Re: Transfer to Fidelity for Sign on Bonus?

Postby JCE66 » Thu Apr 20, 2017 6:50 am

smurflady....Free money is just that: free money. Fidelity pays what they call a 'commission credit'. I transferred from Wells Fargo to Fido in November 2015, and have received a modest amount in commission credits. I have never regretted that move. Wells Fargo was terrible.

Fidelity has a good website, very responsive customer service, and a pretty decent selection of low cost index funds. My 401K from BigCorp and my Roth are at Fidelity. Just make sure you dot all of the i's and cross the t's. Fidelity will help you do that.

sc9182
Posts: 46
Joined: Wed Aug 17, 2016 7:43 pm

Re: Transfer to Fidelity for Sign on Bonus?

Postby sc9182 » Thu Apr 20, 2017 6:52 am

If you talk to Fidelity advisor - they may be able to UP the offer upto $3250 - if you negotiate well and inform them of possible competitive offers from other firms.

You can definitely self-manahe/self-direct your portfolio. No need for AUM - unless you need that service!

In my friends case - they allowed/considered: previous employer managed 401k (held in Fidelity plan) amounts - converted/moved-over in to Fidelity managed Rollover IRA. Then he added extra/net-new a few hundreds $K brokerage portfolio/cash transferred over from other brokerage/bank - to reach $1 million requirement.

Unfortunately (but expectedly) Fidelity did not count his current employer's 401k portfolio (which also held at Fidelity) towards the $1 million net-new transfer-in requirement.

The $3250 bonus broken up and deposited proportionally into respective new accounts based on respective balances. Took 20 days after the last tranfer finished (and one reminder phone-call from us to the Fidelityo adcisor)

dbr
Posts: 21533
Joined: Sun Mar 04, 2007 9:50 am

Re: Transfer to Fidelity for Sign on Bonus?

Postby dbr » Thu Apr 20, 2017 8:51 am

The bonus is $2500 on $1M or 0.25%.

Their apparently soon to cease airline miles bonus on non-retirement accounts has been 50,000 miles on $100K. Valuing a mile a $.02 one could gain a 1% benefit and do it repeatedly. I would say some investors have gained a 3% or 4% bonus from Fidelity over the years compared to 0.25% on an IRA rollover or transfer.

TBillT
Posts: 114
Joined: Sat Sep 17, 2011 1:43 pm

Re: Transfer to Fidelity for Sign on Bonus?

Postby TBillT » Thu Apr 20, 2017 10:10 am

dbr wrote:
Their apparently soon to cease airline miles bonus on non-retirement accounts has been 50,000 miles on $100K. Valuing a mile a $.02 one could gain a 1% benefit and do it repeatedly. I would say some investors have gained a 3% or 4% bonus from Fidelity over the years compared to 0.25% on an IRA rollover or transfer.


hmm...I was not aware of this one...wonder if I should have got that
I got the other one on a Rollover.

User avatar
Earl Lemongrab
Posts: 1698
Joined: Tue Jun 10, 2014 1:14 am

Re: Transfer to Fidelity for Sign on Bonus?

Postby Earl Lemongrab » Thu Apr 20, 2017 12:32 pm

Generally the brokerages have been reliable in paying out bonuses as long as you follow the rules. It's best to make sure the account is registered for the bonus, often there's a link to open the account with the offer code embedded. However, there's a good chance that they would apply it retroactively, otherwise you'd be likely to pack up and go to another custodian.

If you don't care much which custodian, especially ETF users, you can do better at TD Ameritrade or Merrill Edge.
This week's fortune cookie: "You will enjoy doing something spontaneous this weekend." Apparently that meant working on a dead PC, but I didn't enjoy that much.

User avatar
Earl Lemongrab
Posts: 1698
Joined: Tue Jun 10, 2014 1:14 am

Re: Transfer to Fidelity for Sign on Bonus?

Postby Earl Lemongrab » Thu Apr 20, 2017 12:36 pm

stlutz wrote:You might be interested in this rather long thread on the subject:

https://www.bogleheads.org/forum/viewtopic.php?t=196884

And a fine one it is.

stlutz wrote:For some folks it's very much worth it. Others don't see the point. If you have enough to get a $2500 bonus, well then your portfolio value changes by more than that on a very large number of days.

As mentioned in the mini-FAQ, that's largely irrelevant. Don't evaluate how much cash your assets generate, as they are still doing that anyway. Look at it from the point of how much you get for work involved. If I offer you $600 for 30 minutes work on the computer, do you take it? That's what bonuses are.
Last edited by Earl Lemongrab on Fri Apr 21, 2017 12:20 pm, edited 1 time in total.
This week's fortune cookie: "You will enjoy doing something spontaneous this weekend." Apparently that meant working on a dead PC, but I didn't enjoy that much.

iamright
Posts: 4
Joined: Fri Feb 19, 2016 5:57 pm

Re: Transfer to Fidelity for Sign on Bonus?

Postby iamright » Thu Apr 20, 2017 12:42 pm

dbr wrote:The bonus is $2500 on $1M or 0.25%.


Where did you see the 0.25%? I am planning on transferring $8M into IRA and taxable accounts. I was offered two $2,500 bonuses since I can use my and my wife's SSN on the different accounts.

desertgoose
Posts: 32
Joined: Sat Jan 14, 2012 3:32 pm

Re: Transfer to Fidelity for Sign on Bonus?

Postby desertgoose » Thu Apr 20, 2017 12:49 pm

I registered through the deposit bonus website and made a deposit into my existing Fidelity account, but never received the bonus payment. When I contacted Fidelity about this, they said that my deposit didn't "qualify" (but didn't provide any rationale for that) and said they sent me emails to that effect (which I never received, despite receiving numerous other emails from Fidelity during that time period).

If you're opening a new account, you're probably fine, but I would be careful if you think transferring new money into an existing account will result in a bonus. It seems like the fine print gives them wiggle room to get out of it. (Fidelity probably realized that I'm not a very profitable customer since I rarely trade and only invest in the low-cost, no-commission iShares ETFs, so it wasn't worth giving me a bonus. I would imagine most people on this board would be in that same boat, though.)

TBillT
Posts: 114
Joined: Sat Sep 17, 2011 1:43 pm

Re: Transfer to Fidelity for Sign on Bonus?

Postby TBillT » Thu Apr 20, 2017 1:07 pm

Earl Lemongrab wrote: However, there's a good chance that they would apply it retroactively, otherwise you'd be likely to pack up and go to another custodian.
.


Fido said the frequent flyer incentive might be over, but it could not be retroactive. However, they gave me a future draft pick (some free trades).

User avatar
Earl Lemongrab
Posts: 1698
Joined: Tue Jun 10, 2014 1:14 am

Re: Transfer to Fidelity for Sign on Bonus?

Postby Earl Lemongrab » Thu Apr 20, 2017 1:15 pm

TBillT wrote:Fido said the frequent flyer incentive might be over, but it could not be retroactive. However, they gave me a future draft pick (some free trades).

Ah, I was insufficiently clear. I was referring to people who made transfers without having registered for the bonus. If the offer has expired, then you're less likely to have success.
This week's fortune cookie: "You will enjoy doing something spontaneous this weekend." Apparently that meant working on a dead PC, but I didn't enjoy that much.

User avatar
Earl Lemongrab
Posts: 1698
Joined: Tue Jun 10, 2014 1:14 am

Re: Transfer to Fidelity for Sign on Bonus?

Postby Earl Lemongrab » Thu Apr 20, 2017 1:22 pm

desertgoose wrote:I registered through the deposit bonus website and made a deposit into my existing Fidelity account, but never received the bonus payment. When I contacted Fidelity about this, they said that my deposit didn't "qualify" (but didn't provide any rationale for that) and said they sent me emails to that effect (which I never received, despite receiving numerous other emails from Fidelity during that time period).

One thing to be aware of is that many custodians will not give a bonus for rolling a 401(k) that they administer into an IRA. In your case, I would have immediately told them that I was moving the assets to TD Ameritrade for a bonus as they didn't honor their offer.
This week's fortune cookie: "You will enjoy doing something spontaneous this weekend." Apparently that meant working on a dead PC, but I didn't enjoy that much.

User avatar
Pranav
Posts: 105
Joined: Thu Aug 25, 2016 11:25 am
Location: Austin, Texas, United States

Re: Transfer to Fidelity for Sign on Bonus?

Postby Pranav » Thu Apr 20, 2017 1:51 pm

If/when you decide to close/transfer your IRA account out of Fidelity, they will probably charge $50 account close-out fee.
Pranav

User avatar
Earl Lemongrab
Posts: 1698
Joined: Tue Jun 10, 2014 1:14 am

Re: Transfer to Fidelity for Sign on Bonus?

Postby Earl Lemongrab » Thu Apr 20, 2017 1:52 pm

Pranav wrote:If/when you decide to close/transfer your IRA account out of Fidelity, they will probably charge $50 account close-out fee.

Yes, but often the new custodian will cover that (not Vanguard). You can also leave a small amount of cash.
This week's fortune cookie: "You will enjoy doing something spontaneous this weekend." Apparently that meant working on a dead PC, but I didn't enjoy that much.

dbr
Posts: 21533
Joined: Sun Mar 04, 2007 9:50 am

Re: Transfer to Fidelity for Sign on Bonus?

Postby dbr » Thu Apr 20, 2017 2:59 pm

iamright wrote:
dbr wrote:The bonus is $2500 on $1M or 0.25%.


Where did you see the 0.25%? I am planning on transferring $8M into IRA and taxable accounts. I was offered two $2,500 bonuses since I can use my and my wife's SSN on the different accounts.


So you get 5000/8000000 = 0.0625% I didn't see 0.25%. I calculated what $2500 is on $1M.

jimcrawford01
Posts: 56
Joined: Mon May 19, 2008 5:23 pm

Re: Transfer to Fidelity for Sign on Bonus?

Postby jimcrawford01 » Fri Apr 21, 2017 10:50 am

I was considering this bonus offer.

I went to a Fido Store and spoke with an advisor there to ask my questions.

One that I asked that has not been addressed in this thread:

Is the bonus delivered as interest or some other thing which will generate a 1099 and will be taxable for Tax Year 2017?

The answer was NO. It will simply be added to the IRA account and no 1099 generated.

Does that comport with what others here have experienced?

Thanks Jim

veggivet
Posts: 181
Joined: Sun Jan 25, 2015 1:07 pm
Location: New England

Re: Transfer to Fidelity for Sign on Bonus?

Postby veggivet » Fri Apr 21, 2017 10:57 am

That was not my experience when I transferred several accounts from TDAmeritrade to Fidelity. My bonus was spread among the accounts in proportion to their respective balances, and coded as 'goodwill'. The amount that went into my taxable account generated a 1099.

SeekingAPlan
Posts: 49
Joined: Sat Dec 12, 2015 1:03 pm

Re: Transfer to Fidelity for Sign on Bonus?

Postby SeekingAPlan » Fri Apr 21, 2017 11:12 am

I believe the Fidelity fine print states that bonus amounts $600 or greater will generate a 1099.

User avatar
Earl Lemongrab
Posts: 1698
Joined: Tue Jun 10, 2014 1:14 am

Re: Transfer to Fidelity for Sign on Bonus?

Postby Earl Lemongrab » Fri Apr 21, 2017 12:18 pm

Bonuses for taxable accounts will generate a 1099 at $600+ (that's by law) and sometimes less if the custodian chooses. Note that you are responsible for taxes regardless of whether you receive a 1099.

For IRAs, most will put the bonus in the account and designate it as "earnings" or similar. Those won't have a 1099. A few pay the bonus outside of the IRA or count the bonus as a contribution. There is some discussion of this in the "Final" thread.
This week's fortune cookie: "You will enjoy doing something spontaneous this weekend." Apparently that meant working on a dead PC, but I didn't enjoy that much.


Return to “Investing - Theory, News & General”

Who is online

Users browsing this forum: Stormbringer and 29 guests