Introduction

You have probably heard it before: index investing is one of the smartest, most reliable ways to build long-term wealth. But when you start looking at your options inside Fidelity, things can get confusing fast. Which fund do you actually pick? Is the zero-fee fund really that good? What about the expense ratio differences?

The Fidelity 500 index fund lineup is genuinely impressive. Fidelity offers more than one option that tracks the S&P 500, and each one has its own strengths depending on where you are in your investing journey. The best Fidelity 500 index fund for you depends on your account type, your goals, and whether you prioritize zero fees or maximum liquidity.

In this guide, you will learn exactly which funds are available, how they compare on fees and performance, who each one is best suited for, and how to get started. No jargon. No filler. Just the clear information you need to make a confident decision.

What Is an S&P 500 Index Fund?

An S&P 500 index fund tracks the performance of the S&P 500 index. That index holds the 500 largest publicly traded companies in the United States. Think Apple, Microsoft, Amazon, and hundreds more.

When you invest in an S&P 500 fund, you are not betting on a single company. You are buying a small piece of all 500 companies at once. That is built-in diversification.

Historically, the S&P 500 has returned an average of around 10% per year over long periods. Of course, past performance does not guarantee future results. But the track record is strong, and these funds are the foundation of millions of retirement portfolios across America.

Why Choose Fidelity for Index Investing?

Fidelity is one of the largest and most trusted brokerage firms in the world. It manages trillions of dollars in assets. That scale matters because it keeps costs low for investors like you.

Here is what makes Fidelity stand out for index investors:

• No account minimums on most funds
• Proprietary zero expense ratio funds that no other broker can offer
• Fractional shares available on many investments
• Excellent tools for tracking and managing your portfolio
• Strong customer service and educational resources

These factors make Fidelity a go-to platform for both beginners and experienced investors looking to keep things simple and cost-effective.

The Best Fidelity 500 Index Fund Options You Should Know

Fidelity gives you three primary choices when you want to invest in the S&P 500. Each one serves a slightly different investor need.

1. FXAIX: Fidelity 500 Index Fund (The Top Pick for Most Investors)

FXAIX is arguably the most popular Fidelity 500 index fund on the market. It has a razor-thin expense ratio of just 0.015%. That means for every $10,000 you invest, you pay just $1.50 per year in fees.

It directly tracks the S&P 500 index. It has no minimum investment requirement. Its long track record closely mirrors the S&P 500 performance year after year.

FXAIX is a mutual fund, which means you buy it at the end-of-day NAV price rather than trading it like a stock throughout the day. For long-term investors, this does not matter at all. You buy, hold, and grow.

Who is FXAIX best for? It is the ideal Fidelity 500 index fund for anyone with a Fidelity brokerage or retirement account who wants low costs and a proven track record.

2. FZROX: Fidelity ZERO Total Market Index Fund (Best for Zero Fees)

FZROX has a 0.00% expense ratio. That is zero fees. No other fund company can touch that, because FZROX is a proprietary Fidelity product. You can only hold it inside a Fidelity account.

It is technically a total market fund, not a pure S&P 500 fund. But it holds a very similar collection of large US companies. The performance difference between FZROX and FXAIX is minimal over time.

The catch with FZROX is portability. If you ever move your account to another broker, you cannot take FZROX with you. You would have to sell your shares and potentially trigger a taxable event. Keep that in mind if flexibility matters to you.

Who is FZROX best for? It is great for investors who are committed to staying at Fidelity long-term and want to eliminate fees completely.

3. FSKAX: Fidelity Total Market Index Fund (Best for Broader Exposure)

FSKAX tracks the entire US stock market, not just the S&P 500. It holds thousands of stocks including small-cap and mid-cap companies that FXAIX does not include.

Its expense ratio is 0.015%, the same as FXAIX. The difference is breadth. If you want exposure beyond the 500 largest companies, FSKAX gives you that.

Many financial advisors consider a total market fund a slightly more diversified option compared to a pure S&P 500 fund. Over long periods, the two tend to perform very similarly since large-cap stocks dominate both.

Who is FSKAX best for? It works well for investors who want a one-stop fund covering the entire US market with the same low fee structure.

Comparing the Three Funds Side by Side

Here is a quick comparison table to help you see the differences at a glance.

Fund	Expense Ratio	What It Tracks	Best For
FXAIX	0.015%	S&P 500	Most investors
FZROX	0.00%	US Total Market	Zero-fee seekers at Fidelity
FSKAX	0.015%	US Total Market	Broader diversification

Fidelity 500 Index Fund vs. Vanguard VOO: Which Wins?

A lot of investors wonder how FXAIX stacks up against Vanguard’s VOO, another widely praised S&P 500 ETF. Let me break it down simply.

FXAIX has an expense ratio of 0.015%. VOO has an expense ratio of 0.03%. Both track the S&P 500. On fees alone, FXAIX wins.

The key difference is structure. VOO is an ETF, which means you can trade it throughout the day like a stock. FXAIX is a mutual fund, so you only trade at end-of-day prices. For long-term investors, this is essentially irrelevant.

If you already invest at Fidelity, FXAIX is almost certainly your best choice. If you use a different broker that does not offer FXAIX, VOO is an excellent alternative.

How to Invest in a Fidelity 500 Index Fund Step by Step

Getting started is easier than most people expect. Here is exactly what to do.

1. Open a Fidelity account. You can open a taxable brokerage account, a Roth IRA, a Traditional IRA, or a 401(k) depending on your situation.
2. Fund your account. Transfer money from your bank account. There is no minimum to open an account.
3. Search for your chosen fund. Type FXAIX, FZROX, or FSKAX in the search bar.
4. Choose the number of shares or dollar amount. You can invest with as little as $1 using fractional shares.
5. Set up automatic investments. Automation is one of the most powerful habits in investing. Set a monthly contribution and let it run.

That is really all it takes. The hard part is not the mechanics. The hard part is staying consistent and not panicking when the market dips.

Smart Tips to Maximize Your Returns with a Fidelity 500 Index Fund

Choosing the right fund is just the beginning. Here is how to make the most of your investment over time.

Invest Consistently with Dollar-Cost Averaging

Do not try to time the market. Instead, invest a fixed amount every month regardless of what the market is doing. This strategy is called dollar-cost averaging. It removes emotion from the equation and ensures you buy more shares when prices are low.

Use Tax-Advantaged Accounts First

If you can, invest in your Roth IRA or Traditional IRA before a taxable brokerage account. The tax benefits inside these accounts compound over decades and can add tens of thousands of dollars to your final balance.

Reinvest Dividends Automatically

Make sure you have dividend reinvestment turned on. When FXAIX pays dividends, those dividends automatically buy more shares. Over time, this compounding effect is enormously powerful.

Do Not Panic Sell During Market Downturns

Every experienced investor will tell you this: the worst thing you can do is sell when the market drops. Downturns are temporary. If you hold through them, history shows the market recovers and goes higher. Selling locks in your losses permanently.

Common Mistakes to Avoid When Picking a Fidelity 500 Index Fund

Even simple index investing has pitfalls. Here are the ones I see most often.

• Obsessing over tiny fee differences. The difference between 0.00% and 0.015% is negligible on a $10,000 portfolio. Both are excellent.
• Holding too many S&P 500 funds at once. If you own FXAIX and FZROX, you are doubling up on the same assets. Pick one.
• Forgetting to invest regularly. Investing once and never contributing again limits your growth dramatically.
• Ignoring your time horizon. If you need money in two years, an S&P 500 fund may be too volatile. These are best for five-plus year goals.
• Trying to pick the perfect entry point. There is no perfect time. Starting today is almost always better than waiting.

Who Should Invest in the Best Fidelity 500 Index Fund?

The best Fidelity 500 index fund is ideal for a wide range of investors. You should strongly consider it if you:

• Are investing for retirement and have at least 10 years before you need the money
• Want a simple, low-cost portfolio without managing individual stocks
• Are a beginner who wants to start investing without overwhelming complexity
• Already have a Fidelity brokerage, IRA, or 401(k) account
• Understand that short-term market fluctuations are normal and part of the process

If you tick most of these boxes, you are exactly the kind of investor these funds are built for.

Frequently Asked Questions

What is the best Fidelity 500 index fund for a Roth IRA?

FXAIX is the top choice for a Roth IRA at Fidelity. It has an ultra-low expense ratio of 0.015%, tracks the S&P 500 directly, and has a long history of strong performance. FZROX is also excellent if you want zero fees and plan to stay at Fidelity long-term.

Is FXAIX or FZROX better?

Both are excellent choices. FZROX has zero fees, which is hard to beat. FXAIX is slightly more portable, and it directly tracks the S&P 500 rather than the total market. The performance difference between them over time is very small. If you plan to stay at Fidelity permanently, FZROX edges it out on cost alone.

What is the minimum investment for a Fidelity 500 index fund?

There is no minimum investment required for FXAIX, FZROX, or FSKAX. You can start with as little as $1 using Fidelity’s fractional shares feature. This makes these funds accessible to nearly everyone.

How does the Fidelity 500 index fund perform compared to the S&P 500?

FXAIX is designed to mirror the S&P 500 as closely as possible. Because it has such low fees, its performance typically comes extremely close to the index itself. In most years, the difference is just a few basis points.

Can I hold FXAIX in a 401(k)?

Yes, if your employer’s 401(k) plan is administered through Fidelity, you may have access to FXAIX. Not all 401(k) plans offer it directly, so check your plan’s fund lineup. If it is available, it is one of the best options you can choose within a 401(k).

Is the Fidelity 500 index fund safe?

No stock market investment is completely safe, and that includes index funds. The value of your investment will go up and down with the market. However, because FXAIX holds 500 large US companies, it is much more stable than holding individual stocks. Over long periods, the S&P 500 has historically recovered from every downturn.

Does FXAIX pay dividends?

Yes. FXAIX pays dividends quarterly. If you enable dividend reinvestment in your Fidelity account, those dividends automatically purchase more shares. This compounding effect significantly boosts your long-term returns.

Should I choose FXAIX or an ETF like SPY or IVV?

FXAIX has a lower expense ratio than SPY (0.09%) and is comparable to IVV (0.03%). As a mutual fund, FXAIX allows automatic contributions of exact dollar amounts, which ETFs do not always support. For hands-off, automated investing, FXAIX is often the better choice for Fidelity account holders.

What are the tax implications of investing in a Fidelity 500 index fund?

In a taxable brokerage account, you may owe taxes on dividends each year and on capital gains when you sell shares. In a tax-advantaged account like a Roth IRA or Traditional IRA, your money grows without annual tax consequences. Always consult a tax professional for advice specific to your situation.

How often should I check my Fidelity 500 index fund?

For long-term investors, checking quarterly or even annually is plenty. Checking too often tempts you to react emotionally to short-term swings. Set your contributions, reinvest dividends, and let time do the heavy lifting.

Conclusion: Start Simple and Stay Consistent

The best Fidelity 500 index fund is one that you actually invest in consistently. For most people, that means FXAIX. It is low cost, well managed, directly tracks the S&P 500, and works seamlessly inside any Fidelity account. If zero fees are your priority and you plan to stay at Fidelity, FZROX is an equally smart choice.

The power of these funds comes not from the funds themselves but from the habit of investing regularly over years and decades. A Fidelity 500 index fund gives you one of the simplest, most proven paths to building real wealth. You do not need to be a financial genius. You just need to start.

Are you already investing in an S&P 500 fund, or are you just getting started? Share your experience in the comments. And if this guide helped you, pass it along to someone who could use a clear starting point.

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Email: johanharwen314@gmail.com
Author Name: Johan Harwen

About the Author: John Harwen is a personal finance writer and long-term investor with over 12 years of experience in index fund investing and retirement planning. He specializes in breaking down complex financial topics into clear, actionable advice for everyday investors. John has helped thousands of readers build smarter portfolios through straightforward, no-fluff content. When he is not writing about markets and money, he enjoys hiking, reading biographies of successful entrepreneurs, and teaching his kids the basics of financial literacy. Follow John for practical investing strategies you can actually use.