Wealthy PotFSKAX vs FZROX: Is a 0.00% Fee Worth Being Locked In?
FZROX charges 0.00%. Not 0.01%, not "effectively nothing", zero. FSKAX charges 0.015%. On fee alone the answer looks obvious, and most comparisons stop there. They should not. The zero comes with two strings attached, and one of them is difficult to undo once you are holding the fund in a taxable account.
The Short Answer
- Investing inside a Fidelity IRA or 401(k) and happy to stay at Fidelity? FZROX. In a retirement account the lock-in costs you little, because moving the position later has no tax consequence.
- Investing in a taxable brokerage account, or think you might move brokers one day? FSKAX. The 0.015% is a genuinely small price for a fund you can transfer without selling.
FSKAX vs FZROX Side by Side
| Feature | FSKAX | FZROX |
|---|---|---|
| Full name | Fidelity Total Market Index Fund | Fidelity ZERO Total Market Index Fund |
| Expense ratio | 0.015% | 0.00% |
| Index tracked | Dow Jones U.S. Total Stock Market Index | Fidelity U.S. Total Investable Market Index, Fidelity's own |
| Minimum | $0 | $0 |
| Fund size | About $142 billion | About $41 billion |
| Transferable to another broker | Generally yes | No, Fidelity only |
What the Zero Fee Actually Costs You
A fund still has costs to run. When the stated expense ratio is 0.00%, those costs are being absorbed by the fund company rather than passed to you. Fidelity launched the ZERO funds in 2018 as a way to bring customers onto its platform, and that is the trade being offered: a free fund in exchange for your account staying where it is.
The first string attached is the index. FZROX tracks the Fidelity U.S. Total Investable Market Index, which Fidelity built and maintains itself, rather than licensing a third-party benchmark the way FSKAX licenses the Dow Jones U.S. Total Stock Market Index. Avoiding the licensing fee is part of how the zero is achieved. In practice a broad total-market index built by one provider looks much like one built by another, and this is not a reason for alarm. It does mean there is less independent scrutiny of the index's construction than a widely used third-party benchmark receives.
The Lock-In Nobody Mentions
This is the part that matters, and most comparison pages skip it.
ZERO funds cannot be transferred in kind to another brokerage. If you decide in ten years that you would rather hold your investments at Schwab or Vanguard, you cannot simply move an FZROX position across the way you can move most funds and ETFs. You have to sell it at Fidelity and repurchase something else at the new broker.
In an IRA or 401(k), that is an inconvenience and nothing more. Selling inside a retirement account triggers no tax.
In a taxable account, it is a real cost. Selling a position that has grown realises a capital gain, and you owe tax on it in that year. The longer you hold and the better it does, the larger that embedded bill becomes, so the cost of leaving grows over exactly the same period the zero fee is supposedly saving you money. A fund you chose because it was free can end up being the expensive one to walk away from.
How Big Is the Fee Gap, Really?
Worth putting a number on it, because the gap is smaller than "zero versus not zero" makes it sound.
The difference is 0.015% a year. On a $100,000 balance that is $15 a year. On $500,000 it is $75 a year. Those are the amounts FZROX saves you, before considering anything else.
Set that against a single realised capital gain on a taxable position you are forced to sell, and the arithmetic usually tilts the other way. Fifteen dollars a year is not a number that should drive you into a fund you cannot move.
Use the compound interest calculator to see how a 0.015% difference in fees compounds over your own time horizon. For most balances the answer is: less than you would guess.
Your Account Type Decides This
In a Fidelity IRA or 401(k): FZROX is a reasonable choice. The lock-in has little bite because you can sell and switch inside the account with no tax consequence, and the fee saving, while small, is real.
In a taxable brokerage account: FSKAX is the better default. Paying 0.015% buys you the ability to change your mind later without a tax bill, and that optionality is worth more than $15 per $100,000 per year to most people.
If you already hold FZROX in a taxable account: do not panic and sell. That would trigger exactly the tax cost this article is warning about. The usual approach is to keep what you have and direct new contributions to a portable fund instead, letting the position shrink as a share of your portfolio over time.
FAQ
Is FZROX really free?
The stated expense ratio is genuinely 0.00%, so no annual fee is deducted from your holding. Fidelity absorbs the running costs as a way of attracting and keeping customers.
Can I transfer FZROX to Vanguard or Schwab?
No. ZERO funds are proprietary to Fidelity and cannot be transferred in kind. You would have to sell the position first, which realises a taxable gain in a taxable account.
Is the Fidelity index worse than a third-party one?
There is no evidence of that. Broad total-market indexes from different providers are constructed similarly and behave similarly. The difference is that Fidelity's is maintained in-house rather than by an independent index provider.
Do FSKAX and FZROX hold the same companies?
Both aim to cover the whole U.S. stock market, so their holdings overlap almost completely. Owning both together achieves very little.
Which should a beginner pick?
If you are investing in a Fidelity retirement account and expect to stay, FZROX is fine. If this is a taxable account, take FSKAX, the fee difference is small and the flexibility is worth keeping.
This article is for general information and is not investment advice. Fund figures were taken from Fidelity's published fund pages on 2026-09-21 and can change; confirm current figures before you invest. Tax outcomes depend on your own circumstances.