E*Trade Online Brokerage Account Review

by Ryan Guina

E*Trade is one of the oldest and well-known online stock brokers in the US. E*Trade is an award winning brokerage firm and offers a wide variety of investing tools, resources, and features that place it among the leaders among both full service brokerages and discount brokerage firms.

ETrade reviewMore importantly, E*Trade is affordable, with a commission and fee schedule that is good for both active traders and long term investors. Let’s take a look at some of E*Trade’s features and why they are a solid brokerage account for a diverse group of investors.

E*Trade Online Brokerage Account Review

E*Trade Features. E*Trade is a full service brokerage firm, offering a full banking service in addition to its brokerage account, mortgages, and other financial products. E*Trade offers multiple service levels to meet different investor needs.

E*TRADE Complete Investment Account. The E*TRADE Complete Investment account is their entry level offering, but don’t let that fool you – there is a lot of service and value in this plan. You have the ability to open an E*Trade bank account which can be integrated into your investment account, making it easy to make quick trades and transfer funds. The E*Trade banking account comes with free unlimited checking, a debit card, free online bill pay, and Free ATM fee refunds. But that’s just the bank – the brokerage offers the following:

  • Investors can buy stocks, bonds, mutual funds, Exchange Traded Funds (ETFs), and even participate in IPOs,
  • There are over 1,300 no-load and no-transaction fee mutual funds,
  • Over 80 commission-free exchange-traded funds (ETFs),
  • Free access to investing tools (see below for more information),
  • Free web seminars, tutorials, videos, and other educational resources,
  • IRAs – no annual fees or account minimums,
  • Complimentary retirement guidance from Chartered Retirement Planning Counselors
  • A suite of state-of-the-art investing and planning tools
  • The minimum balance to open a standard trading account is $500.

Power E*Trade Account. The Power E*Trade Account is the next level service and is automatically available to investors and traders who make at least 10 trades per month or 30 trades or options in a quarter. It offers more advanced trading tools, advanced charts, analytical tools, screening tools, and access to the Power E*Trade Pro platform.

E*Trade IRAs. There are no fees or minimums to open or maintain an IRA through E*Trade.

E*Trade Trading Platform and Investment Tools

E*Trade offers customers a wide variety of trading tools to help make informed trades and investment decisions. Some of these tools include streaming stock quotes, charts, Stock, Fund, & ETF Screeners to find investments that meets your requirements, and an investor resource center where you can conduct research, read articles, and communicate with other investors. E*Trade also features E*Trade Mobile Pro, an app for the iPhone, iPad, and Blackberry. Visit the E*Trade website for more information about their offered investment tools and services.

E*Trade Commissions and Brokerage Fees

The current commissions are $9.99 per trade. Options trades are the same as standard trades, plus the cost of each contract. There are additional items of note for certain types of traders. I recommend visiting the E*Trade website if you have more specific inquiries regarding trade prices.

E*Trade Commissions Commissions
Stock & Options Trades $9.99
Options Contracts $0.75
Futures Contracts $2.99
Margin Rate 7.14%
Bonds $1

Additional rates:

  • IRAs – no fees & no minimums
  • Mutual Funds: over 7,600 available and over 1,100 with no load and no transaction fee
  • Broker assisted trades are $45 for either plan

How Does E*Trade Compare to Similar Brokerages?

E*Trade Customer Service

E*Trade has award winning customer service, with phone support available year round – 24 hours a day, 7 days a week, 365 days a year. You can also contact customer support via a secure email form within your account and receive a response within 48 hours, which is great for those times you have a question, but don’t need an immediate response.

E*Trade Awards and Recognition

E*Trade has won numerous awards and has been recognized by a variety of third party sources. Here is how E*Trade finished in annual rankings by SmartMoney Magazine and Barron’s:

  • SmartMoney Magazine, May 2010 Broker Survey: Trading Tools (5 stars), Customer Service (5 stars), Banking Services (5 stars), Mutual Funds & Investment Products (4 stars) and Research (4 stars).
  • SmartMoney Magazine overall rankings: #2 in 2010; #1 in 2009, 2008, 2007; #2 in 2006.
  • Barron’s Annual Ranking of the Best Online Brokers (Based on Trade Experience, Trade Technology, Usability, Range of Offerings, Research Amenities, Portfolio Analysis & Reports, Customer Service & Access, and Costs): E*TRADE overall ranked #11 in 2010; #10 in 2009, 2008; #8 in 2007; #6 in 2006.

Current E*Trade promotions:

E*Trade has the following offers and promotions available for new customers:

Who Should Try E*Trade?

E*Trade is Perfect for Active Traders

E*Trade is a full service brokerage that offers investing options for any type of investor. However, this online brokerage really shines when it comes to active trading. In fact, E*Trade caters to the active investing crowd, offering free access to their E*Trade Pro platform for those making 30 or more stock or options trades within a calendar quarter.

E*Trade’s upgraded platform offers faster trading through the use of point and click order entry and advanced trading tools. Plus, its platform makes increasing portfolio management control and customization seamless. While all investors enjoy low-cost commissions at E*Trade, active traders get an even bigger discount. Normally, trades cost just $9.99 apiece. However, when investors make more than 150 trades per calendar quarter, commissions drop to just $7.99 per trade.

Smart Choice for Experienced Casual Investors

Because they charge just $9.99 per trade, E*Trade is a great place for casual investors who want to trade as a hobby. Even without upgrading to E*Trade Pro, casual investors can take advantage of E*Trade’s powerful basic platform.

Experienced casual investors also have access to E*Trade’s excellent educational resource center. There, investors will find dozens of articles, videos, and courses designed to educate and prepare investors of all experience levels. Additionally, casual investors will enjoy E*Trade’s low-cost account policies. Brokerage accounts carry no account fees, and the minimum balance requirement of $500 is an easy hurdle to clear.

Ideal for Options Traders

Investors hoping to generate income or hedge their risk by trading options will find a comfortable home at E*Trade. Options traders must upgrade to an E*Trade Pro account where they will receive access to streaming Greeks and the enhanced Options Analyzer. E*Trade’s multi-legged trade ticket allows them to add a total of 4 options (or 3 options plus stock) to a single order. As always, E*Trade offers low-cost commissions on trades. Like with other products, options trades cost just $9.99/trade. An additional $0.75 per contract is also charged.

E*Trade Also Works For Experienced Futures Traders

Futures trading can be hard to find, but E*Trade has it covered. This full service brokerage offers more than 200 futures products, complete with E*Trade’s commitment to low-cost commission prices.

When trading futures at E*Trade, investors may take advantage of their innovative technology that puts live bids & asks at their fingertips. Investors can track their orders in real time on E*Trade’s no-fee trading platform, enjoy competitive margin rates, and lean on E*Trades Futures Support Team for assistance.

E*Trade is a Smart Option for DIY Retirement Investors Seeking Low Costs

Do-it-yourself investors searching for low-cost retirement account options will find E*Trade fits the bill. E*Trade offers no annual fees or account minimums on their IRA products, although brokerage commissions, transaction fees, and other fund fees may apply.

Investors can automatically contribute to their IRA through E*Trade’s Automatic Investing Plan. Simply select either an external or E*Trade account to fund your plan. Then, choose a contribution schedule, select the investments, and let E*Trade handle the rest.

E*Trade Offers “Extras” for Investors Who Have More than $10,000 to Invest

When investors fund a new E*Trade account with more than $10,000, they receive up to 500 free trade commissions that can be used within the first 60 days. Investors may also be eligible to receive a bonus of up to $600 for transferring cash and securities from an external source to E*Trade within 45 days of opening their account. Additionally, those maintaining a brokerage account balance of more than $250,000 are eligible for a free upgrade to the E*Trade Pro platform.

E*Trade Works Best for Investors Comfortable Using Technology

These days, it’s safe to say that most investors are comfortable using technology. However, potential investors should be reminded that E*Trade requires the use of online platforms to complete the trading experience.

In addition to the E*Trade Website and E*Trade Pro platforms, investors also have access to E*Trade Mobile. This mobile app allows investors to access their brokerage account wherever they may be via their smartphone, tablet, or Apple watch. Investors using the app have the ability to place trades, transfer cash balances, and view real-time quotes and news.

Who Should Avoid E*Trade?

E*Trade Wasn’t Made for Investors Who Need Guidance and Advice

As with most online trading brokerages, E*Trade is a great fit for investors who prefer a do-it-yourself approach. However, those seeking investment guidance and recommendations should look elsewhere. Although E*Trade provides an excellent educational resource center, investors will not find specific investing advice tailored to meet their individual needs. Investors who prefer relying on the advice investment professionals would be better suited to invest through another forum that offers hands-on guidance and tools the average investor can use.

Emotional Investors Should Stay Away from E*Trade

Investors who experience emotional swings due to market turbulence should avoid using E*Trade. Investment decisions which are fueled by emotion can lead to poor results and the loss of investment capital. Because of the DIY nature of E*Trade, emotional investors are particularly prone to making mistakes by using this platform. These types of investors are better suited to work directly with an investment professional. A good advisor can help emotional investors avoid losses during turbulent times by advising investors to maintain a level-headed, long-term approach.

E*Trade Isn’t for Beginners with Limited Trading Experience

While the minimum balance requirement is a mere $500, E*Trade may not be the best place for beginners to start trading. Yes, the $9.99 commission fees are affordable, and the E*Trade Investor Education Center provides a plethora of material designed to educate traders. However, specific advice pertaining to a trader’s individual situation is practically non-existent. In addition to gaining market knowledge, learning to use trading platforms properly does include a learning curve. When possible, beginners should learn basic investing strategies, understand trading terminology, and become comfortable with trading platforms prior to putting real money on the line.

E*Trade Isn’t Ideal for “Set it and Forget it” Retirement Investors

Although E*Trade offers an automatic investing plan, investors seeking a “set it and forget it” approach to retirement are not a good fit for this platform. The E*Trade Automatic Investing Plan allows investors to automatically fund their IRAs on a specific schedule by linking external accounts. However, E*Trade does not actively manage these IRAs. Therefore, it is up to the investor to ensure that their portfolio is properly balanced. Those who are interested in a completely hands-off approach may want to look into robo-advisors or hook up with a personal financial advisor in their area instead.

Final Thoughts about E*Trade

E*Trade is not the cheapest discount broker on the scene, but they offer some of the best value. Their full service bank and variety of other free resources and features make E*Trade one of the best discount brokerage firms on the market. For more information or to open an account, visit the E*Trade website.


Published or updated July 13, 2016.
Print or e-mail this article:

{ 7 comments… read them below or add one }

1 GBR Briana

Thanks for this info Ryan. I recently posted on the Personal Dividends forum about stepping into the investment world and had no idea where to start. About a year ago I went to the E*Trade site and was immediately confused and intimidated. I’m going to give it another whirl.

Reply

2 Ryan

Briana, E*Trade is a great option for almost anyone. However, you may find something that is a better match for your specific investment needs. Check out this list of Best Brokerages for a Roth IRA. This article details some of the differences between the mutual fund houses and discount brokerages and the pros and cons of using them for different investing styles. E*Trade is included in the list because I believe they are one of the top brokerage firms out there. Best of luck!

Reply

3 Kurt @ Money Counselor

I’ve been using E*Trade for years and like it a lot. Unfortunately I’m being forced to move all of my and my wife’s accounts elsewhere. We moved to Canada in 2009. Though we’re US citizens, E*Trade is now telling me that it’s not licensed to handle our accounts unless we have a US address. Apparently the company’s unwilling to spend the money on Canadian licensing. So I’m searching for a new firm to handle our accounts that’s not so stingy and set to work with US citizens residing in Canada. Any suggestions would be welcome.

Reply

4 Ryan Guina

Kurt, this sounds like something that would be handled on a case by case basis by each brokerage. I do know that USAA handles investment accounts for many people who live overseas, so they might be worth looking into. USAA has a full service bank (checking, savings, etc.), as well as an excellent brokerage service (trades are $5.95, or $8.95). USAA also has their own mutual funds and they offer financial planning services. You can learn more at their site: USAA Brokerage Services.

Reply

5 Carlos

Any thoughts about their debit card?

Reply

6 Ryan Guina

Carlos, if you are already using E*Trade for banking, then the debit card is a nice feature. Personally, I like to separate my banking / spending accounts from my investing accounts. This barrier makes it more difficult to transfer money from investments to my spending accounts. But as long as you don’t have any issues with that, then the E*Trade debit card is a nice feature.

Reply

7 Aaron @IncomeHoncho

I have an account with Etrade and never really had any problems with them. Service was good, Fees are okay but still a bit up there for me. I would prefer it to be a bit cheaper which would make them a great contender.

Reply

Leave a Comment

Previous post:

Next post:

.