Updated July 24, 2016

E*TRADE Review: Pros and Cons

Read more about E*TRADE
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E*TRADE is a highly well-known name, but does that mean it’s that much better than its competitors? Read our in-depth review and see how it compares.

E*TRADE Promotions

Overall Score

4.0

Stock Trading

3.0

Options Trading

4.0

Banking

3.0

Mobile App

5.0

Commissions and Fees

3.0

Ease of Use

5.0

Online Community

4.0

Research

4.0

Trading Platform

5.0
5-point scale (the higher, the better)

Pros and Cons

  • Expansive set of resources and tools
  • Easy to use website
  • Industry leader
  • Higher trade fees than many other online brokers

Bottom Line

Online broker with one of the best user interfaces

If you've watched any TV at all in the last few years, it's highly likely that you've come across a commercial for E*TRADE. Unlike some of its major competitors, E*TRADE is a highly advertised and fairly well known online brokerage, even outside financial circles.

But does the fact that it's such a recognized name mean it's that much better than its competitors?

Long-term, low-frequency traders and beginners will probably appreciate the investor guidance tools and access to help from live financial professionals. But the more experienced, high-frequency traders may be turned off by the platform's higher fee structure.

Before we dive into the detailed review, let's go over the pros and cons.

Benefits: Why We Like It

  • Beginner Friendly: E*TRADE's website is easy to navigate and has a great built-in investor education center. There's also the option to reach out to a broker or even open a managed portfolio with a financial advisor if you want to take a more hands-off investment approach. All this makes E*TRADE an easy-to-use online trading platform for even the most novice of investors.

  • Breadth of Services: E*TRADE is pretty much a one-stop shop for financial services. Besides a large spectrum of investments ranging from stocks and bonds to ETFs and mutual funds, you can also open and maintain checking accounts and IRAs, and even apply for a mortgage.

  • Tools: All traders have access to the basic research center, which features real-time quotes, interactive charts, and even tax advice. More active traders (30+ trades per quarter) are automatically upgraded to the E*TRADE Pro platform. This gives you additional tools like customizable watch lists, the ability to stream CNBC, and E*TRADE 360, which centralizes all your investments and trading information into one place. E*TRADE Pro also comes with extended trading hours that begin at 7am EST.

Disadvantages: Why You Might Want to Look Elsewhere

  • Higher Fees: As per transaction costs go, E*TRADE fees are higher than many other online brokerages. Fees are $9.99 per trade, which is twice as much as competitors like TradeKing and OptionsHouse. Active traders do get a discount of $7.99 per trade if you make at least 150 trades per quarter.

    Other products come with fees as well: the Max Rate Checking Account (a type of checking account that pays interest) includes a $15 per month fee. E*TRADE will waive this fee if you make at least one direct deposit of at least $200 per month, perform at least 30 trades per quarter, or have a combined balance across all your E*TRADE accounts of at least $50,000.

  • Account Minimums: You need a minimum of $500 to open an account on E*TRADE. This isn't such a huge deal, but there are quite a few other online brokerages that have no account minimum for simple investments.

Who E*TRADE Is Best For

E*TRADE is a useful platform for investors along all experience levels who want to open stable, long-term investment accounts.

You may want to look elsewhere if you don't like the higher per transaction fees. But if you're someone who plans to make a few stock, mutual fund, or ETF purchases and hold them, E*TRADE is an easy-to-navigate, user-friendly platform that provides you with all the information and tools you need. Business News Daily even listed E*TRADE as one of the top three "do-it-yourself" brokerages.

Tip: Beginners will also like E*TRADE's Investor Education Center. It explains how to look for stocks to buy and provides timely marketplace info that can help you make informed decisions and manage your risks.

E*TRADE FEES EXPLAINED

E*TRADE fees for investing are not the lowest, though the trade fee does drop when you've reached a certain volume of trades per calendar quarter. Here are a few of the fees that are significant to online investors:

  • Stocks, Options and ETFS: $9.99 (0-149 trades per quarter), $7.99 (150-1,499), $6.99 (1,500 and above)
  • Bonds (secondary): $1
  • Broker-Assisted Trades: $25 added to fee
  • Mutual Funds: $19.99 (no fees for no-load, no-transaction fee funds)
  • Professional Managed Investments: Annual advisory fee plus $25,000 minimum investment
  • Select Portfolios: Fee varies by fund, $10,000 minimum investment

Opening the account: If you do decide to do any business with E*TRADE, you need a minimum of $500 to open a brokerage account. You can either do an electronic transfer from your bank or other financial institution, send a check via snail mail, or make a deposit into an E*TRADE branch. Within a few days of making your initial deposit, you'll be ready to go.

Always keep in mind that there are numerous other applicable fees, including those in conjunction with retirement funds and banking. The CreditDonkey comparison of E*TRADE with other top discount brokerages will help you gauge how E*TRADE's fees fare in the competitive market. They're certainly not the lowest.

Read: E*TRADE vs Scottrade

E*TRADE RESEARCH

We really like E*TRADE's website, as it's loaded with helpful resources unavailable on other sites. E*TRADE's research, tools, and guidance are second to none. You'll find grids, easy-to-read fee charts, tax advice, and downloadable forms - all laid out in a user-friendly interface.

Where E*TRADE really excels is with its real-time market streaming, an invaluable asset for any investor. While you don't exactly feel like you're on the market floor, there's still a bit of a rush watching your stocks move (hopefully upward) while it's happening.

E*TRADE PRO Review

Those who want even more intensive tools and a more customizable experience could benefit from using E*TRADE Pro.

Let's say you're a novice investor who has made a little cash and got caught up in the frenzy of the market. Your trading has increased, and before you know it, you're making multiple trades a month. This is when you've hit the "big-time" as far as E*TRADE is concerned. You're rewarded with access to the E*TRADE Pro platform, which is automatically available for free to active traders who make at least 30 stock or option trades per quarter.

This more sophisticated, customizable desktop platform has technologically advanced trade tools that are not available on the basic brokerage site. And if you're trading at that level, you'll appreciate these additional tools designed to assist in positioning you as optimally as possible in the market.

Among its advantages, E*TRADE Pro offers:

  • extended hours for trading, beginning at 7 a.m. EST
  • real-time technology that allows you to track the top performing sectors and industries as they're happening
  • ability to create customized streaming lists of specific stocks you're interested in, so you don't have to wait for the board to scroll through countless ticker symbols that you don't care about
  • ability to chart risks
  • live streaming of CNBC on your computer or mobile phone
  • E*TRADE 360, which combines all your investments and trade information in one place

Please note: while E*TRADE rewards its active investors with the bells and whistles of Pro, it doesn't eliminate your fees. You still pay the standard per trade fees, plus $25 for any broker-assisted trade. You'll also be charged an additional $.0005 per share for any extra-hours trading.

PENNY STOCKS

If you've seen The Wolf of Wall Street, you've heard of penny stocks and have seen the big payday they can offer, as well as their downside. Because penny stocks can take some finesse and a deft hand to trade, they're not for everyone.

The Securities and Exchange Commission defines a penny stock (also known as an over-the-counter, bulletin board, or Pink Sheet stock) as any common stock trading under $5/share. With their extreme cheapness comes risk. In fact, not all online brokerages will allow you to trade them.

E*TRADE does, but with caveats:

First off, only limit orders (set buy and sell prices) are allowed. Short selling (trading on a borrowed stock) is not allowed, and you can't trade any stock with a market value of less than $10/share until seven business days after your account application is approved. If you need assistance on a penny stock trade, you can call customer service, but keep in mind you'll be charged that $25 fee for a broker-assisted trade.

FOREX (FOREIGN EXCHANGE)

Forex is the most widely traded financial product in the world. It's bought and sold in pre-determined pairs: you buy a currency pair if you think the exchange rate will rise in the future, and you sell if you think the rate will go down.

If you'd like to try this, E*TRADE helps you out by providing $50,000 in virtual money and a free practice exercise so you can try it out first in the forex market before going into it with your own hard-earned cash.

You will need a minimum of $2,000 to open a forex account. E*TRADE makes 56 currency pairs available to trade, and best of all, there's no fee.

BANKING

E*TRADE is not only a brokerage, it's also an FDIC insured bank. There are two types of checking accounts you can open:

  • For a non-interest bearing checking account, a $100 minimum deposit is required; there are no minimum balance requirements, no monthly fee, and a free debit card. You get free, unlimited online bill payment and unlimited transactions, as well as unlimited ATM refunds for withdrawals. This is a real plus.

  • E*TRADE's Max-Rate checking account is an interest earning account at a current APR of 0.05%. You have to keep a monthly balance of at least $5,000. There is a fee of $15/month for this account, but you can get it waived if you set up one direct deposit of at least $200/month, keep a total combined balance of $50,000 or more across all your E*TRADE accounts, or execute at least 30 trades per quarter. If you do a lot of business with E*TRADE and have a fair amount of money deposited with them, the Max-Rate checking account seems like a good option.

Tip: Even though their name suggests otherwise, E*TRADE isn't only an Internet-based entity. If you prefer talking to someone face-to-face, there are branches in 17 states, plus the District of Columbia.

E*TRADE IRA

It's never too early to start saving for retirement, and IRAs (Individual Retirement Accounts) make it possible to accumulate the wealth you need in addition to the 401(k) you get from your employer.

E*TRADE is a good place to start your first IRA investment because there are no annual fees and no account minimums. It offers several types of IRAs, including Traditional, Rollovers, and the Roth IRA. You also get many low-cost options, including 1,300 no transaction fee mutual funds and over 80 commission-free ETFs.

Read: Best Roth IRA Providers

MANAGED PORTFOLIO

If you're still a little green at investing and want some assistance, you have the option of using a professional financial advisor. E*TRADE offers a Capital Management team to help you diversify your investments and gear them towards your specific needs.

They charge on a prorated basis, based upon your portfolio's worth. Despite the fee, it might be worth utilizing, especially if you're not a financial whiz and find the whole thing overwhelming. But be aware, if you do go with an E*TRADE advisor, you can't make trades on your own anymore.

E*TRADE MOBILE APP

The E*TRADE free mobile app is available on both Apple and Android devices, and will essentially allow you to make trades while you're getting breakfast at the drive-thru.

You can also manage your accounts and get free real-time quotes, news, and charts. If you're on the go and see a company you're considering investing in, the mobile app allows for barcode scanning to access information about the company. It also has voice recognition (an online brokerage "Siri," if you will) and lets you make mobile check deposits into your E*TRADE account.

Some services, such as CNBC live TV streaming and Bill Pay, are available on smartphones but not their tablet counterparts, so be sure to check E*TRADE's website to see what applications can be performed on your preferred device.

Pros and Cons of E*TRADE

We're nearing the end of the review now, so before we get onto to comparisons with other online brokerages, let's recap the pros and cons.

Pros:

  • Expansive set of resources and tools
  • Clear, easy-to-use website
  • Industry leader

Cons:

  • Higher trade fee than other online brokers
  • Might have too many options and overwhelm people
  • Branches are not available in every state

How It Compares

Scottrade: Scottrade offers cheaper trades without the complicated tiers but has a $2,500 minimum deposit requirement (as opposed to E*TRADE's $500). Plus Scottrade does not offer forex and futures trading.

 

E*TRADE

Scottrade

 

Benefits and Features

Stock Trading$9.99 per trade
$7.99 per trade if you make 150-1499 trades a quarter
$6.99 per trade if you make 1500+ trades a quarter
$7 per trade
Options Trading
$9.99 + $0.75 per contract
$7 + $0.70 per contract
Mutual Fund Trading$0 for no-load, no-transaction-fee funds
$19.99 for transaction-fee funds
No Fee to Buy/Sell/Exchange No-Load, No-Transaction Fee Funds
$17 to Buy/Sell/Exchange No-Load Funds
$0 to Buy Load Funds and $17 to Sell/Exchange Load Funds
Commission Free ETFs118 including ETFs from WisdomTree, Global X Funds, and db-X Deutsche Bank 
Penny Stocks
$7 per trade + 0.5% principal for any stock trading under $1
Broker Assisted Trades
$25 + Regular Commission
$32
Inactivity Fee
$0
$0
Maintenance Fee
$0
$0
Minimum Deposit$500 for brokerage accounts
No account minimum for retirement accounts
$2,500 for brokerage accounts
No account minimum for retirement accounts
BankingChecking account offers no minimum balance requirements, free online bill pay, and unlimited debit card and check transactions.Scottrade Bank has no monthly maintenance fees, ATM reimbursement program, online bill pay, and mobile banking.
Mobile App
Desktop AppE*TRADE Pro (requires you execute at least 30 trades during a calendar quarter or maintain brokerage account balance of at least $250,000)ScottradeELITE (requires you execute 9 or more stock or option trades during the past 3 months, have $25,000 in your primary account, or have $15,000 in your primary account and combined linked assets of $25,000 or more)
Forex Trading
 
Futures Trading
 
Customer Service
(650) 599-0125
(800) 619-7283 (Monday to Friday 6am to 1am Eastern; Saturday and Sunday 9am to 7pm Eastern)
Locations
30
More than 500 branch locations
Online CommunityETrade Community lets you exchange trading and investing ideas with other ETrade customers. 
SeminarsLive events and educational seminars at local branches.In-person branch seminars, online events and live webinars
Virtual Trading ScottradeELITE offers virtual trading
Stock Trading
Options Trading
Banking
Mobile App
Commissions and Fees
Ease of Use
Online Community
Research
Trading Platform
Customer Service

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

E*TRADE: Pricing information from published website as of 01/19/2015

Scottrade: Pricing information from published website as of 12/11/2016

E*TRADE vs TD Ameritrade: Ameritrade's fees are on the higher end too, at $9.99 per trade, and the brokerage-assisted trade fees are also significantly higher at $44.99 per trade. Ameritrade does offer a great trading platform and superior research offerings that will suit more experienced investors.

 

E*TRADE

TD Ameritrade

 

Benefits and Features

Stock Trading$9.99 per trade
$7.99 per trade if you make 150-1499 trades a quarter
$6.99 per trade if you make 1500+ trades a quarter
$9.99 per trade
Options Trading
$9.99 + $0.75 per contract
$9.99 + $0.75 per contract
Mutual Fund Trading$0 for no-load, no-transaction-fee funds
$19.99 for transaction-fee funds
$0 for no-transaction-fee mutual funds
$49.99 for no-load mutual funds
$0 for load mutual funds
Commission Free ETFs118 including ETFs from WisdomTree, Global X Funds, and db-X Deutsche BankOver 100 including 34 Equity Funds, 33 Bond Funds, 31 International Funds, and 2 Commodity Funds.
Penny Stocks
Broker Assisted Trades
$25 + Regular Commission
$44.99
Inactivity Fee
$0
$0
Maintenance Fee
$0
$0
Minimum Deposit$500 for brokerage accounts
No account minimum for retirement accounts
$0
BankingChecking account offers no minimum balance requirements, free online bill pay, and unlimited debit card and check transactions.Cash Management account offers free ATM withdrawals, no monthly maintenance fees, free online bill pay, and free check writing.
Mobile App
Desktop AppE*TRADE Pro (requires you execute at least 30 trades during a calendar quarter or maintain brokerage account balance of at least $250,000)
thinkorswim
Forex Trading
Futures Trading
$2.25 per contract (plus exchange & regulatory fees)
Customer Service
(650) 599-0125
(800) 669-3900
Locations
30
More than 100 locations in 34 states
Online CommunityETrade Community lets you exchange trading and investing ideas with other ETrade customers. 
SeminarsLive events and educational seminars at local branches.
Online webcast
Virtual Trading Paper Trading to practice/test strategies and ideas.
Stock Trading
Options Trading
Banking
Mobile App
Commissions and Fees
Ease of Use
Online Community
Research
Trading Platform

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

E*TRADE: Pricing information from published website as of 01/19/2015

TD Ameritrade: Pricing information from published website as of 01/19/2015

E*TRADE vs Fidelity: Fidelity's trade fees are slightly lower, but the minimum deposit is $2,500. In our opinion, it is another great comprehensive online brokerage offering a wide range of services and in-depth research.

 

E*TRADE

Fidelity

 

Benefits and Features

Stock Trading$9.99 per trade
$7.99 per trade if you make 150-1499 trades a quarter
$6.99 per trade if you make 1500+ trades a quarter
$7.95 per trade
Options Trading
$9.99 + $0.75 per contract
$7.95 per online trade, plus $0.75 per contract
Mutual Fund Trading$0 for no-load, no-transaction-fee funds
$19.99 for transaction-fee funds
$0 transaction fee for Fidelity funds
$0 on purchase for NTF (no transaction fee) non-Fidelity funds. ($49.95 on redemption if held less than 60 days)
$49.95 on purchase for non-Fidelity funds; $0 on redemption. (Certain funds may have a $75 transaction fee).
Commission Free ETFs118 including ETFs from WisdomTree, Global X Funds, and db-X Deutsche Bank85 including 11 Fidelity Sector ETFs, 3 Fidelity Bond ETFs, Fidelity ONEQ, and 70 commission-free funds from iShares ETFs
Penny Stocks
 
Broker Assisted Trades
$25 + Regular Commission
$32.95 per trade for representative-assisted trades.
Inactivity Fee
$0
$0
Maintenance Fee
$0
$12 per year for each noncore Fidelity fund under $2,000.
$25 per year for SIMPLE IRAs.
$48 per year ($12 per quarter) administrative fee for Fidelity HSA.
Minimum Deposit$500 for brokerage accounts
No account minimum for retirement accounts
$2,500
BankingChecking account offers no minimum balance requirements, free online bill pay, and unlimited debit card and check transactions.Fidelity Cash Management Account includes reimbursed ATM fees, no monthly fee, no minimum balance requirement, FDIC insurance, mobile check deposit, free billpay and free checkwriting.
Mobile App
Desktop AppE*TRADE Pro (requires you execute at least 30 trades during a calendar quarter or maintain brokerage account balance of at least $250,000)Active Trader Pro (requires you trade 36 times or more in a rolling 12 month period)
Forex Trading
 
Futures Trading
 
Customer Service
(650) 599-0125
(800) 343-3548
Locations
30
More than 180
Online CommunityETrade Community lets you exchange trading and investing ideas with other ETrade customers. 
SeminarsLive events and educational seminars at local branches. 
Virtual Trading 
Stock Trading
Options Trading
Banking
Mobile App
Commissions and Fees
Ease of Use
Online Community
Research
Trading Platform
Mutual Fund Trading

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

E*TRADE: Pricing information from published website as of 01/19/2015

Fidelity: Pricing information from published website as of 03/09/2016

BOTTOM LINE: Why Use E*TRADE

You get what you pay for, and in E*TRADE's case, you get a lot. More than just a discount brokerage, E*TRADE borders on being a full-service financial institution, with many options at your disposal. It can assist you in developing from a beginner to an active investor. At the same time, realize there is no such thing as "get rich quick"; you can and will likely lose money when you invest in riskier products, like stocks, so you need to tread carefully, know your risks, and, as always, do your homework.

(Additional Writing by Leah)

Cynthia Cohen is a retail analyst at CreditDonkey, a stock broker comparison and financial education website. Write to Cynthia Cohen at cynthia@creditdonkey.com. Our data-driven analysis has been recognized by major news outlets across the country and has helped families make savvy financial and lifestyle decisions. (read more)

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

More from CreditDonkey:


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Scottrade

$100 in Transfer Fees Refunded. No Set-Up Fees. No Annual Fees

TD Ameritrade

Get 60 Days of Commission-Free Trading

Fidelity

Get $200 Deposit Bonus


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