E*TRADE Bank Review: Great for APYs and No-Fee Accounts

E*TRADE Bank is an online bank with several deposit accounts, including checking and savings, that mesh perfectly with an E*TRADE brokerage account. The bank is well-known for its great customer service, fast electronic transfers, and out-of-network ATM reimbursements, along with decent APYs on its high-yield savings account. If you know and love E*TRADE as a broker, find out what makes its bank products unique in this expert review.

E*TRADE offers one savings account through its partnership with Morgan Stanley Private Bank -- the E*TRADE Premium Savings Account.

E*TRADE Premium Savings Account

The E*TRADE Premium Savings Account is a high-yield savings account with a 4.25% APY. It has no monthly maintenance fees, no minimum requirements, and can offer up to $500,000 in FDIC insurance -- double the usual amount. You can transfer money instantly from your E*TRADE Premium Savings Account to all other E*TRADE accounts, including checking and brokerage, but it will take a few days to transfer money to an external account.

Unlike other savings accounts, this one doesn't come with an ATM or debit card. What's worse is that E*TRADE limits your withdrawals and transfers to six per month. Any beyond that and E*TRADE could close your account, convert it into a checking account, or remove your transfer capacity. That said, if you want to withdraw cash from an ATM, you could pair it with an E*TRADE checking account for instant transfers.

E*TRADE offers two checking accounts -- and both earn interest. Let's delve deeper into both accounts and see what they offer.

E*TRADE Checking Account

The E*TRADE Checking Account is a free checking account with no monthly minimums and very few of the traditional fees associated with checking accounts, such as wire transfers (incoming) and stop payments. Better yet, this free checking account earns a 1.50% APY, which is pretty decent for a free checking account. The account comes with a debit card, which you can use at ATMs, plus you'll get unlimited ATM reimbursements nationwide.

E*TRADE Max-Rate Checking

E*TRADE Max-Rate Checking is a high-yield checking account that earns a competitive 3.00% APY. The account will reimburse ATM fees worldwide -- a rare perk for a checking account. The account does have a $15 monthly maintenance fee, which you can waive by maintaining a monthly average balance of $5,000.

E*TRADE CD accounts

While E*TRADE doesn't issue its own CDs, it does offer E*TRADE brokered CDs. These are CDs that E*TRADE buys in bulk from numerous banks and packages together with its own terms and APYs. Like other brokered CDs, you can buy and sell E*TRADE CDs on a secondary market -- which could result in a profit or loss -- as well as purchase them new. You'll need an E*TRADE brokerage account to view and purchase current CD offerings.

Brokered CDs often have higher APYs than bank CDs, though there is a catch: Unlike bank CDs, brokered CDs have simple interest, meaning you'll earn interest on your principal only, not on any interest you've already accumulated. Finally, brokered CDs come with up to $250,000 in FDIC insurance per depositor, per insured bank. That means, if you bought four CDs from four different banks, you could have up to $1 million in FDIC insurance.

Compare CD rates

E*TRADE doesn't display its CD rates publicly. Instead, you have to log into your E*TRADE account to view them. But to give you an idea of what a competitive CD rate looks like, here are some of today's top offerings.

E*TRADE doesn't have great customer service reviews. In fact, it ranks low on most third-party websites. It currently maintains an F rating with the Better Business Bureau, with 140 unanswered complaints and 34 that weren't resolved. Its Trustpilot account is no better: out of more than 330 reviews, it currently has a 1.4 out of 5 stars rating. Although these ratings represent all of E*TRADE's financial services -- including its brokerage accounts -- it's something to keep in mind if customer service is important to you.

E*TRADE doesn't offer bank relationship benefits. Instead, it offers decently high APYs across all its accounts, from its E*TRADE Max-Rate Checking to its E*TRADE Premium Savings Account. Often, you'll find relationship benefits -- such as waived account fees or higher APYs when you maintain several account types at the same bank -- at big banks, like Wells Fargo or Chase.

E*TRADE Bank has a decent selection of deposit accounts, but it might not have everything you're looking for. If it's not a good fit for you, here are a few other banks worth considering.

Charles Schwab Bank

Like E*TRADE, Charles Schwab Bank offers a full suite of brokerage, banking, and financial services. As a bank, it offers a variety of no-fee checking and savings accounts, some with reimbursements on ATM fees incurred worldwide. Its APYs aren't as strong as E*TRADE, although it does have interest-bearing checking accounts and a great selection of brokered CDs.

Chase

For a large branch network and a full range of deposit accounts, look no further than Chase. As the largest bank in the U.S., Chase has plenty of offers, from checking to savings to CDs to credit cards and mortgages and personal loans. Its APYs are nothing to get excited about -- indeed, some rank among the lowest -- but if in-person service is what you're after, you might be happy with one of its 4,700 branches. It also offers lucrative relationship benefits if you qualify for Chase Sapphire membership.

E*TRADE might be right for you if:

• You have an E*TRADE brokerage account and want to complement it with a high-yield deposit account.
• You want to earn one of the best APYs for a checking account.
• You don't want to bank in person and don't mind waiting a few business days for cash to hit your external account.

Along with its deposit accounts, E*TRADE offers several brokerage accounts, including the following.

E*TRADE brokerage

• Brokerage Account
• Coverdell ESA
• Custodial Account

E*TRADE retirement

• Rollover IRA
• Roth IRA
• Traditional IRA
• Beneficiary IRA
• E*TRADE Complete™ IRA
• IRA for Minors

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Our methodology for scoring banks and credit unions revolves around evaluating key aspects such as annual percentage yield (APY), brand reputation, fees and minimum requirements, and additional perks.

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