This E*TRADE review will show how the online stock broker simultaneously caters to active stock and options traders with multiple trading platforms and $0 commissions, while also appealing to long-term investors with thousands of mutual funds and ETFs that can be traded completely free. We'll tell you everything you need to know about the online broker, from how to get free trades every month to outlining what kind of investor E*TRADE is really the right fit for.
E*TRADE manages to cater to active traders with multiple trading platforms, while also appealing to long-term investors with thousands of mutual funds and ETFs that can be traded for free.
$0 per trade
This stock broker is a good fit for: Both long-term investors and stocks and options traders. E*TRADE is a full-featured broker that consistently delivers for the majority of investing needs (and more).
U.S. listed stock, ETF, and options trades are commission free. A standard fee of up to $0.65/contract is charged for options trades.
E*TRADE's ETF research, screening, and prebuilt portfolios simplify investing for passive investors, which are necessities for brokers for beginners.
Customers can choose from four categories of managed portfolios that are professionally managed and constructed for whatever stage an investor may be in their investing journey. E*TRADE's robo-advisor, E*TRADE Core Portfolios, is particularly interesting with a minimum investment of just $500.
E*TRADE offers the standard traditional IRA and Roth IRA, plus other IRA accounts, such as Rollover IRAs, Beneficiary IRAs, and IRAs for minors.
Though we're long-term investors who don't necessarily care about flashy charts, it's hard to deny that E*TRADE has built a large following who love its browser and desktop-based platforms. Its free Power E*TRADE platform has a particularly large fan base among options traders.
People who live near an E*TRADE branch get an additional avenue for customer support through one of its brick-and-mortar branches. Given its branch network isn't as robust as TD Ameritrade, Fidelity, or Schwab, you may want to see if there's an E*TRADE nearby before opening an account. (Frankly, 24/7 phone and online chat support is good enough for most investors, anyway.)
E*TRADE has no minimum deposit requirement for standard brokerage accounts or IRAs. Of course, mutual funds offered through E*TRADE can have their own minimum investment requirements that are higher or lower than the minimum to open an account.
While its savings and checking accounts don't offer the highest rates, customers will benefit from the simplicity of managing many of their money needs in one place.
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It's worth noting that E*TRADE has some of the highest margin interest rates among the best stock brokers. While we don't view this as a major negative (it helps discourage what could be irresponsible trading behavior), it's worth noting if you regularly use margin when you invest.
E*TRADE used to allow its customers to invest directly on many foreign stock exchanges, but it no longer offers this feature. If you want the ability to buy and sell stocks that list only on non-U.S. exchanges, you may want to look elsewhere.
If you want to invest in just stocks, options, and ETFs via a mobile app: Robinhood packs in one of the leading mobile investing experiences around. Importantly, it also includes $0 commissions for stocks, ETFs, and options, whereas E*TRADE does charge a fee per options contract.
If you want lower margin rates: Interactive Brokers offers the lowest margin rates we've come across, and the competition isn't even close -- the broker's margin rates are more than half the competition. But Interactive Brokers' trading tools and overall pricing structure and experience are more complex, which may push investors seeking a simpler overall experience to E*TRADE.
The discount brokerage industry has changed for the better. As prices have only gone down over time, the difference between the costliest brokers and the cheapest brokers now amounts to just a couple dollars per trade.
|Stocks and ETFs||Options||Mutual funds|
|$0||$0 + up to $0.65 per contract||$0-$19.99|
E*TRADE is now in line with most of the industry by offering $0 commissions. Customers who make at least 30 options trades per quarter see a discounted rate of $0.50 per contract. E*TRADE's option fees have fallen from one of the highest among discount brokers to one of the lowest for active traders who qualify for lower pricing.
E*TRADE’s commissions are flat, too, so those who use E*TRADE to trade low-priced stocks (penny stocks) won’t endure higher commissions for buying thousands of shares in one transaction. Likewise, E*TRADE’s dividend reinvestment feature allows for reinvesting dividends on certain stocks without paying a commission, and it also allow dividends to be reinvested into partial shares of stock. These combined cost-cutting perks are common areas we think make for the best online stock brokers for beginners.
Fund investors will find plenty to like about E*TRADE. That's because it offers a wide selection of mutual funds, and many mutual funds can be purchased without paying a commission or transaction fee.
|Total mutual funds||More than 9,000|
|No-load, no-transaction-fee mutual funds||More than 4,400|
With more than 4,400 no-load, no-transaction-fee mutual funds, E*TRADE offers far more truly free funds than most other brokers. Though many may think of E*TRADE for day trading, it's just as much a brokerage for long-term mutual fund investing, too.
The costs of having and using a brokerage account or IRA go beyond what it costs to make a trade. Discount brokers also charge certain fees for activity, and it's worth reading a broker's fee disclosures in full before opening an account. That said, we took a look at E*TRADE's fee list, and thought there was one fee in particular that necessitated some discussion.
Other than the early redemption fee, there aren't any fees that stick out as being particularly notable. E*TRADE doesn't charge an inactivity fee, so investors don't have to worry about seeing their balance getting drained if they don't log in to make a trade every few months.
Active traders love E*TRADE's basic web platform, as well as its advanced platform for active traders who qualify for access.
Starting first with the basic web platform, it contains many of the features active traders and investors like to see -- free streaming market data, market commentary, analyst research, and a lengthy list of screeners to sort the market to find good investments. Making a trade is as easy as making a few clicks, simple enough for investors of all experience levels.
Alternatively, E*TRADE has a powerful web-based platform thanks to its acquisition of OptionsHouse, a competing brokerage it acquired in 2017. The Power E*TRADE platform offers impressive charting capabilities, and options trading features that have made a favorite among option traders. In particular, the platform produces graphics to show the maximum profit or loss and breakeven point for a given options trade, which makes it easy to see the potential risks and rewards of complex (multi-leg) options positions. With features that include Level II quotes, advanced charting tools, and even a live Bloomberg TV feed, it's built with active traders in mind.
E*TRADE Mobile and the Power E*TRADE app are available on iOS, Android, and Windows devices, giving customers a powerful platform on which they can place trades on just about any device at any time.
E*TRADE margin rates are on the higher end of brokers we've reviewed. Here's a rundown of the broker's margin rates by margin balance:
For investors who use a lot of margin, the cost of carrying a balance at a high rate may quickly overshadow the benefits of lower commission prices or a fancy trading platform, since carrying a balance as small as $5,000 on average would cost nearly than $450 over the course of a year.
Of course, few long-term investors use margin anyway, choosing instead to simply use a cash account in which they buy or sell investments with cash they have in their account. If you use a cash account rather than an E*TRADE margin account, the cost of margin is irrelevant.
Discount brokers aren't known for having large in-house research arms, which helps them keep costs low, but they don't leave investors in the dark, either. E*TRADE offers a number of research reports and tools, some of which are detailed in the list below.
Realistically, we've only scratched the surface here. To be sure, any of the household name discount brokers have an incredible amount of research and screening tools. If you wanted to read up on stocks or tinker with screeners all day every day, you would find plenty to keep you busy -- we have no doubt about that.
Keeping it simple, we think an E*TRADE account may be worthy of additional investigation if one or both of the following statements apply to you.
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