E*TRADE Review 2022Stocks
- Basics: E*TRADE is an online brokerage with 40 years of experience behind them. Investors can trade stocks, options, ETFs, futures and more on E*TRADE's desktop and mobile platforms.
- Pros: E*TRADE offers the ability to execute more advanced investment strategies than some other popular investing platforms.
- Cons: E*TRADE’s margin rates and fees for OTC trades are much higher than the industry standard.
- MINIMUM INVESTMENT:
No account minimums
$0 for stock/ETF/mutual fund trades, see below for pricing on other securities
- SIGN-UP BONUS:
Up to $3,500
- FRACTIONAL SHARES:
We may receive a commission if you sign up or purchase through links on this page. Here's more information.
If you’re interested in learning more about E*TRADE and everything they offer, you’ve come to the right place.
This online brokerage sets themselves apart with extensive research tools. But is all of this data overwhelming for beginning investors?
In our E*TRADE review, you’ll find out the answer to this and many more questions.
What Is E*TRADE?
E*TRADE is an online stock brokerage that has been around since the 1980s.
They were pioneers in the internet trading industry and continue to be a major player to this day.
Today they remain a great brokerage for investors who are looking for a little bit more functionality than the typical app-based broker, such as Robinhood.
E*TRADE At a Glance
|Management Fees||As low as 0.30% for Core Portfolio Accounts|
|Trading Commissions||$0 per trade for stocks, mutual funds, and ETFs|
|Account Types||Brokerage accounts, IRA’s, and traditional bank accounts|
|Funding Options||ACH transfer, wire transfer, mailed check, brokerage account transfer|
|Human Advisor Option||Yes|
|Robo-Advising||Yes, with E*TRADE Core Portfolios|
|Automatic Rebalancing||Yes — rebalancing is done semiannually with Core Portfolios|
|Account Transfer Bonus||Yes|
|Customer Support||24/7 phone service, online messaging, mail, in-branch|
How Does E*TRADE Work?
E*TRADE works much like the other top online stock brokerages.
Buying and selling take place on one central page — further down in this article we’ll walk you through exactly how to buy a stock using E*TRADE.
Aside from the run-of-the-mill buying and selling of securities, E*TRADE has some unique features to help investors grow their portfolios.
Fully Paid Lending Program
One of the things that we really like about E*TRADE is that they offer a share lending program that they call their “Fully Paid Lending Program”.
With this program, E*TRADE allows users to lend out their shares and receive interest in return.
Why would you lend your shares out?
Because you can make additional money on shares that are just sitting in your account.
The concept of short selling is based upon the ability to borrow shares.
When someone sells a stock short, they borrow shares from a shareholder, sell them, and then buy the shares back at a later date (ideally at a lower price) to then give back to the shareholder.
If you open a short position on a stock, you’ll be charged interest on the shares that you borrow.
As part of E*TRADE’s program, the company shares the interest they receive from short sellers with you.
One thing that many seasoned day traders and technical traders love is a terminal-style application where they can place their trades.
This is a fairly uncommon feature among no-fee brokers, but E*TRADE has it.
Power E*TRADE allows customers to draw lines on stock charts for technical analysis (these allow technical traders to identify important stock behavior), as well as quickly access important information around a stock, such as risk/reward probabilities, earnings volatility, and more.
It also provides users with more than 145 chart studies and drawing tools as well as the ability to save all of their work to a specific chart.
On top of all that, users can access Power E*TRADE from the E*TRADE mobile app, so they can trade on the go.
When using E*TRADE’s platform, you can tell that they’ve been polishing their user interface over the course of decades.
One problem with serving up lots of information to their customers is that all of that information can be very hard to display.
E*TRADE manages and consolidates data in a user-friendly way.
This is important, because at the end of the day if you can’t find the data you’re looking for, the platform isn’t really doing anything to help you out.
E*TRADE provides its clients with research tools that are really quite remarkable. They have countless analyzers, screeners, and calculators that seasoned technical investors love.
E*TRADE also offers a vast amount of information on individual securities, such as financials, analyst ratings, price targets, and more.
When it comes to their news section though, we’ve found that it’s a bit lackluster.
When looking for general market news on E*TRADE, they seem to be an aggregator of a couple of online media outlets.
While this is better than nothing, you may get a biased view of an investment if you aren’t learning about it from a diverse pool of sources.
E*TRADE offers several avenues for clients to seek customer service.
Clients can reach a customer service representative over the phone, in person at a branch, or even through the mail if they desire.
In order to assess E*TRADE’s customer service, we reached out with a few questions over the phone.
A friendly representative answered the questions we had within less than 10 minutes.
E*TRADE Fees and Pricing
E*TRADE does not charge any recurring monthly fees.
Instead, their fees are charged on a percentage basis, or a per-trade basis. This table breaks down all of the fees that E*TRADE charges.
|Stocks, ETFs, and No Transaction Fee Mutual Funds||$0|
|Over the Counter (OTC) Stocks||$6.95/Trade|
|Options Contracts||$0.50-$0.65 per contract|
|Mutual Funds That Charge a Transaction Fee||$19.99|
|Bonds||$1 per bond|
|Futures||$1.50 + fees per contract ($2.50 + fees for cryptocurrency futures)|
|Management Fees||Core: 0.30%; Blend: 0.65%-0.90%; Fixed Income: 0.35%-0.75%|
|Outgoing Account Transfers (Partial/Full)||$25/$75|
E*TRADE’s fees are fairly reasonable, with the exception of the high charges for over-the-counter stock (OTC) trades and margin loans.
Most brokerages that offer OTC stocks allow users to trade them for free, just like any other stock, so it’s quite unusual that E*TRADE charges $6.95 per trade.
Additionally, their margin rates are very high.
Competing brokerages such as Robinhood and Interactive Brokers charge less than 2% for margin loans, a fraction of what E*TRADE charges.
E*TRADE offers a wide variety of accounts for investors to choose from.
They have just about everything an individual investor could need.
The traditional brokerage account is one of the most commonly used investment accounts.
It allows investors to invest in their favorite securities — we’ll discuss which ones E*TRADE supports in a section below.
Apart from the barebones brokerage account, E*TRADE also offers several specialized brokerage accounts.
One of these options is a Coverdell ESA account.
This account is intended for funding a child’s school tuition, as withdrawals for qualified educational expenses are tax-free.
E*TRADE also offers custodial accounts, which allow minors to have a brokerage account managed by their parent or other designated custodian until they turn 18.
When it comes to retirement accounts, E*TRADE has quite a variety.
Their offerings include the industry standards, such as the Rollover, Roth, and Traditional IRAs.
They also offer Beneficiary IRAs for those who inherit a loved one’s retirement account, as well as IRAs for minors.
Small Business Retirement Accounts
In addition to retirement accounts for yourself and your loved ones, E*TRADE also offers customers the ability to provide retirement benefits to their employees.
E*TRADE offers both Individual and Roth 401(k) plans, SIMPLE IRAs, and profit-sharing plans for employees.
Additionally, for those who are self-employed or run a small business, E*TRADE can also provide SEP IRAs.
For those who are looking to take a truly hands-off approach to investing, E*TRADE has several managed portfolio offerings.
|Portfolio||Minimum Investment||Advisory Fees (%)|
|Fixed Income Portfolio||$250,000||0.35|
Their Core Portfolio is an automated solution with a $500 minimum investment as well as a 0.30% APR fee.
Their Blend Portfolio is a portfolio managed by a financial consultant. It comes with a $25,000 minimum investment, and an advisory fee as low as 0.65% APR.
Lastly, E*TRADE’s Fixed Income Portfolio allows customers to work with a financial consultant to create a portfolio of bonds that consistently pay out a fixed income.
This managed portfolio requires a $250,000 minimum investment and comes with advisory fees as low as 0.35% APR.
Bank Accounts/Cash Management
E*TRADE has partnered with their parent bank, Morgan Stanley, to provide an in-house solution for customers’ banking needs.
E*TRADE offers both checking and savings accounts that are FDIC-insured.
They also can provide customers with lines of credit for those who need access to cash fast and don’t want to sell off any of their investments.
E*TRADE Investment Options
When it comes to investment options, E*TRADE finds itself somewhere in the middle of the spectrum.
They offer more diverse investment options than many of the brokerages that are popular with retail investors, but more seasoned investors might not find what they’re looking for.
E*TRADE allows users to invest in just about every company listed on a U.S. stock exchange.
Unfortunately, if you’re looking to invest in any international markets, you can’t do so with E*TRADE unless the business you want to invest in has a secondary listing on a U.S. market.
Options and Warrants
E*TRADE allows customers to trade both options and warrants.
While options are fairly widely supported security among brokers, warrants are not.
So it’s nice to see that E*TRADE gives customers the ability to trade them.
Futures allow investors to lock in a price for a security they’d like to buy or sell in the future.
E*TRADE allows customers to buy and sell futures 24 hours per day, six days per week.
With E*TRADE you can trade futures for equities, energy, interest rates, metals, grains, commodities, livestock, currency, and cryptocurrency.
Exchange-traded funds, otherwise known as ETFs, create a basket of companies that investor dollars are allocated to, and are generally seen as a very easy, risk-averse approach to investing.
With E*TRADE, investors can invest in countless ETFs — some of which are available to buy 24 hours per day, from Sunday to Friday.
E*TRADE claims that this allows investors to react to after-hours market events and overnight news.
Mutual funds are very similar to ETFs in the fact that they take investors’ money and spread it out across a basket of companies.
However, mutual funds differ in that they typically have a minimum deposit amount and higher expense ratios than ETFs.
E*TRADE has thousands of mutual funds for customers to invest in, with over 4,000 no-load, no-transaction fee funds.
Bonds and CDs
Bonds and CDs are less volatile than most other securities and can help investors create a predictable source of interest income.
E*TRADE provides investors with a wide variety of bond and CD offerings.
They have access to over 50,000 bond offerings from more than 200 of the leading liquidity providers.
E*TRADE does not allow you to invest directly into cryptocurrencies on its platform.
You can, however, invest in stocks and ETFs that hold large sums of cryptocurrency, as well as futures based on different cryptocurrencies.
Fractional shares are portions of an individual stock sold at a much lower price than a single stock would trade for.
A share of a company like Google will run an investor thousands of dollars. But with the ability to purchase fractional shares, investors can buy just a couple of dollars worth of Google stock.
Unfortunately, E*TRADE only offers fractional shares for investors that enroll in dividend reinvestment.
This puts E*TRADE at a disadvantage to the competition.
Both Robinhood and Interactive Brokers allow the purchase of fractional shares.
Bonuses and Promotions
E*TRADE offers a generous sign-up/account transfer bonus, as well as a referral program for its customers.
E*TRADE Sign-Up Bonus
To encourage customers to move their existing assets to a newly-opened account, many brokerages will offer sign-up bonuses. Most brokerages like E*TRADE change their sign up bonuses several times per year, but at the time this article was written, E*TRADE offered bonuses up to $3,500.
|Sign Up Bonus||Required Deposit|
E*TRADE Referral Bonus
E*TRADE offers its customers a $50 Amazon gift card for each successful referral (capped at $500/year).
The referred party must open a new account and fund it with at least $500.
Is E*TRADE Safe?
Having concern about your money’s security is very reasonable, however, the financial industry is heavily scrutinized and regulated by the SEC.
Governmental entities require brokerages like E*TRADE to have the highest security standards.
This means that your money is safe with them — as long as you invest it safely.
As mentioned above, the financial industry is very heavily regulated and safeguarded by the SEC in the U.S.
As a result of this, most brokers have both FDIC and SIPC insurance, and E*TRADE is no exception.
FDIC insurance covers between $250,000 and $1,000,000 in cash depending on the type of account your money is being held in.
Additionally, SIPC insurance protects up to $500,000 in securities held with E*TRADE.
In addition to the typical insurances that come along with bank/brokerage accounts, E*TRADE has its own suite of security measures that customers can use to protect their personal information and money.
Much like most banks and brokerages out there, E*TRADE has all users set up three security questions when they create their account, but the brokerage’s security measures don’t stop there.
E*TRADE also allows users to set up two-factor authentication to ensure that their privacy is protected.
Since E*TRADE is an online brokerage, there are cybersecurity risks that go along with using it.
And, just like with any brokerage account, you assume risk of varying degrees depending on the investments that you make.
Beginning investors should be careful to verify that they are making the correct purchase.
Since E*TRADE offers securities like options, warrants, and futures, an inexperienced investor could accidentally purchase the wrong financial instrument fairly easily.
This is especially true with warrants, as they have tickers that are very similar to the underlying security.
E*TRADE Pros and Cons
E*TRADE is an excellent platform for the intermediate investor.
Below we’ve outlined some of our favorite (and least favorite) things about E*TRADE:
- More Investable Securities Than Most Brokers: E*TRADE allows customers to diversify their investments. They support traditional stocks, ETFs, mutual funds, and options contracts.
- Powerful Research Tools: E*TRADE provides exceptional data and visualization tools to help investors make informed choices.
- Easy-to-Use Interface: E*TRADE offers a very easy-to-use interface, which is uncommon among brokerages that offer more complex securities.
- High Margin Interest Rates: Those who are looking to borrow money through a margin account will be very disappointed, as E*TRADE’s margin rates are sky-high when compared to low-cost margin brokers like Interactive Brokers and Robinhood
- Lacks Higher Complexity Securities: Although E*TRADE allows users to trade more complex securities, like bonds and futures, they don’t support the trading of cryptocurrencies.
- Restricted to US Markets: E*TRADE does not support stock markets outside of the United States. This means that investors looking to make an investment in an international company have to purchase American Depository Receipts (ADR’s) when investing internationally. This can be a problem, as ADRs don’t exist for every international stock, and some can be very illiquid.
Alternatives to E*TRADE
How does E*TRADE compare to other online brokerages?
E*TRADE vs Robinhood
Robinhood is designed for beginning investors that might need certain concepts explained to them.
They have an easy-to-use, intuitive user interface that you don’t need any investing experience to understand.
E*TRADE is designed for the intermediate investor who might want more data on the companies that they invest in, or more capabilities from their brokerage.
|Geared towards intermediate investors.||Better for less inexperienced investors.|
|You’d like to employ more complex investment strategies, such as short-selling.||You only want to trade stocks and options.|
|You tend to stay away from margin.||You’d like to borrow money on margin at a competitive rate.|
|You’re okay with just buying bitcoin futures.||You’d like to purchase bitcoin and other cryptocurrencies.|
|You’d like a powerful suite of research tools.||You don’t do much stock research, and don’t require advanced tools.|
E*TRADE vs. Fidelity
E*TRADE and Fidelity are both legacy brokerages that have been in operation for several decades.
Both brokerages are trusted by countless clients and have very similar services.
For the vast majority of people deciding between Fidelity and E*TRADE, the decision is going to come down to personal preference.
In our opinion, the Fidelity user interface seems to be a bit more dated than E*TRADE’s, but both platforms offer very similar functionality.
|You’d like to trade futures and futures options.||You don’t need the ability to trade futures.|
|You aren’t looking to invest internationally.||You’d like to purchase stocks from international markets.|
|You’re looking to trade crypto futures.||You aren’t interested in any form of crypto trading.|
|You don’t trade OTC stocks very often.||You'd like to trade OTC stocks for free.|
|Forex trading isn’t part of your investing style.||You’d like the ability to trade Forex.|
E*TRADE vs Webull
Webull is one of the many up-and-coming fintech giants that have entered the stock brokerage space in recent years.
On the other hand, E*TRADE was one of the pioneers of the online brokerage industry.
While Webull is still developing and growing by the day, E*TRADE simply has more tools and information for investors to use.
With that being said, Webull is still a fairly good platform, especially for beginners.
|You trade OTC stocks.||You don't plan to trade OTC stocks.|
|Cryptocurrencies aren't a important part of your investment strategy.||You want to invest directly in cryptocurrencies.|
|Exceptional research tools are more important to you than a smooth user interface.||You want stock trading to be fast and efficient, and don't need advanced research.|
|You want a wide selection of mutual funds.||You don't plan to buy mutual funds.|
E*TRADE vs TD Ameritrade
TD Ameritrade, much like Fidelity and E*TRADE, is a giant in the financial industry.
They are another legacy broker that has withstood the test of time.
Again, when it comes down to making the decision between TD Ameritrade and E*TRADE, the deciding factor will likely be personal preference.
The options that both brokers offer are very similar.
However, there are some nuanced differences.
|Backtesting isn't part of your research strategy.||You'd like to backtest trading strategies using their thinkorswim platform.|
|You don't invest in international stocks.||You'd like the option to trade international stocks.|
|You don't trade Forex.||You want to option to trade Forex.|
|You plan to make large option or OTC trades.||You don't trade options or OTCs at high volumes.|
|You like to use stock screeners.||You want the ability to automate your trading based on a predefined set of conditions.|
Is E*TRADE Right for You?
Overall, E*TRADE is a great platform.
They have a large assortment of investable securities, as well as an easy-to-use user interface.
When you cap that off with good customer service and an ironclad reputation, E*TRADE is a solid option when it comes to brokerages — but they won’t be the perfect match for everyone.
Who E*TRADE Is Best For
E*TRADE is definitely geared more toward experienced investors who would like to broaden their investments past stocks, ETFs, mutual funds, and options.
E*TRADE’s website also has plenty of tools to help investors do their due diligence before making an investment, and keep up with any developments around certain companies.
E*TRADE is best for someone who is an experienced investor looking to use technical analysis to chart stock patterns.
The platform would also be great for someone to who picks individual stocks, since it provides a plethora of research tools and data.
Who E*TRADE Is Not For
E*TRADE is certainly not designed with the beginner investor in mind.
If you are just starting to invest in the stock market, you’ll will likely find E*TRADE’s interface confusing.
Even worse, you might find yourself accidentally buying something you don’t want, like an option instead of a share.
An example of someone who would not be a good match for E*TRADE’s platform is someone who would like to trade crypto or fractional shares.
Unfortunately at this time, E*TRADE does not offer the ability to trade either of these assets.
Another type of person that would have a hard time deriving value from E*TRADE’s offerings is an investor that only invests in ETFs or mutual funds.
If you only care about investing in these assets, there are plenty of brokers out there with more sleek user interfaces.
How to Sign Up For E*TRADE (Step-by-Step)
Signing up for an E*TRADE account only takes a few minutes.
Step 1: Select Your Desired Account Type
After inputting your personal information, you will have to decide what type of account you’d like to open up.
E*TRADE allows you to choose from a traditional brokerage account, individual retirement account, or custodial account.
Step 2: Enter Personal Information
Before trading, you will have to enter the typical personal information required by brokerages, such as name, date of birth, address, and social security number.
Step 3: Select the Securities You’d Like to Trade
Since E*TRADE offers the ability to trade more than just stocks, ETFs, mutual funds, and options, you’ll have to choose which securities you’d like to trade.
It’s important to remember that if you don’t know what specific security is, you likely shouldn’t be trading it.
Don’t worry though, if you learn about futures or bonds later on down the road, you can go back and request the ability to trade them.
Step 4: Make Any Necessary Disclosures
For the vast majority of us out there, we probably don’t have to worry about disclosing anything.
However, those who are close to executives of public companies, or financial leaders are required to disclose so.
(This is information you have to disclose no matter where you open a brokerage account.)
Step 5: Fund Your Account
This step is technically optional since they allow you to skip past this. But if you’d like to make any transfers into your account, E*TRADE gives you the option to do so at the time you establish the account.
However, you might want to explore the site to see if it’s a good fit for you prior to making a deposit.
If you decide to make a deposit, you can do so by electronic transfer (ACH), wire transfer, mailing a check, or by transferring securities from another brokerage.
Step 6: Place Your First Trade
After your account is approved and funded, it’s time to make your first trade! We’ll walk you through how to do so in the next section.
How to Buy Stock on E*TRADE (Step-by-Step)
Here’s how to put yourself in the game on E*TRADE with a stock purchase.
Step 1: Select the Asset Class You’d Like to Purchase
In order to select the asset class you’ll be purchasing, hover over the “Trading” tab, and select “Stocks/ETFs”.
Step 2: Select the Stock You’d Like to Purchase
Navigate to the “Symbol” field, and entering in the name of the company, or the ticker that it trades under.
After you enter a couple of letters, different tickers should start to appear in a dropdown menu.
Step 3: Enter the Parameters for Your Trade
Select the action you’d like to perform, the number of shares you’d like to purchase, as well as the price type and duration for the order.
Step 4: Preview Your Order
Once all of the necessary information has been entered, click on preview order, and review that everything has been input correctly.
Step 5: Submit the Order
After you’ve reviewed your order, and ensured that everything was correct, click submit.
Within a few moments, the order should execute, and you will receive confirmation of the transaction.
Overall, E*TRADE is a solid choice for intermediate investors or those who are looking to keep their investments fairly simple.
They have developed a platform that’s easy to use, with a suite of powerful research tools.
Where they could really improve though, is in the diversification of the assets they offer.
As emerging markets develop, the ability to invest internationally will be pivotal.
However, it’s hard to do so when E*TRADE limits your options for investing internationally.
We would also really love to see them become more competitive when it comes to margin rates.
Nowadays, there are plenty of brokers offering margin loans to customers for less than a 2.5% interest rate.
Charging sky-high rates for margin loans is a broken and antiquated way of doing business in the finance world.
Frequently Asked Questions
- Is E-Trade free?
E*TRADE is largely free to use — they don’t charge their customers monthly service fees, and stock, ETF, and mutual fund trades are free.
They do charge a nominal fee for trading options, bonds, and futures though.
- Does E-Trade have commission fees?
E*TRADE does not charge fees for trading stocks, ETFs, and mutual funds, which has become an industry standard.
Like most other brokerages, they do charge commission fees when trading options, bonds, and futures.
- When did E-Trade stop charging commission?
E*TRADE stopped charging its customers a commission on stock trades in 2019, bringing them in line with industry standards.
Prior to 2019, they charged $6.95 per trade.
- What is the E-Trade cash balance program?
The E*TRADE cash balance program allows users to keep their cash with E*TRADE, and in exchange, they pay users interest.
As of the time this article is being written, they are paying customers roughly 0.1% interest on cash held in E*TRADE accounts.
This is an easy, risk-free way for investors to generate a small yield on unused cash.
- Can E-Trade customers trade after hours?
Yes, after hours and premarket trading is available for E*TRADE customers, but they have to sign up for it before having access.
If you would like to trade in the after-hours or premarket, it’s incredibly important to remember that securities are much less liquid during these times.
This could result in increased price volatility.
- Is E-Trade good for beginners?
E*TRADE is probably not the greatest choice for those looking to start investing in the stock market.
It is targeted more towards sophisticated investors with years of experience.
E*TRADE offers customers the ability to make complex trade types, such as short selling, which new investors should typically avoid.
- Where is E-Trade headquarters?
Arlington, Virginia, is the site of E*TRADE's headquarters.
The company was founded in Palo Alto in 1982.
- Is E-Trade part of Morgan Stanley?
E*TRADE was purchased by Morgan Stanley in 2020.
Nothing important seems to have changed since the acquisition.
Business is still conducted under the E*TRADE name, and you can still create an account, and place trades on their website.
- How does E-Trade make money?
E*TRADE makes money in several ways — one of which is by charging customers interest on margin loans.
They also generate revenue by holding their customer’s cash in money market funds, and through payment for order flow.
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.