Fidelity or Etrade: brokerage firm comparison: fees, commissions, benefits, good and bad. Which brokerage to choose.

Fidelity Investments Review Etrade Review
Rating 4-star brokerage firm rating Etrade brokerage firm rating
Stocks $4.95 $6.95
Options (per contract) $0.65 $0.75
Mutual Funds $49.95 $19.99
Initial Funding Requirement $2,500 $500
Inactivity Fee $0 $0
IRA Annual Fee $0, $25 for SIMPLE IRAs $0
IRA Termination Fee $50 $0
IRA Premature Distributions $0 $25
Trading Experience & Technology brokerage ratings brokerage ratings
Mobile brokerage ratings brokerage ratings
Research Amenities brokerage ratings brokerage ratings
Portfolio & Analysis Reports brokerage ratings brokerage ratings
Customer Service and Education brokerage ratings brokerage ratings
Good
  • No inactivity, no account fees
  • Low trading commissons
  • 90 commission-free ETFs
  • Wide selection of investments
  • Free Dividend Reinvestment Plans (DRIPs)
  • Access to international markers 25 countries, 16 currencies
  • Great in-depth research amenities including third party sources
  • Banking products and services
  • Over 185 local branches around the country
  • Great customer services, good education resources
  • No inactivity or maintenance fees
  • No-fee IRA accounts
  • Wide variety of investing options
  • Good 24/7 customer service
  • Banking products and services
  • Over 100 commission-free ETFs
  • Selection of no transaction fee mutual funds
  • Advance platform for active traders at no charge
  • Streaming charts, Level II quotes
  • Access to international markets
  • In-person guidance at around 30 local branches around the country
Bad
  • 36+ trades per year are required to recieve an acces to Fidelity's advanced trading platform
  • High commissions for purchasing non-Fidelity mutual funds
  • $2,000 minimum mutual funds purchase price
  • Mutual funds low balance fee. $12 per year for each noncore Fidelity fund under $2,000
  • Very high trading commissions
  • Advanced trading platform is available for free to an investors who execute 30 stocks or options per calendar quarter

 

Compare Fidelity Investments vs. Etrade Brokerages

Fidelity and Etrade are well-known reputable investment companies. Brokerage firms offer a wide variety of investment products, high reliance of traditional and discount brokers, and quality customer support. Let us take a closer look at brokers' commissions, fees and trading tools.

At first glance, it is not difficult to see that brokers' trading commissions are pretty high. In terms of stocks and ETFs, Fidelity charges $4.95, but Etrade charges even more at $6.95. For instance, Scottrade and TD Ameritrade, firms' two strongest rivals, charge $6.95 per trade on stocks and ETFs, respectively.

Today very few brokers provide commission-free ETFs. The good news is that Etrade and Fidelity are among those brokers. Fidelity Investments offers 84 commission-free ETFs, whereas Etrade has over 100 ETFs with no trading fees. However, companies' selections of commissions-free ETFs are very limited compared with TD Ameritrade's. TD Ameritrade's selection of over 100 commission-free ETFs, which is independently picked by Morningstar's experts, was ranked as the best in class in 2015 by Forbes.

Fidelity is well-known for its free of charge high-performance family funds. Firm's cost for buying other funds is pretty high. It can go from $49.95 to even $75 for some funds! Etrade charges only $19.99 on mutual funds. Let us take a quick look at the numbers of mutual funds offered through each firm, and we'll see a big difference. Over 12,000 mutual funds are available via Fidelity, and only 8,000 funds are available via Etrade.

Both Fidelity and Etrade charge pretty high commissions. However, when it comes to account fees, we can also see some fees that other leading investment companies do not have. For example, Fidelity has a low balance fee. It charges $12 annually for each non-core Fidelity fund under $2,000. The firm also has an annual fee of $25 for SIMPLE IRAs (IRA closure fee is $50, excluding SIMPLE IRAs) and Fidelity Retirement Plan (Keogh) Accounts. There is a $10 fee per online wire transaction and a $15 fee per wire transaction via form or representative. Fidelity discloses all fees and commissions in a PDF file accessible via the official Fidelity website.

Etrade has a high $60 fee for full account transfer, which drops to $25 for partial account transfer. There is also a $25 IRA premature distribution fee. If you are looking for an IRA account with no fees, visit our list of the best brokerage IRA accounts.

Both companies have above zero minimum funding level to open a brokerage account. It is $500 for Etrade and $2,500 for Fidelity. If you would like to try brokers' trading and research tools with no risk, you can check out brokers with no minimum deposit to open an account. IRAs for Fidelity and Etrade can be opened with as low as $0.

Etrade and Fidelity provide their advanced trading platforms free of charge to active traders, otherwise investors can get access to platforms for steep monthly fees or use firms' web-based platforms. Thinkorswim, the best-rated trading platform by TD Ameritrade, as well as two other broker's platforms are free to use regardless of clients' trading activity level or their assets.

Fidelity Investments offers free dividend reinvestment program, excellent education amenities and great research. Banking services such as checking and savings accounts, credit cards and other options are available through Fidelity at this time.

Etrade provides powerful trading tools, excellent customer support, a wide selection of investments as well as basic cash management features, which are offered via Etrade bank.

Fidelity Investments (review) and Etrade (review) are two large and well-established brokerage firms. They offer a variety of services that some smaller companies do not offer. Yet, Etrade's pricing is pretty expensive. There are less expensive brokerages for investors of any type nowadays. A cheaper firm does not always mean the worst. Large solid companies like TD Ameritrade or TradeKing have high customer satisfaction and lower trading cost.

 

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