Etrade Rating: 
- Stocks & ETFs: $0
- Options: $0 + $0.65 per contract
- Mutual Funds: $19.99
Overview of E*Trade
E*Trade is known for its funny commercials. But whether the brokerage firm actually provides good investment services at reasonable cost is a completely different issue. This article will go beyond the fluff and find out if E*Trade actually delivers where it counts.
Investment Offerings
E*Trade clients can buy and sell options, stocks (including penny and over-the-counter stocks), IPO’s, fixed-income assets (including securities such as brokered CD’s, agency bonds, Treasuries, munis, and asset-backed debt), futures (including bitcoin futures and options on futures), ETF’s, closed-end funds, and mutual funds. Absent from this lengthy list are global securities, warrants, contracts for difference, precious metals, and forex.
Customer Support
E*Trade has representatives on the phone around the clock, day and night, 365 days a year. Besides this great service, the broker provides some hours of Chinese-language support. Multiple phone numbers are available for customers who are outside North America. It may be easier for such clients to use the broker’s online chat function, which is up and running 24/7. During our multiple tests, we had good luck with it.
On E*Trade’s website, we found many helpful self-service functions. For example, there are links to sign up for DRIP service, upgrade to options trading, request an IRA distribution, change login credentials, upload a document, and more.
Traders who want to skip all these channels can find in-person service at one of E*Trade’s thirty brick-and-mortar locations. Unfortunately, more than half are located in just four states (California, Texas, Florida, and New York).
Learning Materials
E*Trade customers who are beginners or otherwise need to brush up on some topics will find lots of resources on the company’s website. Bloomberg Business News streams from the site at no charge. During our investigation, we also found a virtual learning center (click on ‘Knowledge’ under the ‘Research’ tab). It contains many articles and videos on a wide variety of topics. A few examples are monthly sector rotation, technical analysis, how to trade option contracts, and the basics of dividends.
As for security research, there are screeners for stocks, bonds, ETF’s, and mutual funds. The broker’s equity screener is able to look for many criteria, including price performance v. industry, beta, sector, market cap, analyst ratings, PEG ratio, and more. Another great highlight is free stock recommendations from TipRanks.
Financial Advice & Portfolio Management
E*Trade doesn’t stop at self-directed accounts. The company has a selection of digital and human advisors who are very capable of managing investment accounts for customers who don’t have the time or ability.
E*Trade’s robo advisor costs a very low 30 basis points per year and requires a minimum investment of $500. The computer algorithm trades low-cost ETF’s and charges zero commissions.
Investors who aren’t comfortable turning over their life savings to a software program can instead enroll in one of E*Trade’s old-school programs. These services charge more (up to 1.25%) and require higher minimums (between $25,000 and $150,000, depending on the package). But they deliver what the robot cannot: stocks, bonds, and a one-on-one working relationship with a human advisor.
Fees and Commissions
Stock and ETF transactions at E*Trade cost $0. Option contracts are an additional 65¢. Futures and options
on futures are $1.50 per contract per side. Bitcoin futures are an extra $1. Treasury bonds have no commission
but may have a markup or markdown embedded in the price. Other fixed-income transactions cost $1 per instrument
with a $10 minimum and $250 maximum.
For equity and option transactions, E*Trade does offer discounts for high-volume accounts. Options cost just
50¢. The minimum trading level is 10 trades per month.
The above rates assume online trades. Placing a trade over the phone with a live broker tacks on an additional $25 for stock and derivative trades, and $20 for bond trades.
Taxable and nontaxable brokerage accounts carry zero minimums. There is no fee to open an account, maintain one, or close one.
Website Trading
We were quite impressed with E*Trade’s website. It hosts a wide variety of functions. Charting is available in wide-screen mode. We found linear and logarithmic scales, company events like earnings and splits, technical indicators, and no less than 4 decades of price history.
The site’s order ticket delivers several order types (trailing, stop, and limit are some of the choices), seven duration options (extended hours, immediate or cancel, and good for 2 months are examples), and a handy conversion calculator to translate a dollar amount into number of shares.
Although E*Trade doesn’t provide a trade bar on its site, it does supply a very good browser platform called Power E*Trade. The software has no account minimums or trading requirements. During our testing, we found a very advanced order ticket with OCO, 3-leg bracket, hidden, and reserve order types. Duration choices include on-the-open and on-the-close. Charting comes with about 120 technical indicators.
Mobile Trading
E*Trade investors can use two mobile apps. The first is a Power app that is based on the company’s browser platform. It is designed for equity, futures, and options trading. Charting comes with 10 technical indicators, 4 graph styles, and extended hours prices. One thing we didn’t like was the lack of horizontal mode.
For actual trading, the order form offers multiple legs, several price types, and multiple duration options. As with the browser system, Level II quotes and time & sales data are provided, but direct-access routing is missing. Option chains can be used for calls and puts; and the app incorporates several multi-leg strategies as well.
With the second app, we find mobile check deposit, bill pay, horizontal charting, mutual fund trading, conditional orders, and Bloomberg TV. Other highlights include a watchlist, alerts, and a dashboard with streaming quotes.
Other Tools
E*Trade has a smartwatch platform that is compatible with Apple devices. It can display index data, alerts, and the day’s return of
an account’s portfolio.
Another piece of software E*Trade offers is a desktop platform. Named E*Trade Pro, this one comes with the same active trader
requirement that the reduced commission schedule carries: 30 trades per quarter.
Although this requirement isn’t pleasant, the software does deliver some very nice tools. Unlike the Power platform, Pro has
direct-access routing, something advanced traders will want. The desktop system also has multiple watchlists, advanced charting with
drawing tools and technical indicators, time & sales data, option tools, and alerts.
In this category, we hoped to see a skill for Amazon Echo, but didn’t find one. Also missing is an app for Apple TV.
Mutual Funds
With E*Trade’s mutual fund screener, we found 8,936 securities that were available for new investments. Roughly half of these have no load and no transaction fee. The screener is easy to use and delivers many search variables, such as distribution yield, fund category, and NAV history.
A really beneficial service E*Trade customers get in this category is free access to All-Star Funds. This is a list of mutual funds screened by investment pros at the broker. The funds have no load and have shown an outperformance against their peers for at least three years.
Mutual fund profile pages on E*Trade’s site display many useful features. We found Morningstar ratings, information on fees and charges, and portfolio composition details. There is a small chart of the growth of $10,000 (this can be expanded into an NAV history chart), a list of top holdings, and links to a fund’s prospectus and fund report.
E*Trade charges $19.99 for each transaction of a non-NTF fund. Funds that have no transaction fee must be held for at least 90 days; otherwise, there is an early redemption fee of $49.99.
The broker’s mutual fund trade ticket has a radio button that allows dividends and capital gains (both, but not either/or) to be reinvested in the fund or deposited into the account’s core cash position.
ETF's
Moving to exchange-traded funds, the broker performs exceptionally again. E*Trade customers have access to 304 commission-free ETF’s. Some of the fund families on this list include WisdomTree, Global X, and Vanguard. These funds must be held at least 30 days; otherwise, E*Trade charges a short-term trade fee of $19.99 ($15.99 for active traders).
As with mutual funds, there is an All Star List of ETF’s. Currently, there are 92 of them. Some of the fund families include SPDR, iShares, and Invesco. Expense ratios can be as low as 3 basis points. Selection of these funds is slightly different than for mutual funds. E*Trade only chooses passively-managed funds that represent a specific asset class or market segment.
The broker’s ETF screener is just as thorough as its mutual fund tool. Available search criteria include leveraged status, fund category, investment objective, and many others.
ETF profile pages have important trading data posted on them. We found ex-dividend date, option chains, dividend yield, total assets, return history, a free Morningstar report for some funds, another report from E*Trade, and tax analysis of a fund.
Some ETF’s at E*Trade are eligible for 24-hour trading, 5 days a week. These include SPY, the major S&P 500 fund, and GLD, the SPDR gold fund.
Education and Retirement Accounts
Besides regular investment accounts, E*Trade provides several retirement and education accounts. A Coverdell Education Savings Account carries no account minimum and has no annual fee. Custodial accounts are available for customers who don’t have any education expenses to save for.
A large selection of IRA’s are available, and these nontaxable accounts have no annual fees. There are a few $25 charges for activities like recharacterizations and early withdrawals. Closing an IRA is free of charge.
For E*Trade’s self-employed customers, there is an individual 401(k) plan. Other business accounts include a profit-sharing plan, a SEP IRA, and a SIMPLE account.
Although we looked, we didn’t find a 529 plan.
Banking Tools
Besides its brokerage business, E*Trade runs an FDIC-insured bank that provides checking and savings accounts. The savings account pays 2.1% interest. There is no monthly fee with a $1,000 balance. Other methods are available to avoid the fee.
There are two checking accounts. The premium account requires $100 to open, comes with a free debit card, and delivers unlimited ATM fee rebates nationwide. The account does charge $15 per month unless one of several account requirements is met.
Missing in this category is global ATM fee refunds. Although the second checking account doesn’t have a monthly fee, it also does not provide any ATM refunds.
Comparison
Although E*Trade’s list of commission-free ETF’s used to be quite large by industry standards, it is now dwarfed by
Firstrade and
M1 Finance.
With a $0 equity commission,
TD Ameritrade
is perhaps E*Trade’s closest and highest rated rival. It does have a better desktop platform than E*Trade has.
Furthermore, TD Ameritrade’s software does not carry any account minimums.
E*Trade’s list of mutual funds is rather small at just over 8,900. We found larger lists at USAA and WellsTrade. E*Trade’s selection
of no-load, no-transaction-fee funds is larger than industry average, though.
Recommendations
With its active-trader discounts and desktop platform, E*Trade would be a good choice for frequent option, stock, ETF, and futures
traders. With bitcoin futures and options on futures, E*Trade offers what many other brokers don’t.
With its customer service and learning materials, the broker is also a
good choice for beginners.
Mutual fund investors and small accounts can do well here as well. For
retirement saving, we suggest
Ally Invest or
Firstrade due to E*Trade’s IRA fees.
E*Trade Review Summary
E*Trade clearly has more than just humorous commercials. The brokerage firm excels in most categories. While it underperforms in pricing, active traders get a competitive rate.
Etrade Trading Commissions
| Investments | Price |
|---|
| Stocks and ETFs | $0 |
| Stocks and ETFs broker assisted | add $25 |
| Options | $0 + $0.65 per contract (0-30 trades/quarter) or $0 + $0.50 (30+ trades/quarter) |
| Mutual funds | $19.99 |
| Futures contracts | $1.50 per contract, per side + fees |
| Fixed Income | markup or markdown and any transaction fee will be included in the price quoted |
| Bonds | $1 per bond (minimum $10, maximum $250) for online secondary market trades. Includes Agency bonds, Corporate bonds, Municipal bonds, Brokered CDs, Pass-thrus, CMOs, Asset Backed Securities. |
Etrade IRA and Account Fees
| Fee | Amount |
|---|
| IRA Setup Fee | $0 |
| Annual IRA Fee | $0 |
| IRA Closing Fee | $50 |
| Full Account Transfer Out | $60 |
| Partial Account Transfer Out | $25 |
| Outgoing Wire Fees (Domestic) | $25 |
| Outgoing Wire Fees (International) | $25 |