Ally Invest versus Etrade brokerage firms comparison: IRA, fees, commissions, stocks/funds offerings, differences, pros and cons. Which broker to choose?

Overview

With updated ultra-low commission schedules, E*Trade and Ally Invest offer great values in brokerage services. So which one do we recommend? Let’s look at some details and then we’ll give you an answer.

Category #1: Pricing

Etrade Review
Rating Ally Invest rating Etrade brokerage firm rating
Stocks, ETFs $0 $0
Options (per contract) $0.50 $0.65
Mutual Funds $9.95 $19.95
Initial Funding Requirement $0 $0
Inactivity Fee $0 $0
IRA Annual Fee $0 $0
IRA Termination Fee $25 $0
Outgoing Wire Fees (Domestic)$30$25
Full Account Transfer Out$50$75
Partial Account Transfer Out$10.00 per security, $50 maximum$25
Open an account Up to $3,500 cash bonus + $0 trades + transfer fee rebate. No commissions on stocks and ETFs.


As you see from the table above, Ally Invest is better priced than E*Trade.


Category #2: Tradable Securities

Ally Invest customers can buy and sell ETFs, mutual funds, closed-end funds, stocks, options, bonds, penny stocks (at an additional cost), and over-the-counter equities. A separate account can be opened to trade currencies.

At E*Trade, investors get the same lineup, except that OTC stocks carry surcharges instead of penny stocks, and forex is replaced by futures trading.

Looks like a tie in the second category.


Category #3: Mobile Trading

Ally Invest’s app is integrated with Ally Bank’s. It’s just one app with one login. Brokerage accounts are displayed alongside deposit accounts.


Ally vs Etrade


On the brokerage side, we found a trade ticket capable of submitting orders for stocks, ETFs, closed-end funds, and options. Unfortunately, mutual funds cannot be traded on the app. A second app is a dedicated forex platform. On the main app, there is mobile check deposit, Zelle transfers, bill pay, and a customer service contact.

During our testing of E*Trade’s platform, we found a lot of the same features: mobile check deposit, bill pay, and funds transfer. There is no Zelle transfer tool, however. On one of the apps (there are a total of two) we found live streaming of Bloomberg news, a service not found on either Ally app. Mutual funds can be traded on one app, while the other platform has an advanced order ticket with multiple order types.


Etrade vs Ally Invest


E*Trade is the outperformer here.


Category #4: Websites

As with its mobile platform, Ally has one login on its website for both brokerage and banking customers. The brokerage side of things is intuitive and easy to understand. We did find a trade bar at the bottom of the site. Not only does it provide real-time data, it also has a pop-up trade ticket to submit orders for stocks and ETFs. Option orders can be submitted directly on the bar. Stop and market-on-close orders are available for equities.


Ally or Etrade


Ally Invest LIVE is the broker’s browser platform. It provides bond trading, full-screen charting, and several widgets that can perform a variety of functions, such as transfer funds or show order status. The platform’s trade ticket offers trailing order types (not available on the regular website), and just 2 duration choices (day and GTC).


Ally or Etrade


E*Trade’s website doesn’t have a trade bar, but its order form nevertheless is easy to use. It incorporates a calculator that can convert a dollar figure into a share amount. Extended-hour trading is available as well.


Etrade or Ally


Power E*Trade is the company’s browser platform. It has an order ticket that provides many more choices than LIVE offers. For example, Power has OCO stop limit, 3 leg bracket stop, quote trigger, and hidden orders. Duration choices include GTD—good until a certain date.


Etrade vs Ally Invest


Also on Power are profit-loss diagrams for every trade entered. Full-screen charting includes left-click trading, something Ally doesn’t offer.

Another loss for Ally Invest.


Category #5: Desktop Trading

Ally Invest customers have two desktop platforms to choose from for currency trading: MetaTrader 4 and Ally’s own program. Both offer forex trading only. Dealing boxes, charting with technical indicators, and trade automation are some of the available features.

E*Trade Pro is E*Trade’s desktop software. It has the ability to trade both futures and securities. Level II quotes and direct-access routing are on tap, and we were impressed with the software’s advanced charting. Bloomberg news is an added plus.

The ability to use E*Trade’s platform for securities trading gives it the nod here.


Category #6: Mutual Funds

Mutual fund profiles at both brokerage firms provide a reasonable amount of information. E*Trade uses ratings from Morningstar, while Ally uses Lipper. E*Trade customers get fund report cards in pdf format, something that’s missing at Ally.

With E*Trade’s screener, we counted roughly 8,600 mutual funds that were available for new investments. Ally Invest’s number is around 11,400. Ally charges $9.95 for every transaction of a no-load fund. E*Trade does not have such a policy. It offers 4,400 funds that have neither load nor transaction fee.

Overall, it’s pretty close in category #5.


Category #7: Education & Research

On Ally Invest’s site, we found on-line events for trading ideas, options analysis, and more. There are articles and videos on a small number of topics. These include “What’s the Difference Between Options and Stocks?” and “How to Build an ETF Portfolio.” Stock profiles on the Ally Invest site have a moderate amount of data. CFRA is the only analyst to offer stock reports.

At E*Trade, we found 10 analysts with downloadable reports. Profile pages have more information than Ally offers. For example, there is blogger sentiment scores and technical research. E*Trade has an education section on its site with articles and videos.

We like E*Trade better here.


Category #8: Other Services

Traders who prefer to reinvest cash dividends as additional equity shares can sign up for a DRIP plan at either Ally Invest or E*Trade. Neither firm charges anything for the service.

IRAs are also on tap at both locations. E*Trade offers more types, including a Complete IRA that comes with checkwriting and a debit card. Moreover, E*Trade offers a solo 401(k), something Ally doesn’t have.

Ally Invest clients can sign up for recurring deposits of cash into a brokerage account (not into mutual funds); while E*Trade customers can do both.

Ally's parent company, Ally Financial, offers online bank accounts with some of the best rates in the industry. These accounts can be easily linked to the brokerage account.

Last category is a tie.


Our Recommendations

Beginners: Either broker will work great.

Mutual Fund Traders: If you’re interested in no-load, no-transaction-fee funds, go with E*Trade. Otherwise, Ally Invest is better priced and offers more popular funds.

Retirement Savers and Long-Term Investors: Toss-up.

ETF and Stock Trading: If you are an active trader we suggest E*Trade for its software. Otherwise, Ally Invest is a better choice.


Promotions

Ally Invest: Up to $3,500 cash bonus + $0 trades + transfer fee rebate.

E*Trade: No commissions on stocks and ETFs.



Ally Invest vs Etrade: Results

With victories in more categories, E*Trade is the overall winner of this competition. Despite the outcome, Ally Invest would be a good broker for fund investors, currency trading, and low-cost managed account services.



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