E*Trade versus Fidelity Investments - compare IRA, commissions, investing fees, trading tools, account pros and cons. Which online broker is better?

Overview of Fidelity and E*Trade

E*Trade has funnier commercials than Fidelity, but its investment services are seriously competitive. This article will examine how the two firms perform in important categories, and then make some recommendations for you.


Broker Fees

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Fidelity $4.95 $49.95 $4.95 + $0.65 per contract $0 $0
Etrade $6.95 $19.95 $6.95 + $0.75 per contract $0 $0


Services

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Fidelity
Etrade


Banking Tools

The biggest difference between the two brokerage houses in this category is that E*Trade operates an FDIC-insured bank, while Fidelity does not. So when E*Trade customers need cash management tools, they get a bank account. Specifically, the financial conglomerate offers two checking accounts and a savings account.

The checking accounts come with checks (obviously) plus a debit card. One checking account has a $15 monthly fee (it can be avoided by several methods) but provides unlimited ATM fee refunds. The other checking account has no fees but offers no ATM fee reimbursements. The savings account currently pays an interest rate of 2.10%, but carries an avoidable $10 monthly fee.

Although Fidelity doesn’t operate a bank, it does sweep uninvested cash into program banks that offer FDIC insurance. It uses up to five per customer, which produces a very nice $1,250,000 level of protection not available at E*Trade.

Checks and a Visa debit card at Fidelity can be attached to a regular brokerage account or to a specialized Cash Management Account. In the CMA, ATM fees are reimbursed and there is no monthly limit.

E*Trade used to have a really nice credit card but has retired it. Fidelity offers a great Visa Signature credit card with cash back. It can easily be linked to a Fidelity brokerage account.


Range of Financial Products

Besides humorous TV commercials, E*Trade offers stocks, bonds, options, ETF’s, mutual funds, and futures. In the past, it offered currency trading, but the service suffered the same fate as its credit card division.

Fidelity doesn’t offer futures contracts, and that’s a clear fault compared to its rival here. But it does offer some financial products that E*Trade doesn’t have: annuities and life insurance. Of course, Fidelity has the normal range of bonds, options, equities, and funds.


Trading Tools

After you’ve done your security research (and both firms have good resources for this), it’s time to place a trade. E*Trade offers a great website for this, although we do wish the broker-dealer would add a trade bar to its site. The order ticket sits within a web page and offers several types (including trialing and stop orders).

A stock’s profile page has both small and large graphs. The large version can be expanded full screen and offers a lot of great tools, such as company events and technical studies.

For some traders, the website may not be enough, which is why the company offers Power E*Trade, a browser platform. It provides an economic calendar, account analysis tools, and streaming Bloomberg news.


Etrade Pro


For traders who place a lot of orders, E*Trade offers a desktop platform. It has the company’s most advanced tools, such as Level II quotes and direct-access routing.

Fidelity has strengths and weaknesses in this department compared to its rival. Fidelity doesn’t have a browser platform, although its website has a simple trade bar (it pops out into the left-hand side of the screen after clicking on a trade button).

Fidelity’s website provides some really good charting tools. For example, a chart can be exported as an image and settings can be saved for future use. There are several technical studies, and comparisons and drawing tools are very helpful.

Last, but certainly not least, is Fidelity’s desktop platform Active Trader Pro. As with E*Trade, this is the company’s flagship software. But unlike E*Trade, Fidelity does not impose any account minimums or trading requirements to use it.


Active Trader Pro


Highlights on ATP include extended-hours trading, a demo mode, very good charting, Level II data, Bloomberg video news, and direct-access routing.

TD Ameritrade offers a skill for Amazon Echo devices. It is able to get quotes, broadcast a market briefing, and link to an account. It is the first skill to offer voice trading. E*Trade offers no skill at this point.


Mobile Platforms

Moving on to mobile devices, E*Trade doesn’t fail. The broker recently launched a second mobile app called Power E*Trade. It is basically the mobile version of its browser platform. It offers account information, a watch list, and quotes. The trading ticket is able to submit multiple legs at a time. While a chart does have some advanced features like technical studies, it cannot be rotated horizontally.


Fidelity Investments vs Etrade


The regular E*Trade app offers better charting (a graph can be rotated horizontally, for example). It also has a more sophisticated order ticket. Contingent orders are available, for example. Bloomberg TV is also available on this one, and Level II quotes are available for an additional charge.

The first thing we noticed about Fidelity’s app when we logged into it is the sheer number of financial news articles. Investors who want to keep track of global financial news will definitely benefit from this. In addition to articles, there is a Bloomberg feed.


Etrade vs Fidelity


As with E*Trade’s app, Fidelity has incorporated Touch ID. Charting comes with horizontal view, multiple graph styles, and several technical studies.


Customer Service Options

Our experience with the customer service department at each brokerage house has been mostly good. We usually receive competent service, and this includes phone and online channels. Fidelity also has a robo chat, something E*Trade hasn’t bought into (yet).

Fidelity offers 190 brick-and-mortar offices throughout the U.S. Most states have at least one location. E*Trade offers just 30, a glaring weakness in this category. Many states don’t have a single office.

On the positive side for E*Trade, we thought its website had better self-service features. These include finding forms and signing up for DRIP service.


Mutual and Exchange-traded Funds

Now we come to the final category in our survey: funds. There is one important difference between the two rivals: E*Trade doesn’t manage its own funds, while Fidelity does.

As for numbers, we found nearly 10,600 mutual funds with Fidelity’s screener. Close to 1,900 have neither load nor transaction fee. The broker’s search tool doesn’t offer the ability to scan for NTF products, a major flaw.

With E*Trade’s screener, we were able to search based on NTF status and load status. We found 4,217 that qualify on both accounts. In total, there are 8,443 funds open to new investors.

As for ETF’s, Fidelity customers get to buy and sell 265 with zero trading fees. The funds are from Fidelity and iShares. E*Trade offers far more fund families on its commission-free list (about 15), and also offers more funds (298 to be exact).


Promotions

Etrade: At E*TRADE, get $6.95 trades + 65₵ per options contract.

Fidelity: Get 500 free trades with $100,000+ deposit.



Recommendations

If you place more than 10 trades per month, then we’re going to recommend E*Trade. You’ll get the same commission that Fidelity charges plus E*Trade’s desktop platform, which we think is a little better than Active Trader Pro.

If customer service is important to you, go with Fidelity.

For mutual fund traders, we suggest E*Trade over its rival. Although E*Trade has fewer funds, it does offer more no-load, no-transaction-fee products. Plus, it offers an All-Star List, which is a prescreened group of funds that E*Trade financial advisors think will outperform its peers.

If you can keep more than $5,000 on deposit, we propose E*Trade for banking features.

If you want to bypass investing altogether and are willing to turn over your assets to your broker, we suggest E*Trade. It has a robo-advisory program that is free the first year.

Bargain seekers should take a look at Firstrade Review.


Fidelity vs E*Trade Summary

Cute TV commercials aren’t enough, but E*Trade proves it has the goods to back them up. Fidelity is hard to ignore, though, in many categories.


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