E*TRADE

E*TRADE was founded as a retail financial services company back in 1982. It’s headquartered in New York City and it currently has 30 retail branches throughout. It also operates as an online brokerage, and was in fact one of the first brokers to offer services over the internet making it one of the longest running and most trusted online brokers available in the market today.

When it first began operating online, E*TRADE was priced at the higher end of the market. The target market was investors and traders that were willing to pay premium charges in exchange for advanced tools and research resources. These days it’s far more competitive in terms of its commission and fees, yet still offers an impressive range of features that will be very appealing to most traders out there. Going along with that, E*TRADE continues to improve it’s services making them just as competitive as most others around.

We have carried out a comprehensive review of E*TRADE as an online options broker and below we have provided all the relevant information you need to know about this broker and what it has to offer. In our opinion this is one of the best online brokers on the web for trading options.

Pros and Cons of E*TRADE

E*TRADE is a big name in the online brokerage industry, but it does still have some flaws and drawbacks. So where does E*TRADE excel, and where are the areas where it’s lagging? We outlined the main pros and cons of the platform—E*TRADE is excellent for a wide range of trading on stocks, options, and ETFs, but it’s not so hot when it comes to fractional shares and international trading exchanges.

Pros

• Best mobile app for online investors and traders
• Low trading fees on stock and ETF trading
• Pays interest on uninvested cash
• Prebuilt and automated portfolio options
• Plenty of educational content
• Good range of tools and resources
• Strong customer service
• Options trading for Levels 1-4
• Options and futures specialists are available
• Transparent pricing
• Extensive bond trading

Cons

• No international trading exchange/No forex
• Low interest on uninvested cash
• No direct crypto investing
• No fractional shares
• Only bank transfers are available
• The website can be challenging to navigate
• No live chat
• Margin rates are higher than other platforms
• The Android mobile app isn’t the best

Key Highlights

This part of our E*TRADE review will cover the key highlights anyone should know before using the app or committing financially. This online broker has unique features and has received several awards and recognitions over the past five years. If you’re interested in active trading or in-depth bond trading, E*TRADE might be a good fit for you, but it’s good to know the unique experience that E*TRADE brings to the table.

Unique Features

There’s a reason why E*TRADE is considered one of the best online brokers in the United States—during our testing, we found several excellent features that really set it apart from other competitors in the online trading and investment market.

You will need to deposit a minimum of $500 to open an options trading account at E*Trade.

• Research Material: Enjoy stock screeners and analyst research to inform your trading and investment picks.
• Excellent Trading: Execute online trades through commission-free U.S. stocks, options, ETFs, and mutual funds.
• Market Data: Use the E*TRADE app to get live market commentary, free market data streaming, and real-time quotes.
• Automated Investment Management: Automated technology and the E*TRADE team manage your core portfolios.
• Retirement (IRAs): Develop a retirement plan with no annual fees using the free tools and guidance that E*TRADE provides for those who want to open an IRA.
• Developer Platform: E*TRADE customers can manage trading, review account information, authenticate customers, and retrieve price information.
• Watch Lists: Develop a watch list from the E*TRADE dashboard to monitor stocks, options, and ETFs.
• Two Mobile Apps Available: The regular E*TRADE app provides charts, streaming quotes, portfolio information, research, education, tools, and screeners. The Power E*TRADE Advanced Trading app is geared toward stocks, options, futures, and ETFs, where traders can employ anything from basic to advanced strategies.

Awards & Recognition

E*TRADE has won many awards, providing online investors and traders with competitive stocks, options, ETFs, and IRAs. Here are some awards and industry recognitions they have accrued in the past several years, proving they are one of the best figures in the online brokerage industry!

• 2024: E*TRADE won the StockBrokers.com’s Annual Awards: #1 Mobile Trading App and #1 Web Trading Platform awards. They also won 15 Best in Class distinctions!
• 2023: E*TRADE won Best Trading Technology at Benzinga’s Global Fintech Awards.
• 2021: E*TRADE won the Best Data Marketing Campaign award at Tearsheet’s 2021 Data Day Awards.
• 2018: E*TRADE won the FCS Financial Marketer of the Year Award due to its marketing accomplishments.

Commission Structure and Fees

E*TRADE is known for its transparent and competitive pricing. They don’t charge any inactivity, withdrawal, or account fees—it’s an online trading/investment app where you’re not too bogged down with heavy overhead.

Trading Fees

E*TRADE offers free online trading for stocks, options, and ETFs. However, options incur a small fee: $0.65 per contract or $0.50 per contract with 30+ trades per quarter.

Additional Fees

• $1 per bond ($10 minimum and $250 maximum)
• $25 per broker-assisted trade and commission-free Treasury trading
• $6.95 commission on over-the-counter stock trades
• $4.95 commission on OTC stock trades if you make 30 or more trades per quarter
• $1.50 per fixed futures contract
• $2.50 per cryptocurrency futures contract
• The margin rate for less than $10,000 is 11.95%
• The margin rate for $250,000-499,999 is 9.95%

There are no fees for:

• More than 4,000 no-load, no-transaction-fee mutual funds
• $19.99 for transactional-fee funds
• $49.99 early redemption fee

Comparison

Let’s compare the fee structure at E*TRADE with its main competitors to get a sense of where E*TRADE falls amongst the crowd when it comes to fees and commissions.

Account Types

E*TRADE offers various account types that allow you to invest or trade the commodities and assets you’re most interested in. This is where E*TRADE thrives—there are a ton of ways that traders can get in on the action, all thanks to a robust lineup of different account options.

Account Options

The main categories at E*TRADE include brokerage accounts, retirement accounts, managed portfolios, small business retirement accounts, and the Morgan Stanley Private Bank! We’ll cover all possible options to show you everything that E*TRADE currently offers to its online traders.

Brokerage Accounts

• Brokerage Account
• Coverdell ESA
• Custodial Account

Retirement Accounts

• Rollover IRA
• Roth IRA
• Traditional IRA
• Inherited Beneficiary IRA
• E*TRADE Complete IRA
• IRA for Minors

Managed Portfolios

• Core Portfolios
• Morgan Stanley Financial Advisors

Small Business Retirement

• Traditional and Roth Individual 401(k)
• SIMPLE IRA
• SEP IRA
• Investment-Only Account

Bank

• Premium Savings Account
• Mac-Rate Checking
• Checking
• Line of Credit

Minimum Deposit

The good news with E*TRADE is that they don’t require a minimum initial deposit to open a brokerage account. In addition, they don’t have a minimum balance requirement to avoid monthly account fees. However, customers must fund their accounts within 30 days to keep the action going at E*TRADE. Although this isn’t a minimum deposit requirement, it’s worth noting that E*TRADE’s margin accounts require a minimum balance of $2,000 to keep open.

Note: Other than these two exceptions, there aren’t any minimum deposit requirements to worry about while investing or trading with E*TRADE.

Account Features

Learn about the unique features and benefits associated with different account types found on the E*TRADE app. They give their customers a wide range of avenues for sound investing and trades, so we’re excited to dive in and show you exactly how you can use E*TRADE for your online trading goals.

Brokerage Accounts

• Brokerage Account: Buy and sell stocks, ETFs, mutual funds, options, bonds, etc.
• Coverdell ESA: Save on a tax-deferred basis for a child’s education. Enjoy tax-free withdrawals for qualified educational expenses like tuition and books.
• Custodial Account: This is a brokerage account for a minor. A parent or other designated custodian manages it. Management shifts either when the minor reaches the statutory age of termination or custodianship is terminated.

Retirement Accounts

• Rollover IRA: Consolidate assets from a former employer’s retirement plan when you roll over your old 401(k) plan assets to a Morgan Stanley IRA.
• Roth IRA: This is a tax-free, growth-potential retirement plan. If you meet specific requirements, you pay no income taxes or tax penalties on qualified distributions.
• Traditional IRA: Make income tax-deductible contributions where your earning potential grows tax-deferred until you withdraw them from retirement.
• Inherited Beneficiary IRA: This account is for inherited retirement accounts. You can keep inherited retirement assets tax-deferred while investing for the future.
• E*TRADE Complete IRA: These accounts are for retirement investors over the age of 59.5. Upgrade for flexible access to cash with free checking, ATM/debit cards, and online bill pay.
• IRA for Minors: These accounts are designed for children earning income. They are retirement accounts managed by an adult for the benefit of a minor under the age of 18.

Managed Portfolios

• Core Portfolios: These diverse portfolios are monitored and managed via automated investment management. They are all done for a low annual advisory fee of 0.30% and a $500 minimum.
• Morgan Stanley Financial Advisors: Clients can get a goals-based plan and investing guidance, helping them to bring their future into focus.

Small Business Retirement

• Traditional and Roth Individual 401(k): These are retirement plans for small business owners and their spouses. They are much simpler to administer and manage than a typical 401(k) account.
• SIMPLE IRA: This IRA is geared toward businesses with fewer than 100 employees. These retirement plans involve deductibles from employer and employee contributions.
• SEP IRA: Designed for the self-employed and small businesses, this SEP IRA allows for flexible annual contributions from 0% to 25%.
• Investment-Only Account: These accounts are for businesses with existing retirement accounts. By changing the plan custodians, they expand the range of available investment options.

Bank

• Premium Savings Account: Boost your savings with 4.50% APY, and you can enjoy rates 10 times the national average. Plus, you get FDIC protection up to $500,000.
• Max-Rate Checking: Enjoy a competitive yield with 3.00% APY, plus ATM fee refunds worldwide. This is paired with 3.00% APY, 37 times the national average.
• Checking: Use the Morgan Stanley checking account to enjoy everyday banking with no monthly fees or minimums. ATM fee refunds are available nationwide.
• Line of Credit: Enjoy flexible financing by unlocking the power of your portfolio for cash when you need it the most.

E*TRADE’s Trading Platform

We’ve already discussed the different types of accounts at E*TRADE, but how does the platform perform from a functionality standpoint, and what kind of trading tools or features are available? We’ll discuss these critical topics in the following section—we’ll even highlight the mobile app and how this can work well for traders who want to take action on the go.

Platform Overview

You might be interested to know that the E*TRADE app has two versions. The regular E*TRADE app provides charts, streaming quotes, portfolio information, research, education, tools, and screeners. The Power E*TRADE Advanced Trading app is geared toward stocks, options, futures, and ETFs, where traders can employ anything from basic to advanced strategies.

E*TRADE Mobile App Highlights

• For Apple and Android devices (including the Apple Watch and tablet devices)
• Won Stockbrokers.com’s “Best in Class” award
• Manage cash with Transfer Money, check deposit, and Bill Pay
• Invest in stocks, ETFs, mutual funds, and options
• $0 commissions for online US-listed stock, ETF, and options trades

Power E*TRADE App Highlights

• Use a single trade ticket to handle stocks, ETFs, futures, and options (simple and complex)
• Use interactive charts and popular technical studies to spot ideal trade opportunities
• Customizable options chain to execute various trade strategies
• Use streaming quotes, earnings, dividends, news, gains, and depth view to view market movement
• Enjoy custom and four-legged spreads
• Behind the Move spots major price movements with a detailed explanation of the stock’s price change

Usability

E*TRADE has a user-friendly design if you’re familiar with how online trading works. The menus and tabs are highly organized, which makes it easy to get around E*TRADE. The app and website also function well in terms of speed, functionality, and handling.

However, because of the sheer volume of account types, trading opportunities, and educational materials offered on E*TRADE, the website, and mobile app can be a bit tricky to navigate when you use the platform for the first time, especially if you’re a newbie trader. What it really comes down to is learning how to conduct trades and how different features of the app or website work, which can be learned over time using the “Knowledge” tab.

Trading Commodities

What exactly can you trade once you’ve opened a trading account with E*TRADE? For an online broker known for low trading fees on stock or ETF trading and pays interest on uninvested cash, you can get a good idea of what’s available on E*TRADE.

Stocks

• Over-the-counter stock trading
• 1,000+ publicly traded stocks
• Fractional shares are only available as reinvestments
• The stock investing resource page provided
• IPOs (for qualified investors only)

Mutual Funds

• 4,000+ no-load, no-transaction-fee mutual funds
• 6,500+ mutual funds available
• $25 recurring investment (starting point)
• A mutual fund screener is available to filter funds by ratio, category, strategy, expense ratio, etc.

ETFs

• Strategy and industry ETFs
• Fixed-income, commodities, and equities ETFs
• ETF screener available
• Prebuilt, customizable ETF portfolios

Fixed Income and Bonds

• 50,000+ offerings
• Treasury, agency, and municipal bonds available
• Brokered C.D.s
• Corporate bonds
• High-yield bonds
• Commission-free US Treasury bonds

Options

• Four levels of options trading
• 24/6 trading on futures options (oil, corn, or gold)
• Short options are covered with the Dime Buyback Program
• Trade for 50 cents per contract

Futures

• 24/6 futures trading
• Enjoy micro e-mini contracts
• No minimum account value
• Perform multiple trades per day
• CBOE Futures Exchange, Chicago Mercantile Exchange, and Intercontinental Exchange futures trading available
• Bitcoin futures available
• No short-term sales restrictions
• Drawing tools available
• Access 100 technical studies for forming a trading strategy

Cash Management and Banking

• Unlimited transactions
• Doesn’t pay interest
• Free bill pay
• Free debit card
• ATM access worldwide (fees aren’t reimbursed)
• No monthly fees or minimum balances

Mobile App

The E*TRADE app is notable for its robust mobile trading capabilities. After testing the app for a few weeks, we were impressed with its features. The mobile trading app’s functionality is top-notch and works well with multiple mobile devices, such as smartphones and leading tablets.

Regarding the account types and commodities offered, E*TRADE features the same lineup whether you use the website or the mobile app. That doesn’t change switching from one platform to the next. The E*TRADE mobile app allows traders to:

• Trade commodities
• Make investments in bonds, securities, cryptos, etc.
• Track the markets
• Manage your online account

Research and Education

E*TRADE has it all—online traders can access a wide range of education and research materials to make the best possible choices on the app. Under the “Knowledge” menu, you can access educational resources such as tutorials, webinars, articles, research tools like market research, analysis, or third-party research reports, and gain support through mentoring or coaching services.

Available Resources

You can find these helpful resources at E*TRADE under the “Knowledge” menu option at the top of the main menu. Once you click on this link, a dropdown menu will appear with the following options:

• Investing Basics: This page offers investing ideas, information on risk tolerance, and tutorials on placing a stock trade.
• Advanced Trading: Traders can access the market dashboard to get a recap of the previous week every Monday. You can view how investors moved in and out of the S&P 500 sectors monthly under “Monthly Sector Rotation.” Under this menu choice, traders can read FAQs on “Trading In-Depth” that cover options, futures, margin accounts, and stocks.
• Retirement Planning: You can learn how to save for your retirement with the handy compounding interest tool, which allows you to establish a timeline and adjust your rate of return. There are also some FAQs on this page, where traders can get tips and tricks on successfully saving for retirement.
• Tax Planning: : Learn how investments are taxed and gain a high understanding of capital gains. There are also plenty of resources dealing with subjects like personal exemption, standard deduction, child tax credits, and deductions for home ownership.
• Morgan Stanley Thought Leadership: This menu option provides actionable insights from E*TRADE and Morgan Stanley. M.S. has educational tools for traders to access key market insights and updates. You can also learn about investing essentials.
• Market News: In the “Market News” section, traders will discover various articles and other content to gain insights into investing, trading, and retirement planning. It’s the ultimate FAQ section offered by E*TRADE, where you can learn the core tenets of how everything works.
• Thematic Investing: E*TRADE provides resources on learning to invest and trade with companies, entities, and organizations that share your values, beliefs, and principles.
• Events: Learn about E*TRADE’s live and on-demand educational events and online investing and trading webinars.
• Life Stages: Gain insights about saving for significant life events like education, family finances, elder care, or retirement in this section of E*TRADE’s “Knowledge” menu.

Education, research, and other learning tools are areas where E*TRADE truly excels over other online trading apps or platforms. This broker offers way more resources than its competitors, making it a great choice for newcomers who are learning the ropes of online trading and investments or highly seasoned traders who want to keep up with the latest updates, market movements, or trading tricks.

Security and Regulation

E*TRADE is a legitimate trading app. We know this because we did a little research into the company’s past to learn about its regulatory compliance and the security measures it is required to include on its platform. Traders can go forth with confidence using E*TRADE because it is held to various industry standards, like keeping its customers’ private data and personal information completely safe and secure.

Regulatory Compliance

E*TRADE is overseen by the following regulatory bodies to ensure this online broker is adhering to proper industry standards and practices—this includes other affiliated entities such as ETRADE Capital Management, LLC (ETCM), ETRADE Futures LLC, and Morgan Stanley & Co. LLC (MS&Co).

• Financial Industry Regulatory Authority (FINRA)
• Securities and Exchange Commission (SEC)
• Securities Investor Protection Corporation (SIPC)

Security Measures

Like most other broker apps, E*TRADE has security features that protect your personal information and financial assets or investments against outside threats. You can use E*TRADE knowing your data is secure and will never be shared or leaked to anyone outside the app. Anything you share is between you and E*TRADE.

• Encrypted Connection: All E*TRADE members’ private and financial data is kept completely safe and secure via an SSL-encrypted solid connection. If any outsider attempts to hack the connection between you and E*TRADE, they can only read the ciphertext form. You and E*TRADE are the only parties that can access the plaintext information! This is how broker apps ensure financial information and private data remain entirely confidential.
• Two-Factor Authentication: E*TRADE will provide you with an added layer of protection. If you’re attempting to log in from an unidentified device, you’ll be sent a security code. To access your account, you must send that security code back to E*TRADE to verify that you are indeed you and that you’re logging in using a legitimate mobile device.

Insurance

There are four ways that customers’ and clients’ assets are kept safe at E*TRADE:

• Bank Protection: This is provided through the Federal Deposit Insurance Corporation. Cash in brokerage accounts such as E*TRADE are kept in one or more FDIC-insured depositories and are insured up to $500,000 for the individual and $1,000,000 for joint accounts.
• Brokerage Protection: This is provided through the Securities Investor Protection Corporation. It only covers the failure of E*TRADE, not against potential market losses.
• Customer Protection Rule: Applies to all E*TRADE brokerage accounts under the U.S. Securities and Exchange Commission Customer Protection Rule. Any fully paid customer securities are kept separate from Morgan Stanley’s assets. M.S. cannot use customer-owned securities to cover its financial obligations.
• E*TRADE Complete Protection Guarantee: The Complete Protection Guarantee is another layer of protection besides bank and brokerage protections that protects your privacy, transactions, and assets.

User Experience

Is E*TRADE easy to use and navigate? We tested the app for a few weeks to find out. E*TRADE can be a bit difficult to use when you first begin, but as you learn the ins and outs over time, it becomes easy to use for investing and trading. The signup process is easy to complete, and the mobile app performs well for quick business.

Account Setup

Opening a new E*TRADE account only takes five to ten minutes, though it takes E*TRADE 1-3 days to review, verify, and approve your new account. We’ll highlight each signup process step so you know what to expect when you sign up for a new account.

Keep in mind that you must have a few things on hand to complete the initial setup process:

• Date of birth
• Residential address
• Social security number
• Employer identification number (optional)
• Contact information for your current employer
• Bank account information

Now, let’s go through each step of the registration process at E*TRADE to see what you must do to get your new account up and running.

1. You can begin signing up by downloading the E*TRADE app from Google Play or the App Store. You can also visit the regular website using your home computer, smartphone, or tablet.

2. The next step is to choose the account you want to open (individual account, joint account, custodial account, etc.) and whether or not you’re an existing E*TRADE customer. Click “Open an Account” to begin this step of the process.

3. Next, enter basic information, such as your residential address, phone number, date of birth, and social security number. These are used to verify that you’re old enough to use E*TRADE and live in a country or territory where this online broker is available.

4. You’ll have to answer a few trading-specific questions. You have to specify if a registered broker-dealer employs you, the Financial Industry Regulatory Authority, or a securities exchange. They’ll also ask if you’re a 10% shareholder, policymaker, or director for a publicly owned company.

5. Next, you must discuss your financial standing: assets, net worth, liquid net worth, annual income, etc. In this step, you must also state your objective for using E*TRADE, such as long-term investing or saving for retirement.

6. You’ll want to review and submit your application. Make sure all the information is correct and that you have a good understanding of the fees and charges that might apply to your account. Do all this before hitting “Submit.”

7. The next step is waiting for customer service to review, verify, and approve your new account. This usually takes 1-3 days, but your results may vary.

8. Once you can access your new E*TRADE account, fund it using one of the available banking options and begin trading online!

Performance and Navigation

The biggest complaint customers have had with E*TRADE is the density of features and resources for traders—many claim it’s a bit too overwhelming for newcomers despite great options. While the overall navigation, speed/reliability, and organization of the information are well-presented with a clean design and intuitive menu, we must admit it can be a lot to take in.

E*TRADE is ideal for seasoned traders familiar with how these broker apps work, but there’s a big learning curve for new traders.

Final Thoughts: Is E*TRADE Right For You?

So, what’s our final verdict on E*TRADE?

If there’s nothing else you take away from this E*TRADE review, remember that this online broker app caters well to traders of all skill levels! You don’t have to be a beginner or an advanced, high-volume trader specifically to do well with E*TRADE. Newcomers can learn plenty about trades and how to build their portfolios using E*TRADE’s helpful educational materials and learning resources.

E*TRADE is best suited for people with the following online trading goals:

• Gain access to financial consulting
• You’re interested in active trading
• Enjoy no-transaction-fee mutual funds
• Experience a robust trading platform that’s easy to use
• Gain access to research and educational materials
• Experience extensive bond trading

If you’re uncertain about E*TRADE, you can download the app and register a new account for free. Plus, there’s no minimum initial deposit and free online trading for stocks, options, and ETFs, so you can get involved at E*TRADE with minimal risk! Test the app for a while to see if it’s the right investment!