E*TRADE is one of the most popular trading platforms in the US today. They offer the full range of investment services, as well as investment options. You can invest in a wide range of securities, including more than 8,000 mutual funds and ETF's. You can also get as much – or as little – personal assistance as you need. E*TRADE can work with you, whatever your level of expertise may be.
E*TRADE is an excellent platform for long-term investors, such as those who favor buy-and-hold investment strategies that involve relatively little trading. Their fee structure is on the higher end of the large brokerage firms, but they more than compensate for this with all of the investment services and tools that they provide.
E*TRADE is one of the leading financial services companies in the US, and has been serving the needs of individual investors for over 30 years. The company is one of the pioneer firms when it comes to online brokerage accounts, and it provides everything that you need to be a successful trader, including investment education.
The company was incorporated in 1982, and executed its first ever online trade in 1983. E*TRADE became a public company in 1996, and has grown steadily and rapidly ever since. It now has 3.3 million brokerage accounts, and $285 billion in client investment accounts, including more than $49 billion in retirement assets.
In the 2016 Webby Awards, E*TRADE received an official honoree distinction in the Web: Financial Services/Banking category.
In March 2016, E*TRADE earned four out of five stars overall in Barron's annual online broker survey. The company scored high in research amenities, customer service, education and security, and mobile.
Also in March 2016 E*TRADE was recognized as a member of NerdWallet's 2016 Investing Awards, “Best Online Brokers” for its investment selection, and both “Best Roth IRA Providers” and “Best IRA Providers” for having no account minimum.
Meanwhile in February 2016, Stockbrokers.com come gave E*TRADE an overall 4.5 out of 5 stars rating, and #1 Smartphone App Industry Award, along with nine Best in Class distinctions, including overall, offering of investments, platforms and tools, research, customer service, education, mobile, new investors, and order execution.
E*TRADE Features and Benefits
Here is just a summary of some of the more significant features and benefits offered by E*TRADE:
Opening an E*TRADE account. In order to open an account you must complete an online application. It will require only general information, including your address, date of birth, Social Security number, and employer name and address.
You must be a US resident with a valid Social Security number in order to open an E*TRADE account.
Available account types. You can open a taxable brokerage account (individual or joint), a futures trading account, a Forex trading account, and an investment club account. You can also open custodial accounts, accounts for trusts, estates and conservatorships, as well as Coverdell education savings accounts and business corporate LLC accounts.
E*TRADE also offers a full range of retirement accounts. This includes traditional and Roth IRA accounts, small business retirement plans, 401(k) rollover accounts, beneficiary IRAs, individual 401(k)s, IRAs for minors, SEP IRAs and Simple IRAs, and both profit-sharing and money purchase plans.
Investments offered. E*TRADE enables you to trade stocks, ETFs, mutual funds, target date funds, bonds and fixed income securities, options and futures. Their ETF investments helps them compete with brokers like Motif who only deal in ETFs.
Minimum Initial Deposit. To open an investing and trading account requires a minimum initial deposit of $500. No minimum initial deposits are required for either custodial or retirement accounts.
Platform. E*TRADE's platform offers free independent research, streaming real-time quotes, customizable planning tools, and everything that you need to manage do-it-yourself investing. The platform provides easy access to everything that you want to trade, including stocks, options, funds and bonds. There is also a wealth of research education to help you make better investment decisions. The platform will also sync directly with your Personal Capital account, making tracking of all your investments easy to do in one place.
E*TRADE Mobile. The mobile app is available for iPhone, Android, tablets and now Apple Watch. The app provides mutual fund research tools, enhanced quote details for stocks, ETFs, mutual funds, options, indices, and conditional orders, including one-triggers-other (OTO), contingent and stop loss orders. You can also access your personalized retirement center, as well as your full dashboard.
Customer service. You can contact E*TRADE by phone 24 hours a day. They also offer email contact and online live chat, as well as direct mail in the event you need to mail checks or other documents.
E*TRADE also has branches in many major cities around the country, in case you prefer face-to-face contact.
E*TRADE Bank. This is E*TRADE's own bank, that was created for the benefit of E*TRADE customers. The banking service offers a free transfer money service, a mobile app for your phone, and of course FDIC insurance on accounts up to $250,000 per depositor.
The regular checking account does not pay interest, but there is no account minimum balance, and no monthly account fees. You must make an initial minimum deposit of $100.
The bank also offers its Max-Rate checking account, that pays interest and requires a minimum monthly balance averaging at least $5,000 in order to avoid the $15 monthly fee. It also requires an initial minimum deposit of $100.
The banking service provides you with a free Visa debit card, and unlimited check transactions. The banking service also provides mortgages.
Asset protection. All E*TRADE bank accounts have FDIC insurance up to $250,000 per depositor. But there is also extended insurance for deposit accounts with coverage up to $1.25 million.
E*TRADE also provides SIPC insurance, protecting securities and cash of up to $500,000, including $250,000 for cash. There is also additional brokerage protection for up to $150 million through a London Insurer.
Account security. E*TRADE uses secure firewalls, as well as 128 bit encryption to safeguard your logon and transaction activity. They also provide session timeouts and security alerts. In addition, E*TRADE Fraud Protection is the company's promise to cover any loss that results from the “unauthorized use of their brokerage, banking, or lending services”.
E*TRADE Tools and Calculators
E*TRADE has one of the largest offerings of tools and calculators in the industry, including:
E*TRADE Pro. This platform provides enhanced speed, insight, and performance and is E*TRADE's top platform for the most active traders. It provides an Enhanced Options Analyzer to evaluate positions and strategies with greater precision, as well as professional grade streaming Greeks to assess the underlying risk of your options positions.
E*TRADE Pro uses a point and click order entry system that you can trade more quickly. And you can use it to trade stocks, ETF's and both basic and complex options from anywhere within the platform.
Stock & Fund Screeners. This tool enables you to sift through thousands of stocks and funds to find investments that best match your investment goals. The list of screeners available includes the Stock Screener, Mutual Fund Screener, ETF Screener, Bond Screener, and the Bond Fund Selector, which provides professional bond fund recommendations.
E*TRADE 360. E*TRADE bills this as it's “do-everything platform for traders and investors”. It provides free independent research, streaming real-time quotes, and customizable planning tools.
My Virtual Advisor. This tool will recommend an asset allocation and help you to determine the right investment solution to help you reach your investment goals. It enables you to allocate your assets – based on what's important to you – in a matter of minutes. The tool will recommend a target asset allocation based on your financial goals, risk tolerance and time horizon
E*TRADE Community. E*TRADE has merged investing with the social media through this community. This is the place where E*TRADE investors come to swap ideas and strategies with one another. It's also a place where you can connect with financial professionals, as well as an opportunity to see which stocks E*TRADE customers are buying and selling. There are also discussion boards for personal exchanges, as well as monitoring of community sentiment.
In many cases, E*TRADE has two fee structures, based on the number of trades you make per quarter. The best pricing is for investors who make 150 or more trades per quarter, while there are higher fees if you make fewer trades.
Stocks and options trades. E*TRADE charges a commission of $7.99 per trade on transactions involving stocks and simple options if you make 150 or more trades per quarter. If you make fewer than 150 trades the commission is $6.95 per trade. In either case, there is an options contract fee of $0.75 per contract. This puts them directly in competition for pricing with brokers like Scottrade, but slightly higher than the deep discounters like Trade King, now known as Ally Invest.
For complex options, the commission is $6.95 +0.75 cents per contract on options/options trades if you make 30 or more trades per quarter, and $4.95 plus $0.50 per contract if you make fewer than 150 trades.
The fee for options exercise/assignments is $19.99.
ETFs. There is no commission to trade commission-free ETFs. On other ETFs, the fee is $6.95 per trade if you make 150 or more trades per quarter, and $9.99 per trade if you make fewer than 150 trades per quarter.
Mutual funds. If you trade no-load, no-transaction-fee funds*, there is no commission fee charged. Other fund purchases have a commission of $19.99 per trade. Broker assisted trades carry an additional $25 fee to the applicable commission.
*E*TRADE offers 2,700 no-load, no transaction fee mutual funds.
Futures. The fee on futures contracts is $1.50 per contract, per side, plus applicable futures exchange and NFA fees, as well as floor brokerage charges for execution of non-electronically traded futures and futures options contracts. These secondary charges will vary by exchange, and are not charges made by E*TRADE.
Bonds. There are no commissions charged for either U.S. Treasury auction trades or US Treasury secondary trades online. On other bond types, the fee is $1 per bond, subject to a $10 minimum and a $250 maximum. If you make a rep assisted trade, a commission of $20 per trade will be added to fee.
Margin interest rates. Margin rates range from a low of 5.75% on account balances of $1 million or more, to a high of 9.25% on balances of less than $10,000.
Other fees. E*TRADE also charges the following fees:
- Paper statement fee – $2.00 per statement
- Outgoing account transfers – $25 for partial transfers, $75 for full transfers
- Stock certificate requests – $500 per certificate
- Wire transfers – free for incoming transfers, $25 for outgoing transfers
E*TRADE Investment Management
If you are not entirely comfortable investing on your own, E*TRADE can provide as much or as little investment assistance as you need. They have financial consultants available who can provide advice whenever you need it. This is one-on-one assistance with a financial advisor, who can help you create an investment plan, choose the investments that you need, and also help to manage the risk involved in the portfolio.
They also have E*TRADE Capital Management, which can select and even actively manage your portfolio for you. This also extends to retirement plans, where financial consultants can help you create a plan, allocate your assets, and estimate your projected income in retirement. Since you will be working directly with an individual, this is going to be more expensive than using a robo-advisor like Betterment, which manages your investments by algorithm.
You can certainly go the do-it-yourself investment route on E*TRADE, and they have all the tools to help you do it. But if you feel that you need a little – or a lot – of help along the way, they have that covered too.
There’s not much to complain about with E*TRADE, and this is all we could come up with:
Fee structure is at the higher end of the large brokerage firms. If you are a frequent trader, E*TRADE may not be the best platform for your investing activities. There are other large brokerage firms who charge substantially lower fees. However, the strength of E*TRADE is a combination of relatively moderate fees, in conjunction with one of the very best trading platforms available.
Will E*TRADE Work for You?
E*TRADE is currently offering up to $600 when you open up either a new brokerage account or an IRA account. They are also offering 60 days of free trades on deposits of $10,000 or more. And that's actually just the beginning. E*TRADE offers a graduated level of cash incentive and free trades depending upon the amount that you deposit with the firm. For deposits of $1 million or more, you can receive up to $2,500, plus free trades for 60 days.
E*TRADE is an excellent investment platform for investors at all skill levels. It has all of the tools and information sources necessary to improve your investment ability, no matter what level you are at. Since the fees are not the lowest in the industry, E*TRADE is probably best suited to long-term investors, rather than very active traders. But even active traders might find that the wide range of trading tools, applications and calculators more than offset the lower fees at some other brokerage firms.
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