E*TRADE review 2024: Pros, cons and more

Our Verdict

Our Verdict

ETRADE is a leading online brokerage firm founded in 1982 and headquartered in Arlington, Virginia, USA. It offers a wide range of financial products and services, including online trading of stocks, options, futures, ETFs, mutual funds, and fixed-income securities. ETRADE serves both individual investors and institutional clients, providing access to comprehensive trading platforms, research tools, educational resources, and personalized support.

Pros

• Educational resources
• User-friendly trading platforms
• Wide range of investment options
• Comprehensive research and analysis tools

Cons

• Complex fee structure
• High trading commissions
• Minimum account balance requirements

4.8

Our ratings take into account a product's cost, features, ease of use, customer service and other category-specific attributes. All ratings are determined solely by our editorial team.

Starting price

$0.65

Investment education and resources

Yes

Online brokerage services

ETRADE serves as an online brokerage platform

Who would benefit from selecting E*TRADE?

E*TRADE serves as a top choice for most investors due to its diverse offerings. Novice and intermediate investors can leverage the benefits of accessing free financial advisors, trading experts, and a comprehensive educational platform.

For seasoned active traders, the Power E*TRADE platform offers valuable features such as advanced charting tools, options strategies, and risk metrics. Fundamental investors can make use of independent research reports and screening tools. The extensive educational resources cater to investors and traders of all levels.

However, while E*TRADE caters to various investing needs, it's not without its drawbacks. Professional traders and frequent options traders may prefer platforms tailored to their specific requirements. The absence of a journal feature could pose challenges for some professionals.

On the contrary, beginners might seek platforms offering fractional shares, such as Schwab or SoFi, to diversify their investments without committing all funds to expensive stocks. Investors interested in cryptocurrency or forex trading will need to explore alternative brokers.

A notable downside across all experience levels is E*TRADE's subpar customer service via phone and text chat, characterized by long wait times. This inconvenience can be mitigated by opting for email support, albeit with delayed responses.

E*TRADE charges and expenses

E*TRADE's charges and fees fall within the standard range compared to other online brokers we evaluated. They offer commission-free trading for stocks and exchange-traded funds (ETFs), aligning with industry norms. However, their $0.65 per contract fee for options (reduced to $0.50 per contract for customers with at least 30 trades quarterly) is reasonable but not the most competitive.

For mutual fund investors, E*TRADE presents over 6,000 no-load, no-transaction fee funds, which is highly advantageous.

Margin rates with E*TRADE average at 7.79%, varying from 14.20% for balances under $10,000 to 12.20% for accounts holding up to $500,000. Margin traders seeking the most competitive rates may find better options with Interactive Brokers or Zacks Trade.

It's important for active traders to be aware that E*TRADE may receive payment for order flow. While this may not be ideal for day traders, the company asserts its commitment to optimal trade execution.

Regarding account fees for occasional additional services, E*TRADE's charges are generally average, such as a $25 fee for outgoing wire transfers. However, investors should take note of the higher-than-average $75 fee for full account transfers out.

E*TRADE platform and technological features

Types of accounts

E*TRADE offers a diverse range of account options. In addition to standard taxable brokerage accounts and tax-advantaged individual retirement accounts (IRAs), they provide Coverdell educational savings accounts (ESAs) and custodial accounts. Within the retirement category, the IRA for minors is tailored for teenagers with earned income, while E*TRADE’s Complete IRA offers specialized features for retirement investors aged 59 ½ and above.

For business owners, E*TRADE offers a variety of account types, including solo 401(k) plans, SIMPLE IRAs, and SEP IRAs. As interest rates rise, E*TRADE’s interest-bearing savings and checking cash management accounts are likely to become more appealing.

Power E*TRADE trading platform

The Power E*TRADE platform is designed for intermediate and advanced investors. This comprehensive trading platform is user-friendly and features a live-streaming Bloomberg TV feed. With over 145 charting tools, E*TRADE competes directly with the industry's leading trading platforms, catering to technical traders who require thorough analysis. Options strategies and risk probabilities are easily accessible and understandable.

Paper trading allows novice investors to refine their investment and trading skills before risking their capital. Additionally, features such as watchlists, alerts, screeners, Level II quotes, and extended hours trading are all available.

Key features of power E*TRADE include:

• Streaming quotes, news, charts, and market details
• Dynamic charting
• Risk-reward analysis, including potential profits and losses
• Single trade ticket for stocks, ETFs, simple and complex options, and futures
• Over 100 technical studies and preset scans to identify potential trade opportunities
• Simple and complex options trading strategies
• Options strategies and risk metrics explained in plain language
• Automatic creation of support and resistance lines on charts
• Preset scans to identify unusual activity, price movements, and technical indicators

Order types

E*TRADE provides sophisticated traders with access to a comprehensive range of order types on both desktop and mobile platforms, including conditional and durational orders. Options trading orders are categorized from Level 1 to Level 4.

E*TRADE offers the following order types:

• Day
• Stop limit
• Trailing stop
• Good til cancelled (GTC)
• One cancels the other (OCO)
• Limit on open/close
• Market on open/close
• Short

E*TRADE managed portfolios

For investors seeking a hands-off approach, E*TRADE offers various managed portfolio services. These services encompass four levels of managed portfolio types, each requiring a progressively higher minimum balance, catering to different investor profiles. E*TRADE's managed portfolio services can be likened to its robo-advisor and financial advisory products.

E*TRADE Core Portfolios, with a modest minimum balance requirement of $500, charges an annual fee of 0.30% of assets under management. While slightly more expensive than the 0.25% advisory fees charged by Betterment and Wealthfront, Core Portfolios offer users the opportunity to complete a brief questionnaire to evaluate their objectives and risk tolerance. Based on these responses, the platform constructs a portfolio of ETFs. An advantage of Core Portfolios is access to live financial consultants for guidance.

E*TRADE Blend Portfolios and E*TRADE Dedicated Portfolios provide similar managed ETF portfolios tailored to individual goals, with higher minimum balance requirements and increased annual fees in exchange for more personalized assistance from financial advisors. E*TRADE Fixed Income Portfolios, targeting retirees, impose the highest minimum balance requirement among the four options.

E*TRADE managed portfolios

E*TRADE mobile applications

E*TRADE provides two mobile applications tailored to different user needs: one designed for users of the advanced Power E*TRADE platform and another for users of the basic web platform.

The E*TRADE basic app provides access to quotes, charts, and portfolio information. Additionally, users can access tools, screeners, research, and educational resources through this app.

The Power E*TRADE Advanced Trading app caters to traders and investors on the move. While offering fewer features compared to the desktop version, it allows for complex options and futures trades in addition to basic stock and fund transactions. Moreover, users gain access to charts, technical studies, and pre-set scans within this highly portable app.

E*TRADE's diverse offerings

E*TRADE presents an extensive array of trading options covering nearly every asset type an investor might seek, ranking among the top five brokers in terms of available assets. Their financial consultants and trading specialists cater to individuals across all experience levels, from beginners to seasoned traders. The platform's user-friendly interface is particularly advantageous for newcomers. With a wide selection of mutual funds—exceeding 7,000—and futures trading capabilities, E*TRADE appeals to investors with varied preferences.

Noteworthy features include the Dime Buyback Program, offering the opportunity to cover short options for a fee. Additionally, E*TRADE facilitates options on futures trading, including commodities such as oil, gold, and corn, which are available for trading 24 hours a day, six days a week.

For futures traders, E*TRADE stands out with access to micro e-mini contracts, no short restrictions, Bitcoin futures, and dedicated futures specialists. Similar to options, futures trading is accessible 24 hours a day, six days a week.

However, it's important to note that E*TRADE does not provide fractional shares, international trading, or foreign exchange trading (forex).

E*TRADE research and education

E*TRADE stands out as one of the top online brokers in our assessment in terms of research and educational resources. Their educational formats cater to diverse learning styles, incorporating articles, videos, online courses, and webinars. The presentation of research information is clear, user-friendly, and categorized for easy navigation.

Research

Real-time quotes and streaming market news are invaluable for investors tracking minute-by-minute changes in financial markets. Organized fund and stock lists, categorized by various criteria, stimulate investment and trading ideas. Most screeners and research materials are seamlessly integrated within the Power E*TRADE trading platform.

E*TRADE offers comprehensive research materials to meet the needs of both fundamental and technical traders. Their tools and screeners assist users in narrowing down their selections, while independent analyst research adds depth to individual asset analysis.

The E*TRADE Futures Research Center, sponsored by CME Group, provides extensive educational resources catering to futures traders of all skill levels.

Education

E*TRADE's educational resources are tailored to accommodate both novice traders and experienced investors. Beginners can benefit from foundational topics, such as the "How to Buy a Stock Online" explainer, while advanced investors can explore more intricate subjects, such as the "Iron Condor Options Strategy" webinar. Calculators and widgets facilitate real-time analyses and projections.

Educational topics cover a wide range, including:

• Stocks, bonds, mutual funds, and ETFs
• Futures and options
• Margin trading
• Retirement planning
• Tax considerations
• Platform demonstrations and tutorials

E*TRADE customer support and safety

In our thorough testing of customer service via phone, email, and text, we found that E*TRADE's support entails longer wait times and more frequent instances of unanswered queries compared to several larger investment firms.

Notably, none of the calls placed after 7:00 pm received a response within 10 minutes. Among our seven email interactions, responses were evenly split between those received within one day and those requiring two to three days. Text chat proved unresponsive in our assessment.

Despite shortcomings in customer service, E*TRADE maintains robust security measures and insurance coverage. Security features include firewalls, 128-bit encryption, two-factor authentication, and mobile security protocols.

The platform's insurance comprises standard SIPC coverage of $500,000. Additionally, E*TRADE provides supplemental insurance of $1 billion each for cash and securities, offering added protection against company insolvency or failure. However, it's important to note that no insurance safeguards investors' financial assets from market value declines.