E*Trade offers an array of investment products at reasonable cost to investors. With the addition of banking, and futures and forex, E*Trade is worth taking a look at.
Pricing and Fees
Trading stocks and ETF’s carries a $9.99 charge. Customers placing more than 150 trades per quarter receive discount pricing at $7.99 per trade. Options are an additional $0.75 per contract.
Futures trades are $2.99 per side, and forex is commission free because there’s a markup in the bid-ask spread that compensates E*Trade.
The brokerage offers more than 8,000 mutual funds, of which 1,300 carry no-load and no transaction fee. Mutual funds that carry a transaction fee are $19.99.
E*Trade offers its customers more than 100 commission-free ETF’s with a 30-day holding requirement.
The brokerage offers investors access to both government and corporate debt. U.S. Treasuries at auction and on the secondary market are free to trade. The transaction fee for other bonds is $1.00, with a $10 minimum per order and a $250 maximum.
E*Trade’s current margin rate is 8.44% for debit balances less than $25,000.
E*Trade has an assortment of educational resources for its clients, consisting of articles, on-demand videos, and in-person seminars at select cities. A variety of topics are covered in these resources, such as options, fixed-income, and IRA’s. Some of the material is pulled from Morningstar. A handy resource that many securities brokers don’t offer that E*Trade does is futures research, including a dedicated futures customer service phone line.
E*Trade customer service can be contacted via an on-line chat system, phone, fax, or e-mail. Phone service is available 24 hours a day, 7 days a week. Using the web site, customers can perform a variety of tasks, such as sell fractional shares, order a debit card, or pay bills. E*Trade also has local branches in several cities, where customers can find investment advice and live seminars.
There is a discussion forum on the E*Trade web site, but it isn’t very active.
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Cash Management Features
E*Trade has an FDIC-insured bank that offers a checking account with the standard $250,000 insurance. The deposit account can be linked to an E*Trade brokerage account. The checking account comes with a Visa debit card and checks. E*Trade rebates ATM fees for customers who have a minimum balance of $5,000, or who have combined balances across all E*Trade accounts of at least $50,000.
The web site is intuitive and easy to navigate. E*Trade’s Total Trade Ticket can be used to place orders for stocks, options, and ETF’s. Conditional orders are available.
Advanced platforms are available to frequent traders or to customers who are willing to pay a rather steep monthly fee of $99.95. E*TRADE Pro is a desktop application, and E*TRADE MarketTrader is a browser platform. Both come with various features that would benefit sophisticated traders, such as Level II quotes, streaming charts, and market news.
E*Trade has applications for iPhone, iPad, Android phone and tablet, Amazon Fire phone, Kindle Fire HD, and Windows phone. The iPhone app has the most features. The interface is easy to navigate. Users will find a trade ticket, charts, educational videos, mobile check deposit, and many other features. There is a CNBC video archive available at no additional cost, although live CNBC streaming is only available to active traders or to clients who elect to pay a very steep $99.95 monthly fee. Despite this disadvantage, the E*Trade mobile app is one of the best brokerage apps.
E*Trade has recently rolled out an app for Apple Watch for the most busy and tech savvy of traders.
Customers who open an E*Trade brokerage or retirement account with at least $10,000 of cash or securities will receive free trades for 60 days. Customers who deposit at
least $25,000 will also receive a $200 bonus in addition to the free trades. Promotion link:
Trade free for 60 days + get up to $600.
E*Trade is one of the few brokerage firms in the U.S. that offer futures and forex, in addition to the standard selection of securities. Unfortunately, customers who want to trade futures and forex must open separate accounts. At OptionsXpress, in comparison, securities, futures, and forex can all be traded in the same account.
Besides their standard brokerage account, E*Trade also offers IPO’s and IRA’s.
For clients wanting to pursue financial opportunities worldwide, E*Trade offers access to international markets. Investors can trade securities directly on Canadian, French, German, Hong Kong, Japanese, and UK markets in local currencies. Once again, E*Trade customers who want this capability will have to fill out another form.
Its selection of financial products, combined with 24/7 customer service, gives E*Trade an edge over other brokers. Firstrade, for example, doesn’t offer 24/7 customer service; and Scottrade doesn’t offer futures or forex.
E*Trade clients can access bank accounts, retirement products, equities, fixed-income, futures, and forex all with one log-in. The vast majority of brokers don’t have such a wide variety, TD Ameritrade being a rare exception.
E*Trade’s standard commission of $9.99 is higher than some of its rivals, such as TradeKing Review ($4.95) and Scottrade ($7),
both of which are known to be quality firms. Furthermore, E*Trade’s charge for options ($0.75 per contract) is higher than
OptionsHouse, which charges only $4.95 plus $0.50 per contract.
E*Trade touts its advanced trading platforms, but limits them to active traders. TD Ameritrade, in comparison, has no such requirements for its advanced platforms.
E*Trade offers a range of products all in one account that some investors will find enticing. For less active traders, TD Ameritrade, a major rival, comes out on top.
Trade free for 60 days + get up to $600.
This article was updated on 7/23/2015.