Is E*Trade Safe?
E*Trade is one of the most well-known online brokers. Even though many people recognize the E*Trade name, some might wonder if E*Trade is a scam or a safe broker to use. Here, we answer those questions and review E*Trade’s commissions, pricing, trading platforms, research tools, and more.
E*Trade started about 40 years ago and says they were the first company to let a retail investor place a trade online. Most Americans know E*Trade from their famous baby commercials during the Super Bowl. In the investment world, E*Trade has a great reputation for its easy-to-use and strong trading tools.
In late 2020, Morgan Stanley bought E*Trade in an all-stock deal worth about $13 billion. E*Trade is now owned by Morgan Stanley, but it still uses the E*Trade name, website, and tools. In E*Trade’s last year before the buyout (2019), they reported over 291,000 daily average customer trades, more than 7.2 million accounts, and nearly $3 billion in revenue.
E*Trade Better Business Bureau (BBB)
The Better Business Bureau is often used to check if a company is trustworthy. E*Trade has a profile with the BBB but is not accredited by them. This just means E*Trade chose not to pay the BBB’s fee for accreditation.
E*Trade has 53 customer reviews with a 1.09/5 star rating and 426 complaints closed in the last 3 years with the BBB. But since E*Trade has millions of customers, the number of complaints is actually a very small percentage of their total users.
Is E*Trade Legitimate?
If you are worried about E*Trade being a real broker, you don’t need to be. They are closely watched by several regulators to make sure they act properly. Since E*Trade deals with people’s money, they are under strict rules and oversight.
Some regulators that watch over E*Trade include the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the U.S. Financial Crimes Enforcement Network (FinCEN). E*Trade also posts a Statement of Financial Condition on its website showing its assets, debts, and equity.
Is E*Trade a Scam?
E*Trade is officially registered with both FINRA and the SEC. If you want to check, E*Trade’s FINRA CRD number is 29106, and its SEC number is 8-44112. On E*Trade’s FINRA profile, they have 226 disclosures, including 93 regulatory events and 133 arbitration events. You can see more details about these on their FINRA report.
Is E*Trade Insured?
For any assets in your E*Trade brokerage account, you are covered by Securities Investor Protection Corporation (SIPC) insurance for up to $500,000, including $250,000 in cash. SIPC insurance protects your money and investments if E*Trade goes out of business.
For checking and savings accounts at E*Trade through Morgan Stanley Private Bank, your money can be FDIC insured between $250,000 and $500,000, depending on your account. FDIC insurance protects your cash if the bank fails.
E*Trade offers an Extended Sweep Deposit Account for cash in non-retirement accounts and a Retirement Sweep Deposit Account for retirement accounts. These programs automatically move your cash to up to 5 different FDIC-insured banks. This makes you eligible for up to $500,000 of FDIC coverage for your cash in these programs.
E*Trade also has extra insurance above SIPC coverage, providing up to $1 billion in total for customers’ cash and securities.
Is E*Trade Secure?
E*Trade uses many ways to keep your accounts, privacy, and data safe. E*Trade follows the SEC’s Customer Protection Rule, which means they must keep your paid securities separate from their own assets.
E*Trade goes further than the SEC’s rule by offering a Complete Protection Guarantee. This promise says that E*Trade will cover any losses in your accounts from unauthorized use. They also say they will not sell your personal information to other companies or marketers.
E*Trade protects your account and privacy with fraud teams, firewalls, and encryption. You can also use optional tools like two-factor authentication (2FA) for logins and get security alerts by text or email.
Top Rated Brokers
Is E*Trade a Scam or Legitimate? The Verdict.
From the facts, E*Trade is clearly a real company. They are highly regulated and take customer safety seriously. E*Trade offers account insurance, strong account security, and has a good reputation among brokers.
Website
On E*Trade’s website, Power is available as a browser platform. Charting is strong, with over a hundred technical studies. The software offers 10 chart styles and different drawing tools. You can open a chart in its own window.
The same order ticket from the mobile app is on the website. One feature of the website version is a profit/loss diagram in the order ticket. For any trade, this diagram shows you the most you could gain or lose.
After Power, the website itself has some helpful features. You can use a search box in the top right to find securities by name or symbol. There is an order ticket for those who prefer the website over Power.
Desktop Platform
E*Trade’s top platform is Pro, a desktop program. You need at least $1,000 in your account to use it. Real-time quotes are also required, but they’re free for non-professional users.
After you download and install Pro, you get extra features not found on Power. For example, Pro has Level II data and direct-access routing, which the browser version does not.
Other useful features of Pro include time & sales data, an economic calendar, a strategy scanner, advanced option tools, and a margin calculator.
Other Tools
E*Trade also has a platform for Apple Watch. Its app works on tablets too.
The company does not have an app for Apple TV or a skill for Amazon devices.
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Mutual Funds
E*Trade’s website has a mutual fund center with several useful tools. One of these is a mutual fund portfolio builder that lets you choose between three portfolios—conservative, moderate, and aggressive—with a $500 minimum deposit. Each portfolio comes with a set of mutual funds already included, so you don’t need to pick funds yourself. E*Trade’s system will split your money between the funds in the portfolio.
E*Trade also has All-Star Funds. These are chosen by the company’s investment experts for their potential to perform better than others. You can access this list for free.
Using E*Trade’s mutual fund screener, we found 8,593 funds that new investors can buy. Out of these, 4,414 have no sales charges and no transaction fees.
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Exchange-Traded Funds
There is a great section for ETFs on E*Trade’s website. It shows the most active funds and the top U.S. equity performers. Another section lists the five best-performing fund categories. On the day we checked, these were technology, health care, large-cap growth, mid-cap growth, and small-cap growth.
There is also an ETF All-Star List, which has the same features and pricing as the mutual fund list. Like with mutual funds, you can get pre-made ETF portfolios for free.
A tool for category analysis displays heat maps of major fund types over different periods. Another tool lets you compare important data for funds side by side.
Retirement and Taxable Accounts
E*Trade offers more than just regular taxable accounts. There are joint and custodial accounts as well. For retirement, you can open Roth, SIMPLE, SEP, traditional, beneficiary, and minor IRAs. The Complete IRA is for people over 59½ who want to start withdrawing money from their IRA.
If you have a retirement plan from a previous job, you can roll it over. If you are self-employed, E*Trade has solo 401(k) plans. Parents can open a Coverdell Education Savings Account to save for their children’s education.
E*Trade charges three IRA fees: $25 each for early withdrawals, extra contributions, or recharacterizations.
Cash Management Features
Along with brokerage services, E*Trade has its own bank. It’s called E*Trade Bank and comes with FDIC insurance and some useful features. The Max-Rate Checking account pays 0.05% interest, which isn’t high, but it includes unlimited ATM fee refunds across the country. There’s a $15 monthly fee, but you can avoid it in several ways. Bill pay and your first pack of checks are both free.
If you want higher interest, you can open a Premium Savings Account. It pays 1.75% APY with no monthly fee.
Other Services
E*Trade has a free Dividend Reinvestment Plan. This plan automatically uses your cash dividends to buy more shares. You can set it up for one stock or your whole account.
E*Trade also has an automatic mutual fund investment service. You can set up regular automatic deposits into mutual funds.
E*Trade gives information about global stock markets, but you can’t trade international stocks through them.
E*Trade Comparison
E*Trade is strong in all the areas we checked, but it does fall behind some other brokers in some ways. For example, Firstrade
offers $0 commission for all mutual funds and no charge per option contract.
Charles Schwab does not have limits on its desktop platform. Schwab also has more physical branches than E*Trade. Fidelity does not charge any IRA fees.
Interactive Brokers offers trading in forex, precious metals, and foreign stocks, which E*Trade does not.
Fidelity has an app for Apple TV, and Charles Schwab has a skill for Amazon Echo.
Recommendations
Beginners: E*Trade is a good choice for new traders because it has strong customer service, physical branches, and good learning materials.
Mutual Fund Investors: E*Trade is one of the top brokers for mutual funds.
Individual Retirement Accounts: We don’t like E*Trade’s IRA fees. Firstrade is a better option for IRAs.
Active ETF and Stock Trading: E*Trade is good for frequent traders with at least $1,000. Charles Schwab could also be a better choice.
Long-Term Investors and Retirement Savers: E*Trade is suitable for people with a long-term approach, with its target-date funds, financial planning, and 401(k) plans.
Small Accounts: With no minimum balance, E*Trade is a good choice for taxable accounts.
E*Trade Review Summary
E*Trade is one of the most recognized brokers in the U.S. While it is smaller by total assets than some competitors, it still stands up well against them.
Updated on 6/20/2025.
Paul Johnson is a Licensed Stockbroker with 7+ years of experience in the financial services industry. Paul enjoys teaching about investing and writing about financial topics. He is a husband and father of twin boys.
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