Is E*TRADE Safe?
E*TRADE from Morgan Stanley is one of the most established online brokerage names in the industry. Even though E*TRADE is a
widely recognized brand, some people may still wonder whether E*TRADE is legitimate, whether it is a scam, and
whether it is safe to use. We answer those questions and also review E*TRADE’s commissions and pricing,
trading platforms, research tools, and more.
E*TRADE began around 40 years ago and has long presented itself as one of the early pioneers of online trading for retail investors. Most Americans probably know
the E*TRADE brand from its famous baby commercials that aired during Super Bowl broadcasts. In the investing world, E*TRADE has a strong reputation for powerful, easy-to-use trading tools and platforms.
In late 2020, Morgan Stanley acquired E*TRADE in an all-stock transaction valued at roughly $13 billion at the time. E*TRADE now operates under the Morgan Stanley ownership structure, although it still uses the E*TRADE name, website, tools, and mobile apps. In E*TRADE’s final fiscal year of 2019 before Morgan Stanley acquired it, the company reported processing more than 291,000 daily average customer trades, having more than 7.2 million total accounts, and generating close to $3 billion in total revenue.
E*TRADE Better Business Bureau (BBB)
The Better Business Bureau is a traditional starting point for evaluating whether a company is legitimate. E*TRADE has a BBB profile but is not accredited by the BBB. This should not be alarming by itself, because many legitimate financial companies choose not to seek BBB accreditation.
E*TRADE’s current BBB profile shows a D- rating and 437 total complaints in the last 3 years, with 127 complaints closed in the last 12 months. BBB says the rating is affected by the company’s failure to respond to hundreds of complaints. To put these figures in perspective, E*TRADE has millions of customers. As a result, the complaint total still represents a small percentage of customers, but the BBB rating and unanswered complaints are worth reviewing before opening an account.
Is E*TRADE Legitimate?
If you are concerned about whether E*TRADE is a legitimate broker, there are many regulators overseeing the business. Because E*TRADE operates in the financial industry and handles customer assets, it is subject to significant regulatory oversight and many rules that it must follow on an ongoing basis.
Today, E*TRADE self-directed brokerage accounts are offered through Morgan Stanley Smith Barney LLC, which is a registered broker-dealer, registered investment adviser, and member of SIPC. Some of the regulatory organizations connected to the business include the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), and the U.S. Financial Crimes Enforcement Network (FinCEN). E*TRADE also provides financial disclosures and account documents on its website.
Is E*TRADE a Scam?
E*TRADE is not a scam. Current E*TRADE from Morgan Stanley brokerage services are provided through Morgan Stanley Smith Barney LLC. The older E*TRADE Securities LLC registration with CRD number 29106 and SEC number 8-44112 is no longer the active registration for E*TRADE retail brokerage accounts. FINRA’s BrokerCheck report for E*TRADE Securities LLC shows that the firm is no longer registered with FINRA or a national securities exchange and that it ceased doing business on December 14, 2023. E*TRADE accounts were moved under Morgan Stanley Smith Barney LLC as part of Morgan Stanley’s post-acquisition integration.
Is E*TRADE Insured?
For assets held in E*TRADE from Morgan Stanley brokerage accounts, Morgan Stanley Smith Barney LLC is a member of the Securities Investor Protection Corporation (SIPC). SIPC protects customer accounts up to $500,000, including up to $250,000 for cash claims. SIPC protection applies if a SIPC-member broker-dealer fails and customer cash or securities are missing. SIPC does not protect against market losses.
For checking and savings accounts offered through Morgan Stanley Private Bank, N.A., FDIC coverage depends on the account type. Max-Rate Checking, Checking, and Morgan Stanley Private Bank CD accounts are FDIC insured up to $250,000 per depositor. Premium Savings Accounts may be FDIC insured up to $500,000 per depositor once certain conditions are satisfied. Federal Deposit Insurance Corporation (FDIC) insurance protects eligible bank deposits against the failure of an insured bank.
E*TRADE from Morgan Stanley brokerage accounts also use a Bank Deposit Program for eligible cash balances. Cash swept into participating banks through that program may be FDIC insured up to $500,000 for individual accounts and $1,000,000 for joint accounts, once certain conditions are satisfied.
Morgan Stanley also maintains excess SIPC insurance. The current excess policy has an aggregate firmwide cap of $1 billion for securities and a $1.9 million per-client limit for uninvested cash.
Is E*TRADE Secure?
E*TRADE provides several ways to protect customer accounts, privacy, and data. E*TRADE protects customer accounts by following the SEC’s Customer Protection Rule. The rule requires fully paid customer securities to be kept separate from Morgan Stanley’s own assets.
E*TRADE also offers its Complete Protection Guarantee. The guarantee says E*TRADE may restore eligible losses that result from unauthorized use of the account. The guarantee also says E*TRADE won’t sell personal information to third parties or marketers for any purpose.
The security measures E*TRADE uses to protect accounts and privacy include dedicated fraud-protection teams, firewalls, and encryption. Optional security tools available to customers include two-factor authentication (2FA) and security alerts by text message and/or email.
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Is E*TRADE a Scam or Legitimate? The Verdict.
Based on the evidence, E*TRADE is clearly a legitimate company and not a scam. E*TRADE from Morgan Stanley operates within a highly regulated financial-services structure and appears to take customer account safety seriously. E*TRADE has account insurance, multiple account-security protocols, and a strong reputation in the brokerage industry.
Trading and Investing
Investors at E*TRADE can open self-directed brokerage accounts that provide access to a solid list of financial products. These include:
- Equities
- Options
- Futures
- Funds (mutual, exchange-traded, closed-end)
- Fixed income
E*TRADE also offers low-cost investment-advisory accounts through its Core Portfolios program. These managed accounts are handled through a digital investment-advisory program that selects investments; ETFs and mutual funds may be used.
Several account registrations are available at E*TRADE. Expect to find retirement accounts, joint accounts, custodial accounts, education accounts, and small-business plans.
Through E*TRADE’s parent company, a large lineup of full-service brokerage and managed accounts is also available. These higher-end accounts can be opened through Morgan Stanley and come with many services that traditional investment accounts receive, including planning and advice from licensed Morgan Stanley financial professionals.
Cash Management
With help from Morgan Stanley Private Bank, E*TRADE offers a useful selection of banking
features that investing customers will definitely want to review. Checking and savings
accounts come with FDIC insurance, no monthly fees on the basic checking and savings products, and competitive interest rates.
E*TRADE’s Max-Rate Checking account refunds ATM fees and foreign transaction fees worldwide, while its basic
checking option offers nationwide ATM fee refunds. Either account comes with a debit
card.
Certificates of deposit (CDs) are available, although a brokerage account offers a larger selection through
brokered CDs.
Then there is the line of credit; this service uses eligible securities in an E*TRADE brokerage account
as collateral for loans that can be used for many different purposes.
For a more complete experience, bank and investing accounts are conveniently linked at E*TRADE with a single
login.
Website
Speaking of a single login, E*TRADE’s website is easy to use and contains many helpful resources. A good place to start is the dashboard, which is the platform’s default landing page. Drop-down menus at the top make navigation simple, and when it is time to trade, the Markets & Ideas tab is a useful place to begin research.
Equity profiles on the E*TRADE site include analyst reports from several stock researchers, including TipRanks and Argus; some reports include price targets and trade recommendations. Charts have many tools and features, and the site’s order ticket supports several order types.
For a more advanced experience, E*TRADE offers Power E*TRADE. This browser-based trading platform has more charting and order tools. For example, it includes more technical studies and order types. The Power E*TRADE link is under the Trading tab.
Desktop Platform
E*TRADE now offers Power E*TRADE Pro for desktop trading. This downloadable platform is built for active traders and offers extensive customization, advanced charting, Level II market depth, multi-monitor layouts, and many technical studies. E*TRADE Pro, the older desktop platform, is being retired, so active traders should focus on the newer Power E*TRADE Pro platform.
Mobile App
For mobile traders, E*TRADE provides two apps. Not surprisingly by this point, one of them is a Power E*TRADE platform. The regular app should not be ignored because it includes many useful resources, including trading, research, account-management tools, and banking features.
Margin
A brokerage account at E*TRADE can be opened as either a margin or cash account. Margin makes it possible
to trade advanced option spreads, establish short positions, and buy securities with borrowed money. Using margin, however, is fairly
expensive because of the broker’s interest-rate schedule, which starts at 12.7% and drops to 10.7% above $250,000 in debit balances. Above $500,000, loan rates are negotiable.
The E*TRADE website has a useful margin calculator; the tool is located on the Portfolios page, which can be accessed through the Accounts tab.
E*TRADE offers portfolio margin for accounts with $100,000 in assets and Level 4 options approval.
Additional Features
Fully-Paid Stock Lending Program: E*TRADE offers one, although customers must enroll in it. To do so, log into the website and hover over the What We Offer tab. In the drop-down menu, you’ll see the link for Fully Paid Lending.
IPO Lineup: E*TRADE also provides access to Initial Public Offerings. Look under the Trading tab for the IPO hub.
Dividend Reinvestment Plan: Brokerage customers at E*TRADE can set up automatic dividend reinvestments for their securities. Core Portfolios does this by default.
Fractional Shares: E*TRADE offers fractional ETF shares through Automatic Investing with a $25 minimum. E*TRADE has also long supported fractional shares through dividend reinvestment and mutual-fund investing.
Recurring Purchases: Investors at E*TRADE can set up automatic investing in certain mutual funds and ETFs.
Individual Retirement Accounts: E*TRADE offers no-fee IRAs in several formats, including Roth, Traditional, Custodial, and Inherited. SEP and SIMPLE plans are available for small businesses. The broker’s website has several useful IRA calculators.
Extended Hours: Pre-market and after-hours sessions are available at E*TRADE for stocks and ETFs. Some ETFs trade overnight. Futures are also nearly 24-hour products.
Our Recommendations
Small Accounts: A brokerage account at E*TRADE has no recurring fees and no minimum account
balance. E*TRADE has also improved its fractional-share and automatic-investing capabilities, although
some competitors still offer a simpler fractional-share experience. A robo account has a $500 minimum; there are lower minimums elsewhere.
Charles Schwab,
for example, does better on some fronts.
Beginning Investors: An advisory account at Morgan Stanley or E*TRADE is a good way to start
investing.
Frequent Stock Trading: With its Power E*TRADE software, E*TRADE is a good choice for advanced equity
trading.
Retirement Planning and Long-Term Investing: E*TRADE’s IRAs and custodial accounts are a decent
way to start saving for the future. Adding a financial planner from Morgan Stanley is another good idea.
Mutual Funds: A brokerage account through E*TRADE works really well here. Expect to find thousands of funds open to new investors.
E*TRADE Review Summary
E*TRADE has a very complete investment program that will satisfy many demanding traders. There are some weaknesses, however, so be sure to compare other brokers before choosing your next firm.
Updated on 9/18/2026.
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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