Is E*TRADE Safe?
E*TRADE is one of the most well-established online brokers in the industry. Even with E*TRADE being a household name, some people might still have questions in their minds such as whether E*TRADE is a scam or legitimate and if it is a safe broker to use or not. We answer those questions as well as provide a review of E*TRADE’s commissions and pricing, trading platforms, research tools, and more.
The origin of E*TRADE began around 40 years ago when it says it was the first company to ever
execute an online trade sent to an exchange for a retail investor. Most Americans are probably familiar
with the brand E*TRADE from watching its famous baby commercials during Super Bowl ads. In the investment world, E*TRADE has a strong reputation for its powerful, user-friendly trading tools and platforms.
In late 2020, Morgan Stanley acquired E*TRADE in an all-stock transaction that was valued at around $13 billion at the time. E*TRADE now lives under the Morgan Stanley umbrella and still operates with the E*TRADE name, website, and tools. In E*TRADE’s last full fiscal year before the acquisition, it reported processing over 291,000 daily average customer trades, having over 7.2 million total accounts, and producing close to $3 billion in total revenue.
E*TRADE Better Business Bureau (BBB)
The Better Business Bureau serves as a classic starting point for trying to figure out if a company is legitimate or not. E*TRADE has a profile with the BBB but is not accredited with the BBB. Don’t be alarmed by this, as many legitimate financial firms choose not to pursue accreditation.
E*TRADE has received many complaints and a low customer-review score on BBB. To help put these numbers into context, E*TRADE has millions of customers. Therefore, the complaint totals still represent a very small percentage of unhappy customers who took the time to file complaints against E*TRADE and leave bad reviews on its BBB profile.
Is E*TRADE Legitimate?
If you are worried about E*TRADE being a legitimate broker, you can rest assured that it has plenty of regulators making sure that it is operating in an ethical and legitimate way. With E*TRADE being in the financial industry and handling people’s money, there is significant regulatory oversight and many rules that it has to constantly comply with.
Some of the regulatory organizations that oversee E*TRADE’s operations 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 provides a Statement of Financial Condition on its website that reveals its assets, liabilities, and equity.
Is E*TRADE a Scam?
E*TRADE is actively registered with both FINRA and the SEC. If you want to look up either of their registrations, E*TRADE’s CRD number with FINRA is 29106 and its SEC number is 8-44112. On E*TRADE’s FINRA profile, it has numerous disclosures, including regulatory events and arbitration matters. You can view E*TRADE’s detailed report on its FINRA profile if you want to read about any of the disclosures.
Is E*TRADE Insured?
For assets you hold within any type of E*TRADE brokerage account, you are covered under Securities
Investor Protection Corporation (SIPC) protection for up to $500,000, including $250,000 of cash.
SIPC protection helps cover missing securities and cash in the case of broker failure.
For checking and savings accounts offered through Morgan Stanley Private Bank, FDIC coverage depends on the account and how the cash is held. Standard checking products are generally protected up to standard FDIC limits, while some savings and sweep features can provide higher coverage when program conditions are met.
E*TRADE offers sweep features for cash in brokerage and bank accounts. Depending on the program, these can provide up to $500,000 of FDIC coverage for individual accounts and higher coverage for joint accounts when certain conditions are satisfied.
E*TRADE customers also have their cash and securities covered by a supplemental insurance policy that applies in excess of SIPC coverage with an aggregate firmwide limit of $1 billion.
Is E*TRADE Secure?
E*TRADE delivers numerous ways of protecting customers’ accounts, privacy, and data. E*TRADE protects customers’ accounts by adhering to the SEC’s Customer Protection Rule. The rule requires E*TRADE to keep fully paid customer securities segregated from E*TRADE’s own assets.
E*TRADE goes above and beyond the SEC’s required customer protection rule by offering its own Customer Protection Guarantee. The guarantee states that E*TRADE will restore losses that happen in your self-directed accounts resulting from unauthorized use of your accounts through no fault of your own. The company also says it will not sell your personal information to third parties or marketers for any purpose.
The security measures that E*TRADE enforces to protect your accounts and privacy include dedicated fraud protection teams, firewalls, and encryption. The optional security tools that E*TRADE provides to customers include two-factor authentication (2FA) and security alerts via text messages and/or emails.
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Is E*TRADE a Scam or Legitimate? The Verdict.
Based on the evidence, E*TRADE is clearly a legitimate company. It is running a highly regulated operation and appears to take customer account safety very seriously. E*TRADE has account protection, various account security protocols, and a solid reputation in the brokerage industry.
Trading and Investing
E*Trade customers can open self-directed brokerage accounts that give them access to a solid range of investment products. These include:
- Equities
- Options
- Futures
- Funds (mutual, exchange-traded, closed-end)
- Fixed income
E*Trade also has lower-cost advisory accounts through its Core Portfolios service. These managed accounts are run by a digital advisor that handles all trading decisions, and the portfolios use ETFs only.
E*Trade offers several account registration types. You can expect to see retirement accounts, joint accounts, custodial accounts, education accounts, and small-business plans.
Through E*Trade’s parent company, investors can also access a broad menu of full-service brokerage and managed-account options. These premium accounts can be opened at a Morgan Stanley branch and include many of the features associated with traditional investment accounts, such as planning and guidance from a licensed investment advisor representative.
Cash Management
With support from Morgan Stanley Private Bank, E*Trade has introduced a useful group of banking
services that its investing clients may want to consider. Checking and savings
accounts come with FDIC insurance, no monthly fees, and competitive interest rates.
E*Trade’s Max-Rate Checking account reimburses ATM fees charged anywhere in the world, while its standard
checking account scales this benefit back to ATM fees within the United States. Both accounts come with the same debit
card.
Certificates of deposit (CDs) are offered as well, although a brokerage account gives access to a wider array through
brokered CDs.
There is also a line of credit; this attractive feature uses securities in an E*Trade brokerage account
as collateral for loans that can be used for nearly any purpose.
For a more complete experience, bank and investment accounts are linked together at E*Trade under a single
login.
Website
On the topic of a single login, E*Trade’s website is easy to use and packed with helpful tools. A good starting point is the dashboard, which is the site’s default landing page. Drop-down menus across the top make it simple to move around the site, and when it is time to research trades, the Markets & Ideas tab is a useful place to begin.
Stock profiles on E*Trade’s website include analyst reports from several research firms, including TipRanks and Argus; some of these reports include price targets and trade opinions. Charts come with many features and tools, and the website’s order form includes seven order types.
For users who want something more advanced, E*Trade offers Power. This is a browser-based trading platform with expanded charting and trading tools. For instance, it provides more technical indicators and additional order types. The link to Power is located under the Trading tab.
Desktop Platform
The Power platform can also be installed as a desktop application. To do this, move over the Trading tab in the main menu and click the link for Power Pro. Then follow the prompts to install the software on your computer, whether it runs Windows or Mac. Just like the browser version, the program supports both live and simulated trading. The desktop version adds a few extra features, including the ability to build and save custom layouts.
Mobile App
For traders on the go, E*Trade offers two mobile apps. As expected, one of them is a Power app. The standard app is still worth attention because it includes many useful tools, including live streaming of Bloomberg Business News.
Margin
An E*Trade brokerage account can be opened either as a margin account or a cash account. Margin creates the ability
to trade advanced option spreads, sell securities short, and buy investments with borrowed money. Using margin, however, can be fairly
costly because of the broker’s interest-rate schedule, which begins at 12.45% and falls to 10.45% once debit balances go above $250,000. Above $500,000, rates can be negotiated.
E*Trade’s website includes a handy margin calculator; this tool can be found on the Portfolios page, which can be reached through the Accounts tab.
E*Trade offers portfolio margin to accounts that have $100,000 in assets and Level 4 options approval.
Additional Features
Fully-paid Stock Lending Program: E*Trade does offer one, although you must enroll in it. To sign up, log into the website and hover over the What We Offer tab. In the drop-down menu, you’ll find 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 center.
Dividend Reinvestment Plan: E*Trade brokerage clients can enroll their securities in automatic dividend reinvestment. Core Portfolios does this automatically.
Fractional Shares: Only for mutual funds at E*Trade.
Recurring Purchases: E*Trade investors can set up recurring purchases of mutual-fund shares.
Individual Retirement Accounts: E*Trade offers no-fee IRAs in multiple formats, including Roth, Traditional, Custodial, and Inherited. SEP and SIMPLE plans are available for small businesses. The broker’s website also includes several helpful IRA calculators.
Extended Hours: E*Trade offers pre-market and after-hours trading for stocks and ETFs. Some ETFs can be traded overnight. Futures are also 24-hour products.
Our Recommendations
Small Accounts: A brokerage account at E*Trade has no recurring fees and no minimum account
balance, although without fractional-share trading, the company is at a disadvantage compared with other
brokers today. A robo account has a $500 minimum, and lower minimums can be found elsewhere.
Charles Schwab,
for example, comes out ahead in both areas.
Beginning Investors: An advisory account at Morgan Stanley or E*Trade is a solid way to begin
investing.
Frequent Stock Trading: Thanks to its Power software, E*Trade is a strong choice for advanced stock
trading.
Retirement Planning and Long-Term Investing: E*Trade’s IRAs and custodial accounts are a good
way to begin saving for the future. Adding a Morgan Stanley financial planner is another smart move.
Mutual Funds: A brokerage account at E*Trade performs very well in this area. Expect to find more than
5,000 funds open to new investors.
E*TRADE Review Summary
E*Trade has a very complete investment program that should satisfy even demanding traders. It does have a few drawbacks, though, so it still makes sense to compare it with other brokers before deciding on your next account.
Updated on 3/23/2026.
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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