Is E*Trade Safe?
E*Trade is one of the oldest and most popular online brokers. Although E*Trade is widely known, some people may still wonder if E*Trade is a real and safe broker. We'll clear up these questions and also review E*Trade's commissions, platforms, research tools, and more.
The origin of E*Trade began around 40 years ago, and they claim to have been the first company to carry out an online trade for a retail investor. Many Americans know E*Trade from its famous baby commercials during Super Bowl ads. In the investing world, E*Trade is admired for its strong, easy-to-use trading tools and platforms.
In late 2020, Morgan Stanley bought E*Trade in an all-stock deal worth about $13 billion at the time. E*Trade is now owned by Morgan Stanley, but it still uses the E*Trade name, website, and tools. In E*Trade’s last fiscal year of 2019, before Morgan Stanley acquired it, E*Trade handled over 291,000 daily trades, had more than 7.2 million accounts, and generated nearly $3 billion in revenue.
E*Trade Better Business Bureau (BBB)
The Better Business Bureau (BBB) is a traditional place to check if a business is real or not. E*Trade does have a profile with the BBB, but it isn’t accredited. Don’t worry about this; it likely means E*Trade chose not to pay the BBB’s accreditation fee.
E*Trade has 53 customer reviews on the BBB with a 1.09 out of 5-star rating and 426 complaints closed in the last three years. E*Trade has millions of customers, so this complaint count amounts to a tiny fraction of clients who actually filed a complaint and posted a negative review on the BBB website.
Is E*Trade Legitimate?
If you’re worried about E*Trade’s legitimacy, you can relax because many regulators watch over E*Trade to ensure it follows ethical practices. As a financial firm dealing with people’s money, E*Trade faces significant oversight and must follow many rules.
Some of the regulators that oversee E*Trade are 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 required Statement of Financial Condition on its website, which shows its assets, liabilities, and equity.
Is E*Trade a Scam?
E*Trade is officially registered with FINRA and the SEC. If you want to check these registrations, E*Trade’s CRD number with FINRA is 29106 and its SEC number is 8-44112. On E*Trade’s FINRA page, there are 226 disclosures, which include 93 regulatory events and 133 arbitration events. You can visit E*Trade’s detailed FINRA report if you want to read about any disclosures.
Is E*Trade Insured?
If you hold assets in any E*Trade brokerage account, you get coverage from the Securities Investor Protection Corporation (SIPC) for up to $500,000, including $250,000 in cash. SIPC insurance protects your money if E*Trade goes bankrupt or ceases operations.
For E*Trade’s checking and savings accounts through Morgan Stanley Private Bank, your cash can be FDIC-insured between $250,000 and $500,000, depending on the account type. The Federal Deposit Insurance Corporation (FDIC) safeguards your bank-held cash if the bank fails.
E*Trade has an Extended Sweep Deposit Account for cash in non-retirement brokerage accounts and a Retirement Sweep Deposit Account for cash in retirement brokerage accounts. These sweep programs send your cash to up to five different FDIC-insured banks. Each program can give you up to $500,000 in FDIC coverage.
E*Trade customers also have extra insurance coverage beyond SIPC for a total of $1 billion.
Is E*Trade Secure?
E*Trade uses several methods to protect your account, privacy, and data. E*Trade follows the SEC’s Customer Protection Rule, which requires all fully paid customer securities to be kept separate from E*Trade’s own assets.
E*Trade takes it a step further with its Complete Protection Guarantee. This guarantee promises to repay any losses caused by unauthorized activity in your accounts. It also promises not to sell your personal details to third parties or marketers.
E*Trade’s safeguards include dedicated fraud teams, firewalls, and encryption. E*Trade also offers optional security features like two-factor authentication (2FA) and text or email alerts.
Top Rated Brokers
Is E*Trade a Scam or Legitimate? The Verdict.
All signs point to E*Trade being a legitimate company. It operates under strict regulation and seems to prioritize customer safety. E*Trade offers insurance coverage, multiple security measures, and is well-regarded in the brokerage space.
Website
On E*Trade’s website, Power shows up as a browser platform. It provides strong charting with over 100 technical studies. It also supports 10 chart styles and multiple drawing tools, and charts can be viewed in a separate window.
The same order ticket from the mobile app is here, too. A nice perk on the browser platform is the built-in profit/loss diagram on the order ticket. It visually shows your maximum gain and loss for any trade.
Beyond Power, the website offers other helpful tools. A search box in the top-right corner helps you find securities by ticker symbol or name. There’s also an order ticket for those who prefer using the standard site instead of Power.
Desktop Platform
E*Trade’s top offering is Pro, a desktop platform. You need at least $1,000 in your account to use it. Real-time quotes are also needed but are free for non-professional traders.
After installation, Pro provides features not found on Power. It includes Level II quotes and direct-access routing, both missing on the browser platform.
Pro also delivers time & sales data, an economic calendar, a strategy scanner, advanced option features, and a margin calculator.
Other Tools
E*Trade goes further by offering an Apple Watch platform. Its mobile app is also compatible with tablets.
There is no E*Trade app for Apple TV or any skill for Amazon devices.
Find a Financial Advisor
If you are looking for a professional money management service in your area, you can
find a Financial Advisor on the Wiser Advisor
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Wiser Advisor review).
Visit Wiser Advisor
Exchange-Traded Funds
E*Trade’s site has a helpful ETF section with most active funds and top U.S. equity performers. Another area displays the top five performing categories. During our review, these categories were technology, health care, large-cap growth, mid-cap growth, and small-cap growth.
There's also an ETF All-Star List, with the same pricing and function. Like mutual funds, you can buy pre-built ETF portfolios at no charge.
A category analysis tool provides heat maps for major categories across different time periods. Another handy feature is a comparison tool that shows key data side by side.
Retirement and Taxable Accounts
Beyond regular taxable individual accounts, E*Trade also provides joint and custodial accounts. For retirement, it offers Roth, SIMPLE, SEP, traditional, beneficiary, and minor IRAs. E*Trade’s Complete IRA is for people over 59½ who want to begin withdrawals from an IRA.
You can roll over a retirement plan from a former employer. For the self-employed, E*Trade has solo 401(k) plans. Parents saving for college costs can open a Coverdell Education Savings Account.
E*Trade charges three IRA fees: $25 each for early withdrawals, excess contributions, and recharacterizations.
Cash Management Features
Along with its brokerage offerings, E*Trade also has its own bank called E*Trade Bank. It is FDIC-insured and has some decent perks. Max-Rate Checking pays 0.05% interest, plus unlimited ATM fee refunds nationwide. It has a $15 monthly fee, though there are ways to avoid it. Bill pay and your first pack of checks are free.
If you don’t like the low checking rate, you can get E*Trade’s Premium Savings Account, which pays a solid 1.75% APY and doesn’t charge a monthly fee.
Other Services
E*Trade has a free Dividend Reinvestment Plan that reinvests cash payouts into more shares of the same securities. You can enroll a single asset or your whole account.
The broker also provides an automatic mutual fund investment option. You can set it up to regularly invest more money into mutual funds.
E*Trade gives data on global stock markets, but it doesn’t offer international stock trading.
E*Trade Comparison
E*Trade has done well in everything we’ve checked, but it does lag behind other brokers in some areas. For example,
Firstrade
charges $0 for all mutual funds and no contract fees on options.
Charles Schwab doesn’t have restrictions on its desktop platform and offers more branch locations than E*Trade. Meanwhile, Fidelity has no IRA fees.
Interactive Brokers offers forex, precious metals, and foreign stocks—none of which E*Trade has.
Fidelity has an Apple TV app, and Charles Schwab offers an Amazon Echo skill.
Recommendations
Beginners: Thanks to its great customer service, branch offices, and educational resources, E*Trade is a solid choice for new traders.
Mutual Fund Investors: E*Trade is definitely one of the top choices for mutual fund trading.
Individual Retirement Accounts: We don’t like E*Trade’s IRA fees. Firstrade is a better option.
Active ETF and Stock Trading: We recommend E*Trade for frequent traders who have at least $1,000 to start.
Charles Schwab might be a better pick for some.
Long-Term Investors and Retirement Savers: With target-date mutual funds, financial planning,
and 401(k) plans, E*Trade is also a good choice for those with a long-term horizon.
Small Accounts: Because it has no minimum
balance, E*Trade is a decent option for taxable accounts.
E*Trade Review Summary
E*Trade is one of the most recognized brokerage firms in America. Though it has fewer total assets than some competitors, it holds its own against them.
Updated on 1/16/2025.
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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