The Challenge
Investors looking for a brokerage firm probably have heard of both Fidelity Investments and Etrade. With billions of dollars in assets, they tend to attract a lot of interest.
So which broker is better - Fidelity or Etrade? This following contest will provide the answer.
Costs
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Etrade
|
$0
|
$19.95
|
$0 + $0.65 per contract
|
$0
|
$0
|
|
Fidelity
|
$4.95
|
$49.95
|
$4.95 + $0.65 per contract
|
$0
|
$0
|
|
Firstrade
|
$0
|
$0
|
$0
|
$0
|
$0
|
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
Etrade
|
|
|
|
|
|
|
|
Fidelity
|
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|
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Firstrade
|
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Commissions and Account Minimums
Etrade’s standard fee for ETF and stock trades is $0, while Fidelity charges $4.95.
For options, Fidelity customers pay an extra $0.65 per contract, while Etrade charges $0.65 ($0.50 for traders making 30 or more trades in a quarter).
Using a human broker to place a trade at Fidelity is $32.95, while doing the same at Etrade is a considerably lower $25.
Fidelity gives its customers 500+ commission-free ETF's, while Etrade has all of them commission-free.
Accounts at both brokers come with no maintenance fees or inactivity fees. Fidelity has
a minimum initial deposit requirement of $2,500, while Etrade carries a $500 minimum. IRA's are available at both firms without any account fees.
The first category goes to Etrade.
Mutual Funds
Fidelity offers its clients over 10,000 mutual funds. Less than a thousand carry no-load and no transaction fee. Investors who trade a transaction fee
fund will be set back $49.95.
Etrade has more than 8,000 mutual funds, of which 1,300 are available with no-load and no transaction fee. Mutual funds that carry a transaction fee are $19.99.
Etrade wins here.
Can You Buy Fidelity Funds Through Etrade?
For investors who are wondering "Can I buy Fidelity funds through Etrade?", there is an article exploring this topic in detail
under this link.
Research and Education
There are plenty of educational and research tools on Fidelity's web site. Customers have access to free reports from several third-party researchers,
such as Morningstar, S&P Capital IQ, Zacks, and others. The broker has a virtual learning center
where traders can access videos, webinars, and articles on a wide range of investment topics. Fidelity also offers a useful research tool for corporate
bonds and other fixed-income securities.
Etrade offers an array of research and educational resources for its clients. Traders have access to on-demand videos, articles, and in-person seminars.
Many topics are covered, such as options, fixed-income, and IRA’s. The broker has several good screeners for all major securities: options, stocks, ETF's,
bonds, and mutual funds.
Fidelity takes this category.
Customer Service
Fidelity offers service via an on-line chat system, e-mail, fax, and phone. The phone service is available around the clock. Fidelity also offers a list of
more than 100 phone numbers in foreign countries for customers who travel outside the United States. Currently, the broker has more than 180 branch locations in the U.S.
Etrade also has retail locations, but only thirty. The firm offers telephone customer service around the clock.
Fidelity wins this category.
Trading Tools
Etrade's web site is well designed and user friendly. The company's Total Trade Ticket, available within the web browser, can be used to place orders for
stocks, ETF’s, and options. More sophisticated platforms are available, but only for frequent traders. Etrade MarketTrader is a browser platform, and
Etrade Pro is desktop launched.
Fidelity customers will find many useful tools at the broker's web site, including portfolio analysis tools and good charting capability. Placing trades
is trouble-free with the broker's web browser platform, which includes a handy trade ticket. Fidelity also offers its clients Active Trader Pro, a sophisticated
trading system for investors placing 36 or more trades in a rolling twelve-month period.
Too close to call in this category.
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Mobile Platforms
Mobile applications for Android, Apple, and Windows Phone 8 are available at Fidelity. The interface is intuitive and easy to learn. Many features are available:
customers can transfer funds, contact customer service, make a mobile check deposit, pay bills, and place trades.
Etrade has mobile platforms for Windows phone, iPad, iPhone, Android phone and tablet, Amazon Fire phone, and Kindle Fire HD. The interface is easy to navigate.
Many useful features are available, such as charts, mobile check deposit, videos, and a trade ticket.
Etrade wins this category due to its CNBC video library.
Banking Features
Fidelity offers its customers the Cash Management Account. It has checks and a Visa Gold
debit card free of charge. Moreover, the account offers FDIC protection up to $1,250,000, five times the usual amount. It does this by allocating the cash
balance in up to five separate program banks, each bank offering the regular $250,000 insurance. Additionally, Fidelity reimburses all ATM fees incurred in
the Cash Management Account.
Etrade has an FDIC-insured bank that offers a checking account with the standard $250,000 protection.
The account comes with a Visa debit card and checks; and it can be linked to an Etrade brokerage account. The broker rebates ATM fees only for clients who have
a balance of at least $5,000, or who have combined balances across all Etrade accounts of $50,000 or more.
Fidelity wins in this category.
Additional Features
Fidelity offers its customers global investing opportunity. Investors can trade on 25 foreign exchanges using 16 currencies. Disappointingly, Etrade recently
pulled the plug on both its forex and international investing services. However, it continues to offer futures trading at $1.50 per contract. Fidelity does not
offer any futures services.
Overall, it's a dead heat here.
Etrade vs Fidelity: Which is Better?
There were two ties, Fidelity Investments came out ahead in three categories, and Etrade was victorious in three
categories. It's a tie.
We recommend Fidelity for buy-and-hold investors as well as for anyone wanting to invest mostly in Fidelity's
own family of mutual funds and ETF's.
Etrade is our recommended broker to beginner investors and for IRA accounts. Value oriented investors can find a better deal at the
$0 commission broker, Firstrade.
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