E*Trade vs Fidelity: The Challenge
Which brokerage firm should you choose, E*Trade or Fidelity? While Fidelity has global trading,
E*Trade has futures contracts. The differences just begin there. Keep reading for more details.
Costs
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Etrade
|
$0
|
$19.95
|
$0.65 per contract
|
$0
|
$0
|
|
Fidelity
|
$0
|
$49.95
|
$0.65 per contract
|
$0
|
$0
|
|
Firstrade
|
$0
|
$0
|
$0 per contract
|
$0
|
$0
|
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
Etrade
|
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Fidelity
|
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Firstrade
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Promotions
E*Trade:
Get zero commission on stock and ETF trades.
Fidelity: Get $0 stock commissions.
Firstrade: Get 2 FREE stocks and $0 commission in ALL trades!
E*Trade and Fidelity Are Even for Available Investments
E*Trade offers both self-directed and managed accounts. The latter are available in robo or human format. The cheapest option is of course the automated version, which costs 0.30% annually.
Self-directed accounts at E*Trade have access to a wide variety of tradable instruments. They are:
- Mutual funds
- Exchange-traded funds
- Closed-end funds
- Fixed income
- Option contracts
- Stocks
- Futures
Stocks include over-the-counter stocks but don’t include foreign stocks.
Fidelity subtracts futures contracts from the above list, and in their place, the broker adds trading on 25 foreign stock exchanges (inside of taxable accounts only) using multiple currencies. Countries include the United Kingdom, Japan, and Canada.
Like E*Trade, Fidelity also offers managed accounts in two varieties. Fidelity’s robo program is more expensive than E*Trade’s (it’s 35 basis points), but the first $10,000 in assets are managed free. Fidelity also uses funds (Fidelity funds to be exact) that have zero expense ratios. E*Trade uses non-E*Trade funds with expense ratios.
E*Trade Wins for Website Technology
During our research, we found Fidelity’s website easy to use. There are two quote fields in the top menu, and both deliver information on securities. Profiles include both buy and sell buttons that bring up a trade ticket with 8 trade types and 5 duration choices.
Graphs on the Fidelity site can be saved for later use, printed, or exported as an image or spreadsheet. A graph has a link to a video that shows how to use the charting software, and there are lots of tools. These include:
- Technical studies
- Comparisons
- Company events
- Drawing tools
Overall, Fidelity’s site has a lot of information on it, but it remains easy to use. The one downside is that Fidelity has removed its pop-out trade ticket.
E*Trade never did have a pop-out trade ticket, but it continues to deliver a browser platform, something that Fidelity has never had. Combined, both the website and trading platform deliver some really nice features, including:
- Advanced charting on a higher level than Fidelity’s software
- Order ticket with 10 trade types and 3 time-in-force options
- Professional-level trades like One-Triggers-OCO
- Simulated trading mode
For Mobile Apps, It’s a Draw
Besides its useful website, Fidelity has an excellent mobile app. Highlights include:
- Lots of market news with thumbnails
- Graphs with tools and horizontal capability
- Mobile check deposit
- Multi-leg option strategies pre-installed
- Beta version with simpler layout
- Live Bloomberg
- Help bot
- Check deposit
- Bill pay
E*Trade has two apps. Combined, they offer some of the same tools that Fidelity offers, like video news, mobile check deposit, a watch list, and alerts. Power E*Trade, which is the broker’s trading app with futures capability, has a demo mode, which Fidelity doesn’t offer. But E*Trade’s apps have no AI. They also don’t have pre-installed option strategies.
Fidelity Has a Slight Advantage in Desktop Trading Software
Active Trader Pro is Fidelity’s desktop platform. It has no minimum trading requirement or account balance. The software delivers quite a few useful features, including live financial news, advanced order tickets, full-screen charting, and very good widgets for option contracts.
Active Trader Pro has Level 2 quotes and time & sales data free of charge. Direct-access routing is another free service, and we really like the conditional trade ticket for an added professional-level feel.
E*Trade has its own desktop system. Called E*Trade Pro, this is another really good trading platform. A lot of the features, although not all, on Active Trader Pro will be found on E*Trade Pro. These include profit-loss diagrams, video financial news, high-level charting, advanced option tools, time & sales data, Level 2 quotes, direct-access routing, and so much more.
The one weakness E*Trade has in this category is a $1,000 account minimum to gain access to its desktop platform.
Fidelity Wins for Customer Service
Traders at Fidelity have a wide selection of customer support channels. The broker-dealer has agents on the phone 24 hours a day, 7 days a week. The Fidelity website has both robo and human chat widgets. The robo version is of course available all hours of the day and night, while the human chat service is available more limited hours.
Inside our Fidelity test account, we also found an internal e-mail system that can both send and receive messages, including attachments.
On top of a pretty stellar customer service record online and over the phone, Fidelity has well over a hundred branch locations in the lower 48 states.
E*Trade, by comparison, manages just 29 offices. Its website doesn’t have an outgoing message system like Fidelity has, and its robo chat tool isn’t nearly as effective as Fidelity’s. Moreover, E*Trade’s website has no human chat at all.
On the upside, E*Trade does have phone support around the clock, and its website has an extensive self-help section (so does Fidelity’s).
It’s Debatable in the Realm of Margin Trading
E*Trade’s website has a margin tool that Fidelity’s website doesn’t have. This resource can be found by going through these three clicks (Accounts -> Portfolios -> Margin). Typing in a ticker symbol here will generate margin requirements for that particular asset. Fidelity’s website has no such tool.
E*Trade customers pay margin interest according to the following scale:
|
Debit Balance
|
Margin Interest Rates
|
|
$250,000 - $499,999.99
|
7.70%
|
|
$100,000 - $249,999.99
|
8.20%
|
|
$50,000 - $99,999.99
|
8.70%
|
|
$25,000 - $49,999.99
|
9.20%
|
|
$10,000 - $24,999.99
|
9.45%
|
|
$0 - $9,999.99
|
9.70%
|
Fidelity has somewhat lower rates:
|
Debit Balance
|
Margin Interest Rates
|
|
above $1,000,000
|
4.750%
|
|
$500,000 – $999,999
|
5.00%
|
|
$100,000 – $499,999
|
7.325%
|
|
$50,000 – $99,999
|
7.575%
|
|
$25,000 – $49,999
|
7.625%
|
|
$10,000 – $24,999
|
8.575%
|
|
$0 – $9,999
|
9.075%
|
Cash accounts can easily be converted to margin accounts at both E*Trade and Fidelity.
Fidelity Wins in Miscellaneous Services
Individual Retirement Accounts: Both firms in this competition have several IRA types. E*Trade has more IRA fees.
DRIP Service: Both firms also offer dividend reinvesting at zero cost.
Extended Hours Trading: Pre-market and after-hours trading are available at both firms. E*Trade has 2 more minutes total than Fidelity. Plus, E*Trade offers overnight trading in a small list of ETFs, a great service that Fidelity doesn’t have.
Banking Tools: Checkwriting and debit cards are available at both firms. Fidelity has a better ATM fee refund system and a higher level of FDIC insurance ($1.25 million).
Initial Public Offerings: E*Trade and Fidelity both offer access to upcoming stock offerings.
Periodic Mutual Fund Investing: Once again, available at both brokerage houses. There is no charge for signing up at either firm.
Fractional Shares: Only Fidelity customers can buy partial shares of stocks and ETFs.
Finally, Our Recommendations
Mutual Fund Traders: With Fidelity’s fund screener, we found 9,601 funds. With E*Trade’s, we found 7,030. E*Trade has the better fund screener, though. Fund profiles are about even. Take your pick.
Beginners: Fidelity is our pick. Its educational library is a little more extensive. Plus, it has much better customer service with a larger network of branch locations. Its desktop platform also can be used in guest mode.
Retirement Savers: Both brokerage firms have good resources here, not least of which is old-school financial planning. Only Fidelity has annuities, but only E*Trade has a self-employed Roth 401(k). We would lean towards Fidelity because it has more brick-and-mortar locations.
Small Accounts: Fidelity’s robo accounts have no minimum (E*Trade requires $500). For self-directed trading, either broker will do, although Fidelity’s fractional-share service does create lower trade minimums. For IRAs, Fidelity’s no-fee structure is better for small accounts.
ETF and Stock Trading: For its fractional-share trading service, we lean towards Fidelity, although E*Trade’s browser platform Power is very good.
Promotions
E*Trade:
Get zero commission on stock and ETF trades.
Fidelity: Get $0 stock commissions.
Etrade vs Fidelity: Who is Better?
Both firms have strengths and weaknesses, although Fidelity appears to have an overall edge in
this survey.
Anyone looking for the top-rated brokerage firm on the market
should go with TD Ameritrade
or read TD Ameritrade review.
|