The Challenge
In response to E*Trade’s new $0 equity commission, Fidelity now offers zero trading fees as well. But are these
two brokerage firms the same in other areas? If you continue reading, you’ll find the answer.
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
|
|
Ally Invest
|
$0
|
$9.95
|
$0.50 per contract
|
$0
|
$0
|
Services
Promotions
E*Trade:
Get zero commission on stock and ETF trades.
Fidelity: Get 500 free trades with $100,000+ deposit.
Ally Invest:
Up to $3,500 cash bonus + $0 commission trades.
Category #1: Tradable Securities
Investors at Fidelity have a large selection of assets to buy and sell. Of course there are stocks (including penny and OTC), fixed-income securities (including CDs), option contracts, mutual funds, ETFs, and closed-end funds. Fidelity also offers IPOs, annuities, and insurance products.
E*Trade customers get the same selection of assets minus the annuities and insurance products. In their place, E*Trade offers trading in futures, something completely absent at Fidelity.
Overall, it’s pretty even here.
Category #2: Mobile Trading
Fidelity’s clients can buy and sell securities (plus a host of other tasks) with the firm’s mobile app. On top of stocks and ETFs, options and mutual funds can be traded. During our investigation, we found a mobile check deposit tool and a unique PayPal transfer system. Both were simple to use. We also liked the incorporation of Bloomberg video news, and high definition is an added bonus.
Charting on Fidelity’s app comes with a horizontal mode and some important tools, such as technical studies, multiple display styles, indicators, comparisons, and extended-hours price action.
After investigating Fidelity, we went to see what E*Trade had to offer. The first difference we found was that the latter broker had two apps. Futures can be traded on one of them. Level II data is available, something that is absent at Fidelity. Bloomberg makes an appearance, and we were impressed with the number of duration choices on the trading ticket.
E*Trade gets the nod in this category.
Category #3: Websites
After logging into Fidelity’s website, we discovered both robo and human chat services. We didn’t need to use either of them because navigation is uncomplicated. Charting on the site delivers lots of technical indicators, graph styles, and company events. We also liked full-screen mode. Standard features like alerts and multiple watchlists are available on top of bill pay and notes.
The site’s security order form pops out to the left side of the screen; it offers a few advanced order types, extended hours trading, and multiple duration options.
A final tool we liked on Fidelity’s site is Full View, which is able to display balances from external financial accounts.
Over at E*Trade, we found a similar order form with multiple order types and duration choices, including extended hours. Charting also is on a similar level as Fidelity’s software with full-screen mode and various tools. As with Fidelity’s site, there is no trade bar at the bottom of the screen, something we would like to see.
The biggest difference between the two firms is the absence of a browser platform at Fidelity, something that E*Trade does have. Called Power E*Trade, the program offers a very advanced order ticket and the ability to trade futures.
The browser platform gives E*Trade the victory here.
Category #4: Desktop Trading
Both companies in this challenge offer desktop software. Fidelity’s has no account minimums or trading requirements. E*Trade customers must have at least $1,000 in assets.
Called Active Trader Pro, Fidelity’s software delivers Level II data and direct access to market venues. We found the charting program to be very good with all the bells and whistles like technical studies and drawing tools.
There are several option tools, and extended-hours trading is possible. One feature we really liked during our testing was a multi-order trading ticket (up to 20 orders can be sent simultaneously).
E*Trade Pro is E*Trade’s software. It offers a lot of the same features that Fidelity’s does: Level II data, direct-access routing, live streaming of Bloomberg, and advanced charting. Besides option chains, futures chains are also integrated. Alerts and an economic calendar make an appearance as well.
E*Trade’s account minimum gives Fidelity the advantage in category #4.
Category #5: Funds
Both broker-dealers in this competition offer mutual and exchange-traded funds. During our investigation, we found lots of resources on both websites for fund traders. Fund picks from each broker are available free of charge. While Fidelity manages its own lineups of ETFs and mutual funds, E*Trade does not.
With Fidelity’s mutual fund screener, we found 10,053 funds that were open to new investors. Doing the same research at E*Trade yielded 8,621 products.
We’ll take Fidelity.
Category #6: Education & Research
Neither company has failed to remember the need for information in financial markets. We were very impressed with Fidelity’s education center on its website, which offers infographics, courses, articles, and videos on a wide range of vital topics. How to place an options trade and the basics of fixed-income investments are two examples of learning materials we found.
Stock profiles have lots of data points. ESG scores, social sentiment, and equity reports are just a few examples. We found 16 for ExxonMobil.
Over at E*Trade, stock profiles have a good amount of information, although somewhat less compared to Fidelity. For example, we found 10 reports for ExxonMobil. Nevertheless, we really did like E*Trade’s security screeners, which are user-friendly.
Fidelity takes another victory.
Category #7: Global Investing
At one point in the not-so-distant past, E*Trade was known in the brokerage industry to be the place to go for access to global stocks. But it has since shut down its international investing service. Fidelity does offer a global account with 25 foreign exchanges.
Obviously, Fidelity wins here.
Category #8: Other Services
Do you want to turn dividends into more shares of stocks and ETFs? You can sign up for a free DRIP service at either Fidelity or E*Trade.
Are you planning to save for retirement? Both firms in our contest offer Individual Retirement Accounts. Be advised that E*Trade has some $25 IRA fees that Fidelity doesn’t have. Individual 401(k)s are also available at both brokerage firms.
Would you like to set up perpetual deposits into mutual funds? Both companies offer that service, too.
E*Trade loses due to its IRA fees.
Finally, Our Recommendations
Mutual Fund Traders: Go with Fidelity. Besides the broker’s larger list, we also like Fidelity’s 0.00% expense ratios, available on some funds.
Beginners: We suggest Fidelity over E*Trade for the former’s learning materials, which are a little more comprehensive.
Retirement Savers: Our pick is Fidelity.
Trading Tools: Skip E*Trade’s account minimums and go with Fidelity.
ETF and Stock Trading: Pretty even here.
Promotions
E*Trade:
Get zero commission on stock and ETF trades.
Fidelity: Get 500 free trades with $100,000+ deposit.
Etrade vs Fidelity: Which is Better?
Fidelity is the outperformer, taking home the majority of categories. Despite E*Trade’s loss, futures traders can
find a good value there, especially with free access to Power E*Trade. Anyone looking for $0 commission trades not
just on stocks but also on mutual funds and options should also take a look at
Ally Invest.
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