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ETRADE Automatic Investing Plan
2023: Does ETRADE offer automatic investment plan (AIP) contributions? ETRADE dollar cost averaging program (DCA)
setup and review. AIP/DCA fees on ETFs, stocks, and mutual funds weekly/monthly/quarterly recurring investing.
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Does E*Trade Offer an Automatic Investment Plan?
Setting up periodic investments at E*Trade is straightforward and trouble-free. And now with ETFs, there’s even more reason to try it out.
Overview of E*Trade’s Service
E*Trade customers can sign up for the broker’s automatic investing plan. This service allows investors to establish recurring purchases of mutual funds, ETFs, and Prebuilt Portfolios. Other asset classes like stocks are not eligible at this time.
Because recurring purchases are made with whole dollars, this is a convenient way to buy ETFs at E*Trade in fractional shares, something that’s normally not possible outside of a Dividend Reinvestment Plan.
Prebuilt Portfolios are groups of mutual or exchange-traded funds that can be purchased through E*Trade. They have four risk-reward classifications: aggressive, conservative, income, and moderate.
Because whole dollars are used in all of these trades, it’s a form of dollar-cost averaging. More shares will be purchased when prices are low.
There is no charge to enroll in systematic investing at E*Trade, and it’s really easy to do so online. We’ll show you how.
Enrolling in an Automatic Investing on E*Trade
To establish recurring purchases of a fund or Prebuilt Portfolio at E*Trade, log into the website and head to the top menu. Hover over the Trading tab and select Automatic Investing from the drop-down list. On the next page, you’ll see some information on how recurring investing works at E*Trade.
On this page, you’ll see three investment options. As already mentioned, they are ETFs, Prebuilt Portfolios, and mutual funds. Click on the purple “Get started” button under the asset class you want to invest in and follow the prompts to make an investment. There is no need to own any securities before signing up. You can make an initial purchase through the auto investing enrollment form.
The minimum initial purchase amount may differ from the minimum recurring investment amount. E*Trade’s minimum recurring investment amount is $25, but individual funds may have higher minimum initial purchase amounts.
On the enrollment form, you’ll need to specify the initial and periodic investment amounts, source of the cash, and investment frequency.
The investment frequency can be once a week, twice a month, once a month, once a quarter, semi-annual, or annual. The source of the cash can be the free cash balance in the brokerage account or an external bank account. This latter option will need to first be linked to the E*Trade account. If it hasn’t yet, the auto investing page has a link to add an external account. Just click on the drop-down menu for source of funding to add an account.
It’s possible to enroll multiple funds at the same time. Just click on the purple Add fund link on the enrollment page.
Not all mutual funds and ETFs are available for systematic purchases at E*Trade. There are exactly 100 ETFs and 4,218 mutual funds that are eligible.
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Searching for Funds
Instead of starting on the Automatic Investing page, it’s also possible to search for specific funds that can be used in E*Trade’s autopilot investing program. The broker’s mutual and exchange-traded screeners both have a search feature to scan for eligible funds for recurring investment. The relevant box is in the upper-left portion of the screener under the section labeled “Refine your search.”
The search tool will return a list of funds that can be used in the program. This list can be sorted by a variety of criteria, such as Morningstar rating and expense ratio. Results can also be filtered by adding more search variables. Examples include dividend yield, fund category, and performance.
Clicking on a fund’s name will generate a profile for the security. On the profile, there is a link to set up automatic investments. This link generates the same enrollment form discussed above.
Brokers With Automatic Investing
Editing, Pausing, or Canceling a Plan
After starting an Automatic Investing plan at E*Trade, it’s possible to edit it, pause it, or cancel it altogether. To do so, just go back to the Automatic Investing page on the E*Trade site mentioned above. There will be links there to manage a previous enrollment.
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Core Portfolios
Core Portfolios is E*Trade’s robo account program. This opens up another way to invest automatically at the brokerage house.
Cash deposits into a robo account can be set on autopilot. Deposits received are automatically invested into the account’s ETF portfolio, so simply establishing a recurring deposit schedule creates the systematic investing schedule.
And Don’t Forget DRIP Investing
E*Trade offers a Dividend Reinvestment Plan (DRIP), and this is yet another way to set up automatic purchases of securities. Stocks are eligible for this one. To enroll specific holdings or an entire account, head over to the Dividend Reinvestment section on the website. It can be located under the Accounts tab.
Account Types
E*Trade’s systematic investing service can be used in both joint accounts and retirement accounts. Be careful with IRS contribution limits on retirement accounts, though. Usual limits still apply.
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Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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