Etrade Account Review: Brokerage Fees, IRA Investing, Pros and Cons, Mutual Fund Offerings

Etrade Review - Pricing

  • $6.95 per stock/etf trade ($4.95 if making 30 plus trades per quarter)
  • Options: $6.95 plus $0.75/contract ($4.95 plus $0.50 if making 30 plus trades per quarter)
  • No-load mutual funds: $19.99
  • Futures: $1.50 per contract, per side + fees
  • Forex: markup or markdown will be included in the prices quoted
  • Bonds: $1 per bond (minimum $10, maximum $250)

Etrade Important Fees and Surcharges

  • Extended hours surcharge: $0.005 per share surcharge on extended hours trades (ECN fee) and on trades executed through E*TRADE Pro at an ECN during both regular market and extended hours sessions
  • Large order surcharge: $0
  • Penny stocks surcharge: $0
  • Transfer (out) of assets: full - $60 per account, partial - $25 per account
  • IRA setup fee: $0
  • Annual IRA fee: $0
  • Maintenance fee: $0
  • Inactivity fee: $0

Etrade Advantages

  • Great trading platform
  • No account maintenance or inactivity fees
  • Good research tools
  • Low investment to open an account - $500 to begin investing
  • Fee-free retirement accounts
  • Free automatic reinvestment of dividends

Etrade Disadvantages

  • Expensive commissions on options
  • Advanced trading platform, Power Etrade Pro, is only available to those executing 30 stock or options trades during a calendar quarter
  • Customer service responsiveness depends on the size of account and frequency of trades
  • First transfer holds your funds for nearly two weeks

Etrade Account Types

  • General Investing
  • Employee Stock Plans
  • Business
  • Corporate / LLC
  • Trust & Estate
  • Investment Club
  • Managed Investment Portfolio
  • Unified Managed Account

  • Rollover IRA
  • Traditional IRA
  • Roth IRA
  • IRA for Minors
  • Complete™ IRA
  • Beneficiary IRA

  • Custodial
  • Coverdell

  • Complete Savings
  • Money Market
  • Max-Rate Checking
  • E*TRADE Checking
  • Mortgages

  • Power E*TRADE
  • Futures Trading

  • Individual 401(k)
  • Money Purchase
  • Profit Sharing
  • Investment-Only Non Custodial

Etrade Review

Etrade Securities LLC, the discount brokerage owned by Etrade Financial Corporation, is one of the largest online brokers in the U.S. They specialize in servicing self-directed investors, those who make their own investing and trading decisions. Etrade competes with other discount brokerages such as TD Ameritrade, Fidelity Investments, Merrill Edge, Charles Schwab, Scottrade, and Ally Invest.

When evaluating a discount broker, commission rates and fees are a priority, but other services should be considered as well. Online brokers have evolved to the point where most of them offer a full line of financial products and services comparable to what traditional full service brick-and-mortar brokers offered before the advent of the computerized trading revolution in the 1990s.

Etrade has grown and refined its line of products and services as it tries to keep pace with the demands of modern online investors. Below are some of the key features of an Etrade brokerage account.

Etrade Pro

Etrade Pro is the flagship web-based trading platform offered by Etrade. It's a customizable, one-stop resource for placing and executing trades; researching securities; monitoring stock news, accounts, portfolios, and watch lists; consulting historical charts as well as real-time charts; and conducting stock screens and developing trading strategies. Also, Etrade Pro provides access to live streaming TV channel and on demand videos from CNBC.

Etrade Review 2017

Margin Rates

A big consideration for individuals who trade using margin is the interest rate charged on margin balances. These rates tend to be hidden by the brokers and forgotten by the investors. For traders with high margin loan account balances, margin interest can be a heavy drag on a portfolio. Etrade's margin rates, like most brokers' rates, are tied to a floating interest rate such as the "broker call loan rate," and fluctuate as interest rates rise or fall.

Etrades margin rates are at the high end of the spectrum among discount brokers, but they offer reduced rates for larger margin loan balances, which brings the rate to the middle of the pack for heavy hitters with $1,000,000 or more in loan balance.

Free Trades

There may be no such thing as a free lunch, but some online brokers offer incentives to new customers such as commission-free trades for the first month or two. Other brokers will offer cash incentives such as rebates for transferring money into a new account.

Etrade offers a competitive incentive package of free trades for the first 60 days after an account is opened, plus up to $600 for transferring outside money into an Etrade account.

Commissions and Fees

Etrade's commission structure falls at the high end of the spectrum for infrequent traders, so those higher costs should be weighed against the added value Etrade offers in terms of amenities and customer service. Frequent traders (those making over 30 trades per quarter) get a much better pricing at Etrade.

Comparison of Brokerage Fees

Service, Commission, or Fee Range of most-popular brokers Etrade pricing Comparative cost vs. range for Etrade
Minimum Investment to Open an IRA $0-$2,500 $500 Lower than median
Fee to Open an IRA $0 $0 Lowest
Annual Custodian Fee $0-$20 $0 Lowest
Market order stock trade $6.95 $6.95 Highest
Limit order stock trade $6.95 $6.95 Highest
Option –1-contract $8.25-$21 $10.74 Lower than median
Option—10-contracts $15.45-$30 $17.49 Median
Mutual Fund— No load funds $0-$49.99 $0 Lowest
Mutual Fund— Transaction fee funds $0-$76 $19.99 Lower than median
US Treasury securities $0-$25 $0 Lowest
Corporate Bonds or similar $1-$38 $1/bond, minimum $10 Lower than median

Source: individual brokerage websites. Comparative brokerages are: Ally Invest (best priced), TD Ameritrade, Charles Schwab, Fidelity Investments, and Vanguard.

Mobile Apps

With the explosion in popularity of smart phones and tablet computers, mobile trading has become more important for active individual traders. Most online brokers offer mobile trading apps for clients. Etrade's mobile app is highly regarded and has been an innovative leader. It works with Android, Apple, Amazon, and Windows devices.

Trade Frequency

If you're an active investor who makes a large number of trades per month (dozens vs. less than ten, for example), the overall commission and fee structure becomes important. Some companies will offer volume trading commission discounts, while others may not. An individual executing 200 trades per month and carrying a high margin balance may pay $2,000-$3,000 in commissions to a high commission brokerage. Trading with the same frequency with a low commission brokerage may cost less than $1,000. To all but the wealthiest investors, this difference is substantial.

Etrade offers discounted pricing to customers that execute at least 30 trades per quarter: $4.95 for stock and ETF trades, and reduced, $4.95 ticket charge plus 50 cent contracts for options traders.

Etrade Review 2017

Customer Service

When something goes wrong with a trade or you have trouble with your account or the trading platform, excellent customer service will often save the day. Etrade has earned a reputation for quick, responsive customer service over the years, so those who place a high value on service should consider this broker.


Etrade is a major player in the discount brokerage field. Commissions on equities and options are higher than average which will turn away many investors. If cost is not the deciding factor, Etrade is a solid option for a discount broker that offers a wide variety of amenities and services.

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Etrade Reviewed by on . Rating: 3
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