E*TRADE is one of the leaders in the discount brokerage space. In fact, they’re one of the pioneers in the space. This E*TRADE review will help you see if the products and services they offer will help meet your investment needs. Thanks to their maturity in space, E*TRADE can offer things other lower priced brokers aren’t – such as trading in foreign markets, futures or forex trading and over 110 commission free ETFs.
E*TRADE has been in the discount brokerage space for over 30 years. As mentioned prior, E*TRADE has used its maturity to grow a rather robust platform you won’t see with other discount brokerages – thus making it possible to handle all of your investing in one location.
The commission at E*TRADE is a bit more than you’d find at most other brokerages, coming in at a flat $6.95 per trade. This still puts E*TRADE in the competitive range, especially when you take more full-service online brokers like Schwab or TD Ameritrade into consideration. With some background out of the way, let’s move on to the review of E*TRADE.
E*TRADE has one of the more competitive fee structures in the discount brokerage space, all things considered.
Stock Trades – $6.95 per stock trade. This is a bit higher than I like to see but still very competitive.
Option Trades – $.75 per option trade, plus the $6.95 standard commission.
Mutual Funds – $19.99. This is a great rate if you like to invest in mutual funds. Most other online brokers charge at least $50 for the same thing.
No Activity Fee – Unlike TradeKing, E*TRADE does not charge an inactivity fee. This is great to see, in fact, E*TRADE has no hidden fees.
With the fee structure out of the way, it’s time to move on to some of the features at E*TRADE.
- Killer trading platform. Not every online brokerage has a quality trading platform. E*TRADE does. When you compare it against discount brokers like OptionsHouse, E*TRADE stands apart and provides one of the best trading platforms you’ll find.
- Free streaming quotes. This should be a given in today’s fast-moving market climate, but it’s not. After filling out some simple paperwork, E*TRADE offers free streaming quotes.
- Futures/Forex trading. Like TradeKing, E*TRADE delivers futures and forex trading. Both investment options carry significantly higher risk than simple stock investing. E*TRADE charges $2.99 for futures trading, which is very competitive. There’s no charge on forex trading as E*TRADE is compensated on the bid-ask spread.
- Branch network. Like Scottrade, E*TRADE has a branch network. The network at E*TRADE is smaller with about three dozen stores nationwide, but a brick-and-mortar store is still a great feature to have if you live close to one.
E*TRADE is one of the best discount brokers in the industry. They have a wide range of options for the long-term investor to the active trader alike. Below are some of the advantages of investing with E*TRADE:
- Powerful platform. This was listed as a feature though it’s also an advantage to E*TRADE. I’ve seen many trading platforms, E*TRADE stands above most in what it has to offer in terms of flexibility, user-friendliness, intuitiveness, speed, and reliability.
- Low initial minimums. E*TRADE has one of the lower initial balance requirements in the industry, requiring only $500 to open an account. If you want to open an IRA with E*TRADE, they require no initial minimum. This is a great option for those wanting to rollover their old 401(k) plans.
- Healthy mutual fund offering: E*TRADE provides access to over 8,000 mutual funds, with 1,300 of them being no-load, no-transaction fee funds. If you prefer the ETF alternative, E*TRADE has over 110 commission-free ETFs.
- 24/7 Customer Service: This should be expected of online brokers, but it’s rare. E*TRADE has excellent 24/7 customer support as well as a live chat option for clients who prefer it.
- Broad investment options: Some discount brokers only allow access to stocks, options and maybe mutual funds. E*TRADE offers significantly more with trading in foreign markets (Canada, France, Germany, Hong Kong, Japan and the UK), bonds, Treasuries, CDs, and even bank accounts.
- Managed accounts. This is a feature that sets E*TRADE apart from other brokerage firms. If you have an account value of at least $25,000, Etrade offers managed accounts for those who want someone to manage and oversee their investing.
- Extensive research. As a full-service company, E*TRADE offers access to third-party research and reports from financial news outlets such as Morningstar and Reuters. If you like to research investments with analyst reports, this is a great resource to have.
No online broker is perfect, and that’s the case with E*TRADE. Following is the main drawbacks E*TRADE could improve upon:
- Commissions. E*TRADE is definitely in the competitive range for commission, especially when you consider the number of services and investment options clients are given access to. However, E*TRADE’s commissions are still a bit higher than a few other brokers. E*TRADE does offer a lower commission of $4.95 for those trading at least 30 times per quarter. Nonetheless, if you are a buy and hold investor, the price per trade shouldn’t make that much of a difference, though makes a great opportunity for those who want to negotiate a lower commission.
- Two platforms. The standard E*TRADE platform is very robust. However, the company also offers a more robust platform to those who have at least $250,000 in assets or place 30 trades per quarter. While separate platforms aren’t ideal, it’s not uncommon in the industry. Again, if you’re a buy and hold investor, this shouldn’t matter much.
E*TRADE Review – The Final Analysis
For the right individual, E*TRADE is going to be a great fit for your investment needs. Yes, the commission structure is a bit higher than some of their lower cost brethren. However, you need to look at the value received from that price. Looking at the number of investment options they have to offer, not to mention a robust platform, E*TRADE is one of the better discount brokers to consider.
Whenever you choose a discount broker, you need to take a holistic view of what they have to offer. The tools E*TRADE offers and the low minimum balance requirements make them a worthy option for many investors and traders.
If you want a stellar trading platform to manage all your investment needs, E*TRADE is worth looking at. With their excellent customer service, low account minimums, and diverse mutual fund offerings, Etrade is an excellent discount broker for beginning investors!