Online Brokerages I’ve Used: Etrade Review
Even if you don’t actively invest, you’re pretty certain to know about Etrade. Due to my experience in the online brokerage industry, I’ve been able to deal with many of the major firms out there. Etrade is one of those online brokerages I have extensive experience in working with and dealing with their platform. With that in mind, I have written the following Etrade review as a hopes of helping you out if you’re considering E-trade to manage your investing needs. If you would like to check out some of my previous brokerage reviews, you can do so below:
As I have shared in past brokerage review posts, there are many online brokerages to choose from and they all have offerings that set them apart from the next one. Many of them claim to be among the best online brokerages but some do not measure up when you look under the hood. Ultimately, if you’re looking to invest in stocks and have a fairly simple approach, then it really just comes down to price and how you like their offerings.
All that said, E-trade has been a fairly big player is the discount brokerage space over the past few decades and most people will probably know them thanks to their talking baby ads. Etrade started roughly 30 years ago and is known by many thanks to the aforementioned Etrade baby commercials over the years. Let’s move on with a review of Etrade and see what they have to offer in terms of products and services.
The Trading Platform: I grade the trading platform at Etrade as one of the best trading platforms available in the industry. It is intuitive and user friendly when it comes to placing trades and finding the information you need. At $9.99 per stock trade and $9.99 plus $.75 per options contract, its prices are competitive within the online brokerage space.
Free Streaming Quotes: Like Scottrade, Etrade’s streaming quotes are free. Once you open the account and fill out the required paperwork you can access free real time quotes. As someone who likes to have that feature, it’s nice to access without having to pay some sort of fee to have access to them. Since I like to watch the stock market, I will generally not invest with a broker who charges for streaming quotes.
Forex/Futures Trading: This is a nice little feature that is not offered at every online brokerage. I will caution that Forex and Futures trading is not for everyone and does have its own unique set of risks associated with it. However, it’s a great feature that I think helps set Etrade apart from some of the other brokerages in the industry.
Advantages of Etrade
Powerful Trading Tools: Not only is Etrade’s trading platform very user friendly, but they also offer a good bit of research and tools that can help you with retirement planning. Their free educational offerings can help you better assess what kind of strategies to put in place in order to better manage your investing needs.
Solid Offering of Mutual Funds: If you’re looking to invest in mutual funds then you’re going to be pretty happy with E-trade. They’re very competitive in regards to mutual fund offerings as they offer over 8,000 mutual funds, of which, 1,300 are no load, no transaction fee funds. If your mutual fund of choice does have a commission associated with it then it’s competitively priced at $19.99 instead of $50, which is what you’ll find at other major brokerages.
Customer Service: Having worked in customer service for a number of years I recognize good customer service when I see it. Every time I have interacted with someone from Etrade I’ve had a great experience. They’re also open 24 hours a day, which unfortunately is not all that common, and have a nice chat feature. Etrade also has a branch network of several dozen branches throughout the country that are open to help you with your account problems or investing needs.
Low Initial Minimums: Etrade is among the best in regards to the minimum amount needed to open an account. If you’re opening a standard account then the minimum is $500 or $2,000 if you’re looking to open a margin-enabled account. Having worked in the industry myself, that is among one of the lowest minimums needed to open an account there is.
Access to Foreign Markets: Along with the aforementioned Forex/Future trading this also really helps set Etrade apart. They have access to stock trading in Canada, France, Germany, Hong Kong, Japan and the UK. I am not terribly certain how competitive their pricing is in relation to that, but it is a great feature to have if that’s something you’re looking for.
Related: If you’re looking for another online brokerage option then check out my Scottrade review.
Disadvantages of Etrade
Commissions: The only real issue I have with E-trade is their commission structure, as it relates to stock trades. Like I said earlier, $9.99 is definitely competitive, but there are others in the online brokerage space that are cheaper. That said, there is always the option to try and negotiate the commission. They do offer a lower commission structure at $7.99 per trade, but you have to place a certain number of trades each quarter to qualify for that. With that in mind though, I always like to look at the value being delivered and in the case of E-trade there is good value for that price.
You Need to be an Active Trader to get their best Platform: Their most robust platform, Etrade Pro requires you to place at least 30 stock or options trades per quarter. That may not be an issue for many, but if you don’t trade often enough then it won’t be an option for you. Again, if you don’t trade often this should not be a concern, but if you’re wanting to not deal with that minimum trade level, you can look at platforms like OptionsHouse or OptionsXpress as justifiable alternatives.
What’s My Take on E-trade?
I think for most, Etrade is a definitely a solid option to consider if you’re looking for a place to manage your investments. They do have a solid amount of offerings and have high quality tools to use. They offer a good number of mutual funds and commission-free ETFs. If you’re looking for a great online brokerage that has some good offerings, then Etrade may be for you and you can usually have your account opened online within 15 minutes. One nice thing to keep in mind is that they offer very good promotions for opening a new account such as free trades at account opening or even a cash bonus if you start with different deposit amounts.
*Updated from original posting on May 22, 2013