Welcome back to the third in a series of reviews of online brokerages that I have used in the past or currently use. Today I am discussing my Etrade review. I have used their platform extensively in the past and am very familiar with their offerings from my days in the online brokerage industry. If you would like to check out my previous brokerage reviews, you can do so here:
As I shared in both of those 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, Etrade has been a fairly big player is the discount brokerage industry 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 their Etrade baby commercials over the years. Let’s move on with some of the nuts and bolts of their offerings.
Related: check out my OptionsXpress review for another solid online brokerage option.
The Trading Platform: I grade the trading platform at Etrade as one of the best trading platforms available. It is intuitive and user friendly when it comes to placing trades and finding information. 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 requisite 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 monthly or quarterly fee. 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 quite a bit of research and tools that can help you with retirement planning. Their free educational offerings help you better strategize your investing in the stock market.
Solid Offering of Mutual Funds: If you’re looking to invest in mutual funds then you’re likely going to be happy with Etrade. 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 they do have a commission associated with them, it’s competitively priced at $19.99 as opposed to upwards of $50 at other 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 and have a nice chat feature. Their branch network is also a nice added plus.
Low Initial Minimums: Etrade is among the best in regards to a minimum amount 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.
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 nice feature to have if that’s something you’re looking for.
Disadvantages of Etrade
Commissions: The only real problem I have with Etrade is their commission structure, as it relates to stock trades. Like I said earlier, $9.99 is definitely competitive, but it’s near the high end of that range. 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.
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.
What’s My Take on Etrade?
I think for most, Etrade is a definitely a worthwhile option to consider if you’re looking to invest in the stock market. They do have a solid amount of offerings and have some 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.