Online Brokerages I’ve Used: Etrade Review

ETrade

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: If you’re looking for another online brokerage option then check out my Scottrade review.

Etrade Features

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.

Trade Free for 60 Days at E*TRADE Securities LLC



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About the author:

I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. You can connect via Twitter / Facebook.

32 comments on “Online Brokerages I’ve Used: Etrade Review

        • That is a good point Charlie, but what I was referencing was not just putting everything into the 401k, but looking for tax diversification along the lines of a Roth IRA and not just a non-retirement account. If the 401k plan does not have good choices to choose from, I’d argue that the investor might be better served by opening a Roth to go along with the 401k and investing in some solid index funds. That said, it is hard to give a definitive answer not knowing the entire picture.

          The high commissions do hold many back and I completely understand that.

    • That’s hard to say FMM not knowing your entire situation. Are you doing any investing outside of your 401k? If no, then I would say a Roth could be a good option as you also want to remember about a tax diversification as well. If you are investing in a retirement account outside of the 401k then I would not be as quick to say yes. If you do want to take advantage of the up front tax savings then I would say, generally, stick any extra in the 401k.

    • That is a very valid point Greg, which is why I always try and negotiate the commission. That said, you also need to look at the value you’re receiving for that commission and look beyond the price tag.

    • As it is mine Joe. That seems to be their best platform and I think that barrier is just too much for many investors and can induce bad habits that’ll cost money now and in the long run.

    • I agree Kim. I worked for one of their main competitors and the argument was always we provide value with that price. I understand the value and think it’s very important, but being on the outer edge of competitive does cause them to lose clients.

  1. I’ve used ETrade for many years and really like its website. I tried Scottrade too and found it far less sophisticated. My only beef with ETrade is an “advisor” keeps phoning me even though I’ve told him repeatedly thanks but no thanks, mainly because I don’t want to argue with him about how much money we should have in equities. Fortunately his number shows up as an 866 call on my cell, so I don’t pick up. He never leaves a message. :)
    Kurt @ Money Counselor recently posted..Credit Sesame OverviewMy Profile

    • It’s great to get that perspective from an ETrade client. I have heard great things about their platform and like what I have seen of it. I hear you on their “advisor”…that drives me nuts. I’ll let you in on a little something you likely already know. They’re not really advisors, but a salesperson wanting to get you into a managed product or convince you to bring other outside brokerage accounts over to them.

  2. I use Firstrade and it has decently priced commissions. Unfortunately, they don’t offer nearly as many commission-free ETF’s as some of the other sites, but they do cover the major indexes, so that fits my needs. Plus, now it looks like you don’t have to go through any hoops or approvals anymore to sell cash-covered puts, which is my preferred method of purchasing stocks/ETF’s
    Mr. Bonner recently posted..Driving is more expensive than you might thinkMy Profile

    • I have heard of Firstrade but not a whole lot about them. That’s cool they’re going to allow you to do some cash-covered puts. I have been wanting to do that for some time and just need to start doing it.

  3. I really don’t trade that much, so the relatively high commission fees aren’t that important to me. With that being said, I also would rather NOT pay higher fees if I don’t have to. I have my 401k and employee stock purchase plan through Fidelity so I use them for now, but I’m open to testing out some other brokerages.
    DC @ Young Adult Money recently posted..How I want to make money – an overview and analysis of various ways to generate incomeMy Profile

    • We moved some of our accounts to Scottrade a year or so ago and really do like them. I agree that the higher commission is a big detractor for many.

    • That’s exactly what I have been talking about John…price isn’t always the best indicator of a good brokerage. I think it’s a much fuller picture that you need to take. In regards to OptionsXpress, I believe they’re the ones who were taken over by Schwab recently so I am not certain how much they have changed.

  4. I’ve used Etrade, Scottrade, and Zecco before. Pretty much consolidated everything into my Etrade account because they had the best options, easy management, good interface, and decent customer support. Scottrade was nice as well, and has local offices, but I was trading some penny stocks that they wouldn’t trade (smartly) and I moved stuff to Etrade to be able to trade them. The $10 isn’t so bad if you are doing larger monetary transactions. Supposedly Etrade has some of the fastest order executions. Zecco sucked, don’t use them.
    thepotatohead recently posted..Money Mistakes : Should I Have Retired From the Military?My Profile

    • Consolidation is definitely the way to go, especially if you have multiple accounts out there. Glad to hear that it has worked out for you with Etrade.

  5. I don’t actively trade but want to put some money into buying some shares and leaving it alone for a while. Is e trade the right place for me?

    • That’s a good question K! Not knowing the particulars of your exact situation, I’d say that it’s possible that they are. They have a great platform, plenty of tools and free educational resources and reasonable commissions.

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