E*TRADE review: Commission-free trading and automated investing — plus a sign-up bonus for new accounts

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  • E*Trade is best for frequent traders who are looking to start investing without having to meet high minimum account size requirements or pay commissions.
  • E*TRADE̵;s Core Portfolios robo-advisor platform supports passive investors who’ve got at least $500 to invest.
  • The brokerage offers close to 10,000 mutual funds; more than 4,400 are no-load mutual funds.

Is E*TRADE right for you?

E*TRADE is a competitive option for active traders looking for low-cost transactions and access to a large range of investments. Among those investments are roughly 9,000 mutual funds — more than 4,400 of which are no-load, transaction-free mutual funds. (No-load mutual funds are mutual funds that come without sales charges or commissions.)

E*TRADE also offers managed portfolios and automated portfolio management for those who prefer passive, or hands-off, investing, and it provides retirement accounts and bank accounts for individuals and small businesses.

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Average 401(k) balance

One downside to E*TRADE is that its $500 minimum opening deposit and annual fees for its automated account may be a bit high compared to other popular robo-advisors like Betterment and Ellevest (both have $0 minimum balance requirements).

Another drawback is that you’ll pay more for options contracts if you aren’t a frequent trader. For instance, if you make less than 30 trades per quarter, you’ll have to pay $0.65 per contract; you’ll pay $0.50 per contract if you make more than 30 trades each quarter.

If you’ve got any questions, though, you can always utilize E*TRADE’s 24/7 customer service support and/or live chat feature. 

Bottom Line: E*TRADE is a great fit for frequent traders looking to capitalize on a variety of long-term and short-term investment choices. The brokerage also offers a robust mobile app for Apple and Android devices, and it supports less active investors through its managed and automated portfolio offerings. 

E*TRADE
Editor’s rating  4.7 out of 5
Fees 0%
Account Minimum $0
Promotion Earn up to $2,500 when you open and fund a new account by February 28, 2021(Promo code: WINTER21).
Open an account »

E*TRADE pros and cons

Pros

  • No commissions on US-listed stocks, options, and exchange-traded funds
  • Wide selection of investments available for most accounts
  • Thousands of no-load, no-transaction-fee mutual funds available
  • Competitive mobile and online offerings for digital investors and traders 

Cons

  • Need at least $500 for automated investment management
  • Infrequent traders pay more for options contracts

How does E*TRADE compare to other platforms?

E*TRADE
TD Ameritrade
Betterment

Min. Investment

$0

Min. Investment

$0

Min. Investment

$0 or $100,000

Fees

0%

Fees

0%

Fees

0.25% to 0.40%

Investment choices

Stocks, ETFs, bonds, options, mutual funds, futures, and CDs

Investment choices

Stocks, ETFs, options, mutual funds, futures, forex, cryptocurrencies, IPOs, and bonds

Investment choices

Stock ETFs and bond ETFs

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Ways to invest with E*TRADE

Standard brokerage accounts 

With an E*TRADE brokerage account, you can make investment decisions without running into any account minimums or commissions. And the brokerage provides three free trading platforms: Power E*TRADE, E*TRADE Web, and E*TRADE Pro. You’ll also have access to a wide selection of stocks, mutual funds, exchange-traded funds, futures, options, bonds, and certificates of deposit (CDs). 

And most of the brokerage’s investments — except for bonds, futures contracts, and options contracts — come without fees. But bonds will cost you $1 per online secondary trade, and E*TRADE charges $0.65 per options contract ($0.50 if you make 30 trades per quarter). Futures contracts are $1.50 per contract.

E*TRADE also gives minors investing access through its custodial brokerage accounts. Parents or designated custodians can manage these accounts, and they come with $0 commissions, tax advantages, and investment education tools. 

Core Portfolio automated investment management accounts

If you’re a fan of robo-advice, E*TRADE’s Core Portfolios could be right for you. These accounts — though more expensive than the standard brokerage accounts — provide personalized and automated investment advice to help you meet certain financial goals.

For instance, E*TRADE offers specialized portfolios for goals such as wealth-building, retirement-saving, or buying a home. You’ll need at least $500 to set up the account, and you’ll pay an asset-based annual fee of 0.30%. 

As for account type eligibility, individual, joint and custodial brokerage accounts qualify for Core Portfolios. Rollover IRAs, Traditional IRAs, Roth IRAs, and SEP IRAs are also eligible. 

You can also adjust your risk tolerance — and add or remove specific investing focuses — at any time.

Managed and Prebuilt portfolios

If professional advice from human advisors sounds good to you, then E*TRADE’s managed portfolios might just suffice. E*TRADE offers three fully managed portfolios: Blend Portfolios, Dedicated Portfolios, and Fixed Income Portfolios. Each account allows you access to financial consultants who tailor your portfolio to your specific preferences and goals, but the minimum account size requirements differ. Account minimums for these portfolios range from $25,000 to $250,000.

E*TRADE additionally offers Prebuilt Portfolios of mutual funds or exchange-traded funds. These portfolios come without commissions, and they employ conservative, moderate, and aggressive investment strategies. To set up the account, you’ll need a minimum of $500 for mutual funds, or $2,500 for exchange-traded funds. 

IRA accounts

E*TRADE also provides retirement savings accounts for its users. You can advantage of several IRAs, or even roll over your 401(k) or employer-sponsored retirement plan. E*TRADE also offers the option to open retirement accounts online, by phone, or by mail. 

Its retirement accounts include the following: rollover IRAs, Roth IRAs, traditional IRAs, beneficiary IRAs, E*TRADE Complete IRAs, and IRAs for Minors. 

Coverdell ESA: low-cost education savings

The E*TRADE ESA allows you to set aside funds for your child for kindergarten through graduate school. You can make annual contributions of up to $2,000 with the account, and you can also use federal tax-free withdrawals on qualified education expenses. 

You can sign up for this account as long as your income is below $110,000 (for single filers) or $220,000 (joint filers).

Is E*TRADE trustworthy?

The Better Business Bureau has given E*TRADE an F in trustworthiness. An F is the lowest BBB rating a company can receive, and it typically indicates that a company has fallen behind in its customer interactions and/or business practices.

According to the BBB, E*TRADE received an F rating for failing to respond to or resolve several customer complaints that were filed against the business. However, the bureau also says on its website that its ratings don’t guarantee a company’s performance or reliability, so it’s best to do your own research as well.

E*TRADE — along with Robinhood, Webull, and TD Ameritrade — recently restricted trades on Gamestop (GME) and AMC Entertainment (AMC). These were two stocks that saw significant share price surges after members of a Reddit forum known as r/WallStreetBets collaborated to drive up the share prices. But like Robinhood and the others, the investment app eventually lifted its trading restrictions on the stocks.

Back in April of 2020, E*TRADE also faced several class-action lawsuits after US oil investment prices fell into the negatives. Oil investors experienced severe losses and sued E*TRADE for failing to provide adequate disclosures of the risk in trading oil investments. 

If you’d like to give the DIY investing route a try, but aren’t sure that E*TRADE may be the best fit, consider our list of the best online brokerages to use right now. 

What is E*TRADE?

E*TRADE is a financial services firm providing online brokerage, retirement and investing services for retail investors and traders. The brokerage offers several wealth-building solutions, including IRAs, brokerage accounts, small business retirement accounts, managed portfolios, and automated portfolios. To date, E*TRADE has 30 branches scattered across the US, but they’re currently closed due to coronavirus-related reasons.

E*TRADE’s services are available to active and passive investors, active traders, registered investment advisors (RIAs), stock plan participants, and stock plan administrators. 

When it comes to RIAs, E*TRADE serves these professionals two ways — through Liberty, its custodial platform, and the E*TRADE Advisor Network. The Liberty platform allows advisors to manage clients’ accounts, and the E*TRADE Advisor network referrals to connect independent advisors with prospective clients.

Headquartered in Arlington, Virginia, E*TRADE has been in business since 1982. The brokerage has also earned much recognition in recent years. In 2019, E*TRADE was named the Best Brokerage for Options Trading in Benzinga’s 2019 Global Fintech Awards.

In the same year, Kiplinger recognized E*TRADE as the #1 online broker in its “Best Online Brokers of 2019” ranking. Kiplinger also gave first place to E*TRADE in its “Best for Mutual Fund Investors” ranking. 

On October 2, 2020, Morgan Stanley acquired E*TRADE through an all-stock transaction. The acquisition now pushes Morgan Stanley’s assets under management to $3.3 trillion, according to a press release.

Rickie Houston is a wealth-building reporter at Personal Finance Insider who covers investing, brokerage, and wealth-building products.

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