As an investor considering online stock brokers, it’s good to know all your options. However, all the options out there can be overwhelming – especially if you’re new to online investing. E*Trade is a commonly used online broker, and they’re generally well-known even to people who aren’t big players in the online investing marketplace. This article is intended to break down the pros and cons of E*Trade and help you evaluate whether they’re the online stock broker for you.
Let’s look at the important details that anyone should consider when considering an online stock broker, and how E*Trade measures up.
E-Trade Review Summary:
✅ Large variety of instruments
✅ 24/7 support
✅ Easy to use platform
✗ High minimum requirements
E*Trade’s website is very well-known, and highly credible. They received a 4.5/5 star review from both Stock Brokers and NerdWallet, primarily losing points due to their somewhat higher commissions and fees. E*Trade has a notable marketing platform, meaning that they’re often one of the first companies that people think of when they think of online stock brokers.
However, as is always the case with any large financial institution, E*Trade does have its fair share of negative customer satisfaction reviews, per Consumer Affairs. Primary complaints center on dishonest interactions and incompetent or inattentive customer service. It’s important to remember that, while these reviews are incredibly negative, any time money is involved and things don’t go smoothly, people will overreact and take to the internet to leave a negative review. Negative reviews, especially of large financial companies who have an equal amount of positive reviews from reputable sources, should be taken with a grain of salt.
Costs and Fees
When comparing E*Trade to similar online stock brokers, their commission fees are high – $9.99/trade for low-volume traders. High-volume traders benefit from tiered pricing that ranges anywhere from $6.99-7.99/trade. While this flexibility in cost is nice, it doesn’t make a difference for beginner investors who aren’t looking to trade at high volumes.
E*Trade does have an account minimum of $500 for brokerage accounts, but it is a $0 minimum for IRAs. Additionally, they have a $9.99 base fee + $0.75/contract for options trades, and a $75 full transfer out fee. However, they do have $0 annual fees and $0 inactivity fees – allowing a little bit more flexibility for their clients.
NerdWallet gave E*Trade 5/5 stars for their customer service, and we can see why. They’re available 24/7 via phone, with additional live chat and email services, as well as about 30 in-person branches for clients to visit.
In addition to being excellent with customer service, E*Trade offers a lot of educational resources and information for beginning investors to promote an educated, positive investing environment.
E*Trade also offers a robo-advisor service for those looking for more than a self-service investing model. Their robo-advisor service invests and manages your portfolio for you, but it does have an investment minimum of $10,000.
E*Trade offers a wide range of investments that are typical of most discount brokers. They also offer futures trading and several no-transaction-fee mutual funds and commission-free ETFs. They also offer several top-notch data and research offerings – all free to their clients.
Ease of Use
E*Trade is designed to be incredibly user friendly. With two primary options for users – E*Trade Web and E*Trade Pro – they make it easy to manage your portfolio. They offer live market commentary, educational webinars and resource lists, real-time quotes, and market data streaming. Additionally, E*Trade makes it possible for you to create watch lists, and create trades or complex option strategies.
For more active investors, E*Trade Pro offers idea-generating tools, testing capabilities, and customisable charting. However, their E*Trade Pro option has a high minimum account requirement of $250,000 (or a minimum of 30 stock or option trades per quarter). Investors who want to be active with their trading, but don’t want to commit quite so heavily, will likely find a better option elsewhere.
E*Trade’s promotion details new customers getting two free months of options and stock trades (500 trade-cap) with a $10,000 deposit requirement. Any time an investor deposits $25,000 or more, they get a minimum $200 cash bonus.
How does E*Trade compare to the competition?
E*Trade’s amazing user accessibility, mobile platform options, and extensive educational offerings make them a valid contender in the online stock broker field. Although their fees are a little higher than you’ll see elsewhere, they generally make the investment worth their clients’ time with excellent customer service and investment offerings.
However, if an investor is looking to be more active with their trading, E*Trade’s minimum requirements may still be too high. Additionally, if an investor isn’t looking for an educational platform, financial or investing guidance, or help with their portfolio, they may find that E*Trade’s costs and fees don’t match up with the benefit they’re getting from all of E*Trade’s additional services. In general, E*Trade is an excellent service. But investors should always do the research to decide whether their online stock broker platform is meeting their needs.