The first online stock broker I came to know happens to be ETrade, and this was way back in the 1990′s. So I’m a bit more familiar with this company than I am with other brokers, only because ETrade has been around longer and is certainly considered as one of the most recognizable. ETrade has established itself as one of the top brokers synonymous with online investing, being best known for their comprehensive tools, resources and customer support which cater to both long term investors and active traders alike. Let’s check out ETrade on various fronts:
E*Trade’s Awards
ETrade has received top awards (like TradeKing), and is obviously highly regarded by the financial press. So right off the bat, they’ve got a good reputation if you’re going to base it on what publications are saying:
- Smart Money (WSJ Magazine) rated them as #1 Online Broker in 2007 and 2008.
- 5 Stars for Trading Tools, Mutual Funds and Investing Products, Banking Services
- 4 Stars for Customer Service, Research
- Barron’s gave them 4 out of 5 stars in 2008 and recognizes them as part of the Top 10 in the 2008 Online Brokers Survey.
- As an aside, Money Magazine pegged them as one of the Best of the Breed for their online banking arm.
And here’s a look at ETrade’s pricing, products and features:
Pricing: Low Commissions and Brokerage Fees
Check out this quick table to show you how their pricing works:
| Trades Per Quarter | Cost Per Trade | Per Options Contract |
|---|---|---|
| Standard | $12.99 per trade | 75 cents |
| Minimum $50,000, or 0 to 149 Trades | $9.99 per trade | 75 cents |
| 150 to 1,499 Trades | $7.99 per trade | 75 cents |
| 1,500 trades and over | $6.99 | 75 cents |
When you open a brokerage account with ETrade, the most you’ll pay is for $12.99 per stock or option trade, which is the standard commission. Note that there are no fees for bond and mutual fund trades. For better rates, you can fund your account with at least $50,000 or make frequent stock trades (30 to 149 trades a quarter); by doing so you’ll lower your cost to $9.99 per trade. If you make over 150 trades a quarter regardless of how much you have in your account, you’ll lower your trading fees even further to $7.99 a trade.. There’s also a bonus for those opening new accounts: you can qualify for up to 100 free trades, which is rebated (credited back to your account) after 8 weeks.
ETrade Online Brokerage Account: Complete Investment Account
If you sign up for a brokerage account with ETrade, you’re effectively opening an ETrade Complete Investment Account, which is an “integrated investment and cash management account”.
The Basic Features
- You can trade and invest in stocks, options, mutual funds, ETFs, IPOs and bonds.
- Lots of no load and no transaction fee mutual funds are available.
- Use investing tools (streaming quotes, screeners) to help you with ETF management and asset allocation.
- Financial advisors are available, but this may require extra (paperwork, fees).
- Learn from free educational resources and materials, seminars, tutorials and webcasts.
- You can open IRAs of various stripes and colors with ETrade. There are no fees and no minimums when you sign up.
- You get free bill pay, checking, a debit card and some free checks.
- You have ATM access.
- Fund transfers are easy.
- You’ll get access to a sophisticated “trading platform” with high end trading tools if you’re an active trader. This platform is called the Power ETrade Pro platform, which I describe further below.
Power ETrade Account and Power ETrade Pro Platform
If you’re an active trader, you’ll get lower transaction costs, better prices and more advanced tools for your use. Once you have an ETrade Complete Investment Account it will automatically be “upgraded” to a Power ETrade Account if you make at least 10 trades a month, or a minimum of 30 stock or options trades a quarter. You will then have the features of the Power ETrade Account (via the Power ETrade Pro platform) available for as long as you maintain your trading frequency. These features include free access to powerful trading tools, advanced charts, technical studies, scanners and analytics tools, and something called “NASDAQ TotalView”, a tool which gives you a more comprehensive view of market liquidity. All this for $9.99 a trade or less, if you really trade a lot.
ETrade also has many more products in its roster, including support for retirement accounts, investment clubs, global trading, educational accounts, small business plans and of course, their banking division. So if you’re all for this, you can open an account with them here.
Copyright © 2009 The Digerati Life. All Rights Reserved.
{ 18 comments… read them below or add one }
This is your opinion. I don’t know what class you base your review on. If you decide to base you review on someone making $20,000 a year and the person make only 10 trades, then the commission fee is a lot. In scottrade, you can buy stock for $7 compared with etrade that costs $13 for buying a stock . It is only day traders that make 1500 trades a year.
ETrade is not the cheapest broker around (TradeKing, Zecco and OptionsHouse are), but they’re well regarded. I’ve been reviewing the well-known online brokers for a while now, and it was ETrade’s turn.
Also, it’s possible that not everyone opens an account with a broker purely because of price. To me, it’s all about value — if I find that a broker offers me good value, service and works well for my purposes, I keep an account with them. ETrade has the advantage of a product that is both an investment account and a cash management account in one (they called it an integrated account, and yes, ING has the same set up). I also know many people who trade at full service brokerages and who refuse to go with discount brokers (even though they are heavy traders) for various reasons. So it all depends on what you’re looking for in a broker. I won’t disagree with you that most people will look at commission costs to determine their choice of brokerage.
I use both E*Trade and TradeKing but I prefer TradeKing mostly because of price, $4.95 trumps $12.99 a trade (or even the $9.99 I’m paying).
I have my money spread around a few brokerages for diversification purposes. And ETrade has served me well.
Yes, ETrade is best. Not because of price but of the value and the services. So many good services for little money. If you look at all the infrastucture provided, it’s actualy cheaper. “QUALITY IS ALWAYS CHEAPER IN THE LONG RUN”.
I had my money in a brokerage firm that ETrade bought. Hadn’t heard much of them till that point but now I’m pretty happy with my account with them. I have ETrade’s index fund and so far I’ve done well with it over the long term. I like their customer service too. I’d recommend them to anyone.
etrade is HORRIBLE where it counts. Their commissions are really high and they have a TON of hidden fees. They charge you $25 just to transfer money electronically to your bank account. I decided to leave etrade after they charged me a $20 reorganization fee and billed an account I set up for my son $80 for inactivity (the account only had $200 in it for my son to practice with). Now its costing me another $120 just to get my money away from these crooks. I called them and just got the “tough s**t” response. They have $225 of my money that they shouldn’t have. Take your business somewhere else, these people are thieves. There are other brokers out there that don’t charge ANY of these fees.
Hi,
Very well documented article.
Thanks for this info (that I’ve discovered) and good coverage.
-A French reader.
I’ve been using etrade for a couple years now, and it had been going great for me, until I started (and rapidly) losing money in my portfolio. I knew these companies were going to raise back up, which they did. So I held onto my stocks and made no trades for a few months, then I got hit with a $40 service fee. Yes, if you don’t make the set amount of trades per quarter, you’ll get hit with a $40 penalty!! So if you wanted to make a long-term portfolio and hold onto it, you’ll be paying $160 a year in service charges! that’s something you need to keep in mind if you decide to use them.
On the other hand though, and this was the reason I started using Etrade and never switched, for the $13 trade commission rate, you get an outstanding effective service that is incredibly fast! What I mean is that I’ve never had a problem getting rid of nor buying a limit stock! I ask to sell at this much, and they have my shares sold almost immediately, and they’ve never failed. So the $13 price is great in that sense, the $40 is Not!
ETRADE sucks. Period. I hope you didn’t have anything invested in ETSPX when ETRADE unilaterally liquidated the fund and didn’t tell their investors last March, when the Index hit its absolute rock bottom.
Not only that, once you have money in ETRADE, it’s impossible to transfer it out. Try on a $60 transfer fee per account to transfer CASH!
And, their customer service is the worst. Go ahead and try to find a contact phone number or even an e-mail address to get answers to your questions. They also like to notify you through hidden “alerts” that are so hard to find, but are critical to managing your accounts.
Avoid ETRADE at all costs!!!! Check out other websites and the number of complaints against ETRADE is staggering.
I too had been using ETRADE since 1995. I used to LOVE them. But after this little scam I hate them to the core and plan to destroy them.
Etrade is a total nightmare. Rina said on 8/11/2009 that her Etrade index funds have done well. In fact, Etrade liquidated its index funds in March 2009 (at a market bottom) without telling it clients. I’ve been trying to get my IRA money out of Etrade for 5 months and they simply won’t do it.
I’ve used ETrade for many years and have always been very satisfied. Excellent year end documents for tax time. Easy to buy and sell. I even bought a very small amount of their stock in my “mad money” account.
ETrade Pro Platform is great. I have used it at my last job.
I like Charles Schwab
)) I also like Elvis Presley 
You’re on crack to join Etrade. The worst company service. There are way too many bad reviews and complaints about this company. I would not waste my time. It’s easier to use share builder.
Can you use margin?
@Poe,
All brokers allow you to create margin accounts, subject to some requirements they have. You’ll have to check their terms & conditions for details.
Don’t know what the beef is with ETrade. I personally like them — I have a diversified portfolio and am mostly a passive investor and from my experience, it’s worked out well. It has a varied set of products and tools to offer the small investor. Many times, people blame the broker when they should blame themselves — a lot of people trade based on how they feel, their gut instinct, intuition or emotion. Then when things fall apart, they want someone to point the finger on. I hear this a lot amongst my investor friends — they complain that the broker did this or that. Most people who comment just want to vent, imo.