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 30 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.
- Stock trades: Free stock trades from Zecco, Cheap stock trades from TradeKing, Stock news and Investment info at INO TV Free, No cost Trend Analysis for stocks
- Earn top returns: FNBO Direct [1.90%], HSBC Direct [1.65%], WTDirect [1.76%], E*Trade Bank [0.95%], ING Direct [.25% to 1.65%]
- Cash bonus: Discover More [$50], American Express [$25], Lending Club [$25]
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{ 7 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.
Hi,
Very well documented article.
Thanks for this info (that I’ve discovered) and good coverage.
-A French reader.