If you’ve not heard of E*TRADE they’re a well-known online brokerage that has been in business for well over 30 years. Investing is a vital part to growing wealth, so I thought an E*TRADE review would be helpful for those looking to get started investing in the stock market or simply looking for a new broker.
I’ve had extensive experience working with E*TRADE while I was a stock broker. I’ve also used the Etrade platform quite a bit. My experience with E*TRADE was always a positive one and have found their platform to be intuitive.
What Sets E*TRADE Apart
Having been in business for over 30 years, E*TRADE has a wide range of offerings. Meaning, it would be justifiable to handle all of your investment needs through them as they offer a number of things other brokerages do. I’ll touch on some of those later, but following are some of the things that set E*TRADE apart:
E*TRADE offers both futures and forex trading. A handful of brokerages offer this, though few offer both. E*TRADE charges $1.50 for futures and is compensated on the bid-ask spread for forex.
- E*TRADE offers access to international markets. Very few brokerages offer this, so this really helps set them apart. At E*TRADE you can invest directly through exchanges in Canada, France, Germany, Hong Kong, Japan and the UK. The pricing differs from country to country, so keep that in mind.
- The customer service at E*TRADE is open 24/7. Surprisingly, this is not that common in the industry.
- Etrade offers access to over 8,000 mutual funds, of which 1,500 or so have no transaction fees. The commission comes in at $19.95, whereas many other brokerages charge $50 or more.
- Like Scottrade, E*TRADE has a national branch presence, albeit smaller. Etrade has roughly three dozen branches you can do business with nationwide.
- Etrade offers over 100 commission free ETFs. Other brokerages offer similar programs, though few offer this many options.
- Finally, the commission at E*TRADE comes in at a competitive $6.95 and an additional $.75 for options.
What’s Needed To Open An E*TRADE Account
Brokerages vary in terms of what’s needed to open an account with them. E*TRADE makes it relatively painless requiring only $500 to open an account – if it’s a retirement account there is no minimum balance at all.
This makes E*TRADE a good option for someone investing with $1,000 or less as you don’t need much to get started. E*TRADE has a full spectrum of account options from IRAs to business accounts so you should be able to find what you need with them.
Investment fees can be a drain on your investing and you need to avoid them if possible. You can check out this handy article from the SEC detailing how much they can cost you over the life of a portfolio. Thankfully, with E-trade you’re not going to have to deal with any hidden fees or account maintenance fees – which is unfortunately not all that common in the online brokerage space.
With that being said, there is one thing I don’t like about Etrade that you may want to consider with relation to pricing. Their commission is a flat $6.95, which is competitive though it’s a tiered system. If you trade at least 30 times per quarter you qualify for a more advanced platform –E*TRADE Pro. They also offer a lower commission schedule for more regular trading. These are all fairly common with online brokers, so it’s not uncommon though I’d rather not see it. However, if you’re not impacted by that or are a buy and hold investor then it really is a moot point.
What Can You Invest In?
As I mentioned earlier, one benefit to investing with E*TRADE is you get access to a wider range of investment products. Beyond the typical stocks, options and mutual funds you also get access to some of the following:
- International markets
- Access to banking products
These are all in addition to the futures/forex trading availability Etrade offers.
E*TRADE Review – My Take
I think for many E*TRADE is a great option to look at. They offer a full range of investment products and an easy to use platform, plus the usual cast of investment tools and free courses found at other brokerages. This really helps E*TRADE stand out amongst other mainstream brokers. I’m honestly not a fan of the tiered commission structure/more advanced platform E*TRADE offers to more active traders but that’s the nature of the industry – money talks. If you’re not going to be trading much then it really becomes a moot point largely depending on what your needs are as an investor.
The other thing I really like about E*TRADE is they offer some good promotions – namely the ability to get up to $600 cash back for a new account as well as the ability to trade free for 60 days. Both are quality promotions in my book. This is in addition to the quality customer service Etrade offers – they’ve regularly received a 5 star rating by Kiplinger’s for their service.
Opening an E*TRADE account is fairly easy and only takes about 10 minutes. Just make sure to see if you qualify for a promotion when opening the account. 🙂
Where do you handle your investing? What do you look for in a broker? How much does commission matter to you?
Photo courtesy of: Jason Tester Guerrilla Futures