The Complete E*Trade Review 2024

What makes E*Trade stand out is its robust electronic platform complete with numerous customizable features. This makes it a preferred choice for many, including myself, regardless of their investing skill level.

E*Trade’s acquisition by Morgan Stanley has further broadened its spectrum of investment choices, all while maintaining the high-level security of its web and mobile platforms. Let’s go over the details, from registration to withdrawal, and see if it fits your trading needs.

Pros and Cons

Pros

• A robust educational library
• Multiple personalized account types
• Support for multiple instruments with over 6,500 mutual funds and 50,000 bonds
• No commission on several asset classes, making it cheaper for many investors and traders.
• Two trading platforms for clients to analyze the market depending on which suits their preferences

Cons

• There’s no chat option to communicate with customer representatives from their website.
• Finding specific information can be difficult, like how funding on E*Trade occurs.
• Absence of cryptocurrency and forex trading on the platform.

Education And Training

A good gauge of the integrity of an online broker is how committed they are to high-quality educational resources. E*Trade provides a comprehensive and robust knowledge base for both new and existing users, which is a promising sign when researching a broker that’s right for you.

The educational section on the broker’s website is tagged “Knowledge,” and it’s categorized into ten different aspects: Overview, Investment Basics, Advanced Trading, Retirement Planning, Tax Planning, Morgan Stanley Thought Leadership, Market News, Thematic Investing, Events, and Life Stages.

Let’s briefly explain each segment:

• Overview: The overview contains a list of other segments and a summary of what to expect from them.
• Investment Basics: This section introduces the world of investments and trading; you’ll discover everything on the fundamentals of investing, like risk vs. reward and diversification.
• Advanced Trading: As the name suggests, you’ll get everything on trading different markets, from futures to options.  
• Retirement Planning: This area really reflects that E*Trade cares about its customers. This segment shares tips on how to plan for requirements adequately.
• Tax planning: Taxes can be a problematic issue for investors, and E*Trade makes it straightforward by providing the right resources for everything tax-related.
• Morgan Stanley’s Thought Leadership: E*Trade partnered with Morgan Stanley to provide market and economic insights for users and non-users.
• Market News: Both platforms share forces in partnership with Morgan Stanley to share news about what is happening in the market.
• Thematic Investment: This goes deep into educating users on a more streamlined way of investment.
• Events: Deals with webinars and educational events exclusively discussing trading, investment, and other related themes.
• Life Stages: This segment focuses on general education, family finances, retirement, elder care, and how to plan for them properly.

Compared to other brokers’ usual level of content creation for their educational section, E*Trade does need to step up their game. Content on E*Trade is majorly text-based, which will turn off users seeking more interactive or video-based content.  

However, on the whole, the inclusion of various sections like Retirement and Life Stages shows that E*Trade cares a lot about its traders and wants to equip them with the right knowledge to be successful.

E*Trade Regulations

Beyond E*Trade being regulated by Financial Industry Regulatory Authority (FINRA), it doesn’t have any indication whatsoever about being regulated by licensing authorities like the Commodities and Futures Trading Commission (CFTC) and National Futures Association (NFA). No section on its website discusses this.

Under the disclosure library resources tagged “Asset Protection,” E*Trade discusses the three main methods through which users’ assets are protected:

• First, through the FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), which provides bank protection. E*Trade relies on the Securities Investor Protection Corporation (SIPC), which protects customers’ accounts up to $500,000 for brokerage protection.

• Also, E*Trade follows the Security and Exchange Commission (SEC) customer protection rule, which means customers are 100% in control and own all fully-paid securities, including stocks and bonds.

The third method has more to do with security than regulation, which we will explore below.

Security In E*Trade

Below are some of the means E*Trade uses in securing its user accounts:

Fraud protection:

E*Trade covers any loss from a user’s account due to unauthorized use of their brokerage, banking, or lending services.

Privacy protection:

According to the company’s privacy statement, they wouldn’t sell users’ personal information to third parties or marketers for any purpose.

Encryption and Network Defense:

E*Trade has implemented a system to help users protect their personal information from unauthorized access.

Two-factor Authentication (2FA):

This is another layer of security that requires users to provide a certain identification method each time they log in to a device.

In addition to all these, E*Trade provides a step-by-step guide to assist users in setting their passwords, how to go about their mobile devices, identity, and personal computers.

Besides all these measures, additional efforts were taken to explain how to report any concerns about security issues if users had any. The image below explains in detail.

I found the user security aspect to be solid and indicative of the dedication of E*Trade; however, the presence of a few regulatory licenses is a massive turn-off for me in particular. Having multiple licenses from recognized regulatory authorities would be a significant step.

Account Types on E*Trade

There are five types of accounts currently provided by E*Trade: Brokerage, Retirement, Managed Portfolios, Small Business Retirement, and Bank. Each of these accounts also provides a lot of flexibility for users, so let’s go through them in detail.

The Brokerage account:

There are three types of accounts available for customers to open here:

• Brokerage account: allows users to buy and sell stocks, ETFs, mutual funds, options, bonds, and more
• Coverdell ESA account: mainly targeted at saving for a child’s education by providing features like the tax-free withdrawals for qualified educational expenses, such as tuition and books
• Custodial account: focused on providing a brokerage platform for minors which is managed by a parent, guardian, or other dedicated custodians until the child becomes of legal age.

The Retirement Account:

There are six account types under this umbrella:

• Rollover IRA: allows users to consolidate assets from a former employer’s retirement plan
• Roth IRA: a no-tax investment for retirement
• Traditional IRA: tax-deductible retirement contributions
• Beneficiary IRA: keeps inherited retirement assets tax-deferred while investing it for future use
• E*TRADE Complete™ IRA: allows you convert IRA for easy access to cash with free checking, online bill pay, and ATM/debit cards
• IRA for minors: a retirement account managed by adults for children with earned income.

The Managed Account:

There is only one type of account here, which is the Core Portfolios. This account is aimed at providing automated investment management that helps monitor your diversified portfolio for annual fees of $500 minimum and 0.3%

The Small Business Retirement Account:

This account focuses on assisting employers in providing retirement benefits to their employees. There are four different accounts of choice to go for here:

• Individual and Roth Individual 401(k): a retirement plan for the self-employed
• SIMPLE IRA: for businesses with fewer than 100 employees
• SEP IRA: for self-employed and small businesses
• Investment-Only Account: for businesses with existing retirement plans.

The Morgan Stanley Private Bank Account:

There are four types of accounts under this category:

• Premium Savings Account: allows you to boost your savings with 4.00% APY5
• Max-Rate Checking: provides competitive yields and free features
• Checking: provides basic checking with no monthly fees
• Line of Credit: allows you to borrow against your investments.

Under each type of account, a dedicated FAQ provides more details. This is an outstanding feature since I know that when I stumble into any roadblock, I can quickly find an answer if it’s under the FAQ section.

Pricing and Rates

Very few brokerage platforms are open about their pricing and rates for customers, and E*Trade isn’t among them. The pricing and rates by E*Trade are very open and straight to the point. Let’s go over each asset and how much is charged.

• Stocks and Options trade charges $0
• Options contract fees are based on the number of trades; between 0-29 trades, you’ll pay $0.65, and for 30+ trades, you’ll pay $0.50
• Exchange Traded Funds (ETFs) are entirely free, $0.
• Some bonds are free, while others are not. The US Treasury auction and US Treasury secondary trades online go for $0. Broker-assisted trades require paying $20; for the online secondary trades, you’ll pay $1 per bond (minimum $10, maximum $250).
• For futures contracts, you must pay $1.50 per contract or side. This is inclusive of the fees but doesn’t account for cryptocurrency futures.
• Mutual funds are entirely free.

Aside from the above, there are other segments where users are required to pay some rates. This is where you can check for additional fees. Take a look at the images below for more details.

More information on the trading fee can be found on E*Trade’s website.

Assets and Instruments

A sticking point for me with this broker is that I don’t appreciate the lack of certain tradable assets on E*Trade. You won’t find assets like cryptocurrencies and forex pairs on the platform. This can turn off some traders interested in trading a diverse and wide range of portfolios.

• Under stocks, you’ll find some of the top five yielding stocks, including VZ, WBA, IBM, MMM, and DOW.

• Under options, you’ll find Equity and Index Options and Futures Options. E*Trade also provides dedicated tools to help you figure out how to trade the options market, including risk/reward probabilities, customizable options chain, Earning move analyses, strategySEEK, spectral analysis, and eye.  

• In the futures market, arrays of instruments to trade without restrictions exist. E*Trade also has specialized tools dedicated to helping traders make the most of the market. Some instruments under futures are categorized into Equity Index, Energy, Interest rates, Metals, Grains, Soft, Livestock, Fx (currency), cryptocurrencies, and Micros. The instruments include E-Mini S&P 500, Micro E-Mini S&P 500, E-Mini Nasdaq 100,  Crude Oil WTI*, Micro Crude Oil WTI*, Natural Gas, Three-month SOFR, 10-Year T-note, 5-year T-note, Gold, Copper, Silver, Corn, Soybeans, Wheat, Cocoa, Coffee, Sugar, Euro, Japanese Yen, Australian dollar, Micro Bitcoin, Bitcoin, Ether, etc.

• Exchange Traded Funds (ETFs) have the advantage of diversification, some of the instruments you’ll find include DXJ, LRGE, QQQ, DBJP, and FLJH. Some supporting articles help you understand more about ETFs published by E*Trade, and the market is open 24/5.

• Mutual Funds are commission-free and there are over 6,500 of them for you to select from. Some of the top mutual funds available in the market are FXAIX, VMFXX, SWPPX, VFIAX, and VUSXX.

• Bonds And CDs: For those interested in bonds, E*Trade has you covered. There are over 50,000  bonds and fixed-income products to choose from. The best part is that it doesn’t matter whether you’re an expert or a beginner trader. If you find yourself needing any resources, then consider checking the comprehensive bond center. Some of the categories of bonds you’ll find include the US Treasury, Agency, Municipal, Corporate, High Yield, and Brokered Bonds.

My only issue with the available assets is the exclusion of forex and cryptocurrency assets usually available on most brokers.

Trading Platform

Every broker should find a way to simplify trading through a trading platform that enables trades. This trading platform can be proprietary, owned by  E*Trade or other platforms like MetaTrader 4 or 5 or TradingView.

E*Trade does well with regards to its custom trading platforms — and yes, that’s “platforms” with an “s”.  There are two: E*Trade app, and the Power E*Trade app. The former is designed for those with minimal knowledge of how the space works, while the other is dedicated to those with sophisticated or high-level expertise.

Both of these platforms are available on both Mobile and Desktop. You’ll get them on iOS, Android, Linux, Windows, and Mac.

The Power of E*Trade

This is a sophisticated tool for traders with knowledge of the market. It is very user-friendly, with over 145 charts available and hundreds of drawing tools to trade with.

Users have access to technical pattern recognition, earning mover analyzer, risk/reward probabilities, custom and preset scans, powerful charts, an exit plan, and paper trading.

Paper Trading on E*Trade is similar to Demo trading; it allows users to test different strategies and trading patterns, build their trading style, and improve their skills without committing money to the entire process.  

The E*Trade platform

The E*Trade platform is the simplified platform, aimed at traders who are novices but interested in building a diversified portfolio, managing cash, and getting investment guidance. Some of the features include:

• Real-time quotes, charts, and daily market commentary.
• Free independent research from notable channels.
• Screeners to help generate trading strategies.
• Multiple tools to help improve your trading skills, including the backtesters, analyzers, professional-grade screeners, and optimizers.

Funding and Withdrawal

Funding and withdrawals on E*Trade are hassle-free. Let’s briefly go over each method.

Funding

To fund your E*Trade account, select from the four available methods on the site.

Transfer money: this is a seamless way to move money in and within your E*Trade account. This free service usually takes up to 3 business days to fully process each transaction.

Wire Transfer: it’s unclear what fee might be incurred, but this is the fastest funding method on E*Trade, and transfers are received within the same day.

Transfer an Account: this method involves moving your entire account from an outside financial institution into E*Trade, which can take more than ten business days.

Deposit a Check: this takes just up to 5 business days, and there are two ways of doing this: by mobile check on the E*Trade mobile app or via mail.

Withdrawal

Withdrawal on E*Trade has to be one experience I didn’t like. Details about this are obscure on the site, but I did my digging, and here’s what I found:

Wire Bank Transfer: This is a faster withdrawal method. However, it comes with a $25.00 fee per wire, which is hefty compared to other brokers. There are rules on when the process usually takes place and how you’re expected to withdraw.

Automated Clearing House (ACH): this process is straightforward and can be easily followed from their mobile application. However, you should know this method isn’t instant and can take 2-3 days to process. This method is also completely free, with a limit of $100,000 daily.

Customer Support

As Tony Hsieh once said, “Customer service shouldn’t just be a department; it should be the entire company.” E*trade understands this.

There is a variety of ways to reach them. First, you are advised to check out the company’s FAQs to see if you’ll find any helpful information that answers your questions.

Beyond that, there are different dedicated call lines to reach depending on what you’re having concerns with; if you have questions regarding E*Trade as a whole, then there is a special line for that; if you need to make inquiries about the stock plans, there’s also a line for that;

and there is a dedicated brokerage line for employers to track employees’ trading falls with regulatory requirements. Customers can also send documents or inquiries via regular and overnight mail. If you’re a social media person, then you can reach out via the company’s social media on Facebook, Twitter, Instagram, YouTube, or LinkedIn.

The drawback I noticed was the absence of the chat option to start a conversation with a representative. Many brokers offer this option for customer convenience, but as of yet, E*Trade does not have this feature.

Understanding More About E*Trade

E*Trade, a global pioneer among financial institutions and brokerage companies, was established in 1982 by William A. Porter and Bernard A. Newcomb. It quickly emerged as a revolutionary force in the financial trading sphere.

Over the years, E*Trade has hit numerous milestones, such as acquiring OptionHouse in 2017 for a whopping $725 million. By 2020, it was bought out by Morgan Stanley for an impressive $13 billion. At that time, E*Trade boasted 5.2 million clients and managed client assets exceeding $360 million.

Known for its user-friendly mobile interface, E*Trade offers a vast selection of tradable assets: over 6,500 mutual funds, more than 50,000 bonds, stocks, and exchange-traded funds (ETFs), and more. Furthermore, its educational resources are both comprehensive and insightful.

E*Trade maintains high security standards, adhering strictly to FINRA regulations and SEC guidelines. There’s also the FDIC and SIPC insurance that adds a layer of additional safety to the platform.

E*Trade is available on both mobile and desktop devices, allowing traders to analyze the market effectively and execute trades with ease. The platforms — E*Trade and Power E*Trade — are complemented by a robust customer support system ready to address client inquiries and complaints.

Frequently Asked Questions

What is the Minimum Amount to Open an E*Trade Account?

There’s no minimum account to open an E*Trade account. However, certain features on the broker will require a minimum amount before being able to use them.

How Long Does Depositing into E*Trade Take?

This completely depends on the method you choose; wire transfer is the fastest method to try out and instant, while other methods take up to 2-3 days.  

How Long Does Withdrawal Take

There are two methods available on E*Trade; wire transfer method is the fastest method, while the other method, the automated clearing house, takes between 2-3 days.

Is E*Trade Available to Everyone?

E*Trade is restricted in countries like Mexico, Japan, Malaysia, and Nigeria. However, it’s available in many other countries and mainly focuses more on the United States.

Is E*Trade License and Regulated

Yes, E*Trade is regulated by the Financial Industry Regulatory Authority (FINRA) and the Security and Exchange Commission (SEC).

Is E*Trade Trustworthy?

Yes, E*Trade is a trustworthy platform. It is  regulated and has invested effort in educating users with multiple resources —  and, more importantly, it has made trading and investment easy.

Conclusion 

My personal experience with E*Trade was quite positive, and I wholeheartedly recommend it to those seeking a reputable brokerage firm. However, like any financial platform, it’s crucial to weigh the pros and cons before making your decision to ensure it aligns with your specific needs.

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