E*TRADE is a well-known trading platform that accepts both novice and experienced traders. It is simple to see why so many investors prefer ETRADE because of its inexpensive costs and greater selection of investments than many other online brokers. E*TRADE also offers Core Portfolios, a well-regarded and affordably priced robo-advisor, for people who prefer to invest passively.
E*TRADE was established in 1982 to serve as a stock trading platform for regular customers. In addition to a strong web platform and mobile app, it was the first online brokerage.
Morgan Stanley purchased ETRADE in 2020. The robo-advisory platform that already exists at ETRADE has included and absorbed many of Morgan Stanley Wealth Management’s automated investment features. The business is now known as E*TRADE from Morgan Stanley. The business, which has over $3.3 trillion in assets under management as of 2022, offers everything from wealth management to tools for independent trading.
The Pros and Cons of E*TRADE
Pros
- Low fees – Various stocks, ETFs, and mutual funds have no commission costs, while everything else has extremely low expenses.
- Low minimums – To utilize this platform, you don’t have to fulfill any strict deposit or balance requirements.
- Fee-free funds – 4,400+ no-transaction-fee mutual funds and 100+ commission-free ETFs.
- Hybrid investment options – Excellent tool for combining managed options with self-directed investment.
Cons
- High management fees – Depending on the type of portfolio you have and your balance, annual advisory fees for managed portfolios range from 0.30% to 0.90%. These are higher than many brokerages of a same nature.
- No fractional shares – E*TRADE does not let you purchase individual shares, in contrast to a lot of rival trading sites.
E*TRADE account types
E*TRADE is more than a simple internet broker. Additionally, it offers banking services and retirement accounts. A list of the many account kinds is provided below.
Brokerage accounts
Choose from a range of commission-free assets that combine more complex and beginner-level trading techniques.
The following are examples of asset types:
- Futures
- Bonds
- Mutual funds
- Stocks
- Exchange-traded funds (ETFs)
- Options
More than 100 commission-free ETFs are accessible through E*TRADE, along with access to all additional ETFs that may be bought for a reasonable trading charge. Additionally, they have more than 8,000 mutual funds in total, 4,400 or more of which are no-load, no-transaction-fee mutual funds. You may plan automatic investments of $25 or more to keep your portfolio expanding.
Options contracts and futures trading are fairly unusual for this kind of platform. Futures trading is prohibited by many online brokers, and others also forbid trading options. However, E*TRADE does not provide fractional shares for purchase, which is unusual for online brokerages, nor does it provide FOREX (foreign exchange) trading, which are both popular for online brokerages.
Retirement accounts
E*TRADE provides six distinct IRA product types:
- Roth IRA
- IRA for Minors
- Traditional IRA
- Beneficiary IRA
- Rollover IRA
- E*TRADE Complete IRA
You have alternatives whether you want to convert an existing retirement account or search for your first IRA.
Bank accounts
The following bank accounts are available to E*TRADE subscribers through Morgan Stanley Private Bank:
Checking – a minimally-priced, no-fee checking account.
Max-Rate Checking – An interest-bearing checking account with no minimum initial deposit that pays 0.05% APY on all balances at the moment. imposes a $15 (waivable) monthly fee if your account does not always have a $5,000 minimum balance.
Premium Savings Account – a high-yield savings account that offers up to 3.25% APY at the moment. There is no minimum deposit needed.
Line of Credit – a revolving line of credit that you may borrow against your investments and has no maintenance costs. Depending on your credit line, this loan requires a brokerage balance of at least $50,000 and has an APR that ranges from 4.923% to 7.965%.
Benefits and features
This online broker stands out from others because to its extensive selection of account types and investments as well as its own E*TRADE platform.
Two platforms
Power ETRADE and the classic ETRADE platform are the two separate E*TRADE platforms. Each platform has a mobile app to go with it.
ETRADE is a straightforward web platform that’s great for novice investors and easy to use. Advanced traders and seasoned investors (particularly futures traders and aggressive options traders) should use the Power ETRADE platform. It offers more in-depth market commentary and research products, extensive charting resources, interactive charts, and risk calculation tools.
The Power E*TRADE platform has the following tools, for example:
Technical Pattern Recognition – to help you understand how a stock has historically behaved, it displays lines of support and resistance.
Earnings Move Analyzer – anticipates stock movement.
Risk/Reward Probabilities – predicts the maximum amount of money you stand to lose or gain from exercising an option.
Custom & Preset Scans – allows for custom stock screening.
Exit Plan – enables you to protect yourself while placing orders by allowing you to define profit objectives and stop losses.
Paper Trading – allows you to practice trading without risking any of your own money.
No minimum initial investment
A minimum deposit is not needed to start an E*TRADE brokerage account. Even though you may create an account without financing it and start exploring it, you won’t be allowed to start trading until your initial investment has processed. Money transfers are possible through wire, ACH, or cheque.
E*TRADE mobile apps
With a more user-friendly layout that is ideal for trading while on the move, the ETRADE mobile app delivers all the capabilities of the web-based trading platform. With the same trading features, the more complex Power ETRADE platform is also available online or as an app. Both platforms are accessible through the App Store and Google Play.
Customer service
The customer service line for ETRADE is 1 (800) 387-2331, and it is staffed around-the-clock through live chat. More than 30 local branches of ETRADE are located in many locations around the nation.
Account protection
The Securities Investors Protection Corporation (SIPC), which covers up to $500,000 in cash and securities, including up to $250,000 in cash, insures E*TRADE brokerage accounts. Deposits made into banks are FDIC-insured up to a total of $250,000 per account and per depositor.
Along with full payment protection, smart notifications by SMS or email, and an optional digital security ID, E*TRADE also guarantees $0 responsibility for account theft.
E*TRADE portfolios
A curated portfolio can be a better option for you if you prefer hands-off investing over active trading. You have a few alternatives with ETRADE for managing your portfolio, including fully-managed portfolios through ETRADE Capital Management and a robo-advisor.
Core Portfolios
E*TRADE’s robo-advisor, or automated investment management technology, is called Core Portfolios. The robo-advisor propose
A tax-sensitive ETF portfolio is another option you have if you want to pay less in taxes and save money. Tax loss harvesting is also available for all taxable investments.
While you are provided a recommended portfolio allocation with Core Portfolios, you have the opportunity to adjust it. This is one of their main benefits. If the advice asks for 90% stocks, for instance, you might opt to cut it to 75% if it suits your needs better. For investors who want greater influence over their investments but a hands-off attitude once their portfolio is set up, this degree of control is excellent.
This robo-advisor has a $500 minimum investment requirement and charges an annual advice fee of 0.30%.
Managed portfolios
s a diversified portfolio for you made up of a combination of U.S. overseas equities, ETFs, and bonds after you provide answers to questions about your investment style and comfort level with risk (also known as risk tolerance).
You may add more investing techniques to your suggested portfolio to make it more unique. Options consist of:
- Socially Responsible – Contains ETFs that concentrate on businesses with good environmental, social, and corporate governance policies.
- Smart Beta – choosing stocks with fewer risks and higher potential rewards in order to beat the market.
Managed portfolios
E*TRADE provides two managed portfolio choices for accounts with a minimum balance of $25,000.
Blend portfolios
To build a portfolio that is unique to you and your investment objectives, tax status, and preferred investing approach, you will work closely with a financial counselor. ETFs, mutual funds, or both are included. This portfolio is entirely handled for you when it is created, but you may always view it and ask questions.
Starting at 0.90% for portfolios under $100,000, the yearly advising fee steps down to 0.65% for accounts worth $1 million or more. There are no commissions or transaction costs.
Fixed income portfolios
A financial advisor will assist you in building a unique bond portfolio. To lower your risk and automatically reinvest the earnings, laddered portfolios can be created for both taxable and tax-free accounts. Either investment-grade corporate bonds, municipal bonds, or U.S. government bonds make up each portfolio.
To start an account, you will require a minimum of $250,000, and Laddered Portfolios have fees ranging from 0.35 to 0.45 percent. On the first $1 million, the next $2 million, and anything beyond $3 million, you’ll pay 0.45% year, 0.40% annually, and 0.35% annually.
E*TRADE is ideal for whom?
Investors who want to get their hands dirty should use E*TRADE. You’ll have all the information you need to make wise judgments and complete trades fast thanks to the helpful market commentary and research tools, and the robust platforms are suitable for day trading. One of the most complete trading platforms available is Power E*TRADE, and its simple design is ideal for regular trading without becoming tired of it. Using E*TRADE will make it simple for you to trade stocks or utilize more sophisticated services.
The majority of investors won’t have any issues getting started with E*TRADE’s brokerage accounts and other services. Additionally, the brokerage offers such a wealth of research and instructional content that anyone may pick up trading tips without ever leaving the app.
Investors can practice with lesser stakes if they are not yet ready for “the real thing” by using tools like paper trading.
