E*TRADE is likely one of the broker names that you know the best. The platform has been one of the most popular brokers in America for a while, and it has a lot of benefits. This broker was founded in 1982 by William Porter and Bernard Newcomb. Since its inception, the brokerage has grown to have nearly five million in accounts. It has a margin receivables balance of over $9.5 billion.
Clearly, E*TRADE is doing something right. The broker’s tools are easy to use, and it has a large selection of investments. The customer support quality is another area in which this firm really shines, as its extensive collection of research and educational tools. The mobile app has improved greatly, making it one of the most advanced apps out there.
This firm has made a lot of big moves in 2020. Morgan Stanley, a financial services and multinational investment bank, has put in the legal paperwork to buy E*TRADE. Pending approval, the purchase could be completed by the end of the year for $13 billion. How that will affect user accounts is unknown for now, but it is likely to be a positive change.
Pros and Cons
Pros
- Great Customer Service
- Wide variety of investments from which to choose
- Mobile app is high-quality
Cons
- Website is hard to get used to
- Company is going through some shakeups this year
Recommended For
Why These Pros
Convenience is important for a trader. Customer service can be either one of the high points of a company, or it can be one of the most frustrating aspects. Judging from some user reviews, this firm’s customer service is top-notch. Its mobile app is also well-liked and high-quality, so traders on the go won’t feel marginalized if they have to use a smaller screen.
Why These Cons
As mentioned, Morgan Stanley is about to finalize a $13 billion purchase of E*TRADE. This means that any new accounts at E*TRADE will become Morgan Stanley accounts after the deal is finalized. While this is not necessarily a bad thing (and could be quite the opposite), users might feel unprepared for the shakeup and name change, especially since exactly how user accounts will be affected is, as of now, unclear.
Who Is E*TRADE Recommended For?
New and old traders alike will not have any major problems getting used to this broker, and that is in part due to the customer service. If you’re a very active trader, you will like the broker’s low commissions. One common, though minor, complaint revolves around the broker’s website, which some feel is complicated and hard to use. If you’re a novice, you might be overwhelmed by that.
Regulated By
- SEC – Securities and Exchange Commission (US)
- Financial Industry Regulatory Authority (US)
- SIPC (US)
Top Features
POWER E*TRADE & E*TRADE Pro
E*TRADE didn’t stop at just one platform—it has two, and each of the two target different trading styles. POWER E*TRADE is the web and mobile platform. You can do pretty much everything on either desktop or mobile. POWER is a platform that has easy-to-use tools that allow traders to trade futures, options, and stocks. This broker recommends POWER for those who are “passionate” about market-tracking and trading. POWER comes with, in addition to all the usual trading tools, charting tools that populate charts with analysis.
E*TRADE Pro is for traders who have an account balance of more than $1,000. Pro is the flagship for the broker, and it is a software platform that is web-based. It is best for active traders, professional investors, and day traders. The high trading balance requirement directs the Pro platform at more experienced investors.
Offerings Range
At this broker, you have a wide range of investments from which to choose. You can trade long and short stocks, mutual funds (more than 4,600), OTCBB (AKA, penny stocks), bonds (municipal, corporate, CDs, international, treasury), and multi- and single-leg options. Stock-wise, there are 6,000 long/short stocks from which to choose.
Order Types
E*TRADE clients are able to enter pretty much any order they want. This range has been cited as one of the firm’s best qualities. While mobile users have a limited range of conditional orders, users on Pro have the most powerful order entry setup. You can enter advanced order types (trailing stop limits, for example). This firm offers portfolios separated into three different risk strategies: aggressive, moderate, and conservative.
Screeners (Equity & ETF)
The standard stock screener has 45 different criteria, spread across six categories. The Live Action scanner on the POWER platform has over one-hundred pre-defined screens. The platform, in spring of 2020, added seventeen thematic screeners that included categories like up and comers, emerging economies, tech pacesetters, playing defense, hedging with gold, and more. On mobile, the stock screener has fifteen criteria. The ETF screener has 74.
Account Types
At E*TRADE, you can open a brokerage account (investing and trading account), where you can buy and sell stocks, mutual funds, options, ETFs, bonds, and pretty much anything else you can think of. As of September 2020, you can enter BONUS20 as a promo code to get $600 free when you open/fund a new brokerage account with $250K.
Two other account types to know are the Coverdell ESA and the Custodial Account. The Coverdell ESA lets you save for your kid’s education through tax-free withdrawals. The Custodial Account is a brokerage account in a minor’s name. The designated custodian (parent or guardian, usually) is the manager until the minor turns 18.
Trading Platforms
- POWER E*TRADE
- E*TRADE Pro
Trading and Investment Tools
- 24hr Trading No
- Streaming News Feed Yes
- Charting Package Yes
Compliance & Regulation
E*TRADE is under the watchful eye of the SEC (Securities and Exchange Commission), SIPC, and FINRA (Financial Industry Regulatory Authority). The SEC is a federal government agency founded by President Roosevelt in the 1930s. FINRA is a little newer (founded in 2007) and not a government agency. This private corporation is self-regulatory, acting as a successor to the NASD. It is mostly concerned with brokers on the NYSE.
Fees & Commissions
- Rollover Fee $25 – $75
- Margin Interest 5.45-8.95%
Service Details
- Supported Languages English, Cantonese, Mandarin, Spanish (plus line translation in 140 languages)
- Customer Service Hours 24/7
- Email Response Time Within 48 Hours (usually sooner)
- Telephone Orders N/A
- Personal Account Manager Yes (with $500 minimum)
Reliability & Security
The triple regulation of E*TRADE bodes well for its security. As a member SIPC, it protects your money for up to $500,000 in securities and cash. This broker’s Consumer Affairs ranking, however, is a different story. This firm appears to have locked some people out of their accounts, which might indicate a glitch in the system. Also, note that this broker is not BBB-accredited. While the tri-regulation is a good sign, there have been complaints.
User Experience
One reviewer described E*TRADE as the “granddaddy” of online trading. E*TRADE has a positive user experience, for the most part, though, as aforementioned, there are some consumers concerned about random lockouts. The two apps (POWER and Pro) target different traders, and its apps have consistently ranked in the top five on many review sites.
Final Thoughts
Overall, E*TRADE is solid. The broker is highly-regulated, offers many different order types and investment accounts, and it is suitable for experienced, active traders and beginners. The two apps are a major plus. Though the website needs work, and there are occasional glitches, this broker has been around for decades. Its nearly $1 trillion in accounts receivable indicates that it is no small firm.
Contact Info
671 North Glebe Road Ballston Tower Arlington, VA 22203
FAQs
Q: How do I fund my account?
A: There are four main ways to fund your account at E*TRADE. You can transfer money electronically, mail a check, arrange a wire transfer, or move an account from another financial institution to this broker.
Q: How do I place a trade?
A: First, go to the order-entry page. You enter the order information, including the stock symbol and number of shares, and click to purchase. If you’re having trouble, there are platform demos on its website, as well as a live Q&A every Wednesday at 11:00AM (Eastern Time) for a webinar. There, it’ll show you how to place an order and do all the rudimentary steps.
Q: What is the routing number for E*TRADE?
A: The bank’s routing number is 256072691, but that is not the same routing number for the ET Securities, which are the brokerage accounts. The routing number for the brokerage accounts is 056073573.
Q: What is the fund availability time?
A: After you’ve transferred money from an external account, the maximum wait time is three business days. Internal transfers are immediate, unless you are transferring to an IRA.
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