E*TRADE Review: Useful Tools and Research for the Active Trader

E*TRADE Review

When many of us think of online trading, our thoughts turn to E*TRADE. After all, E*TRADE was one of the first online trading platforms open to the masses.

Today, E*TRADE continues to evolve its offerings and adjust its strategies to attract more customers. The company has stayed on top of trends, offering more education and tools, updating to a cleaner design, and dropping their fees.

This is important in a world where the online broker space is becoming increasingly crowded. For those who prefer a more hands-on experience, E*TRADE is a solid choice, whether you’re a beginning investor or a seasoned veteran.

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E*TRADE review

Because it’s designed with more involved traders in mind, there are a number of brokerage account options you can open. This
E*TRADE review will look at the different types of accounts, fees, and other items you can access.

E*TRADE offers brokerage accounts aimed at casual and active traders, as well as retirement accounts and even managed solutions. If you decide to open an E*TRADE account, here are some of the choices available to you:

Individual, joint, or custodial brokerage account

You can choose to open your own account or a joint account with someone else.

It’s also possible to open a custodial account on behalf of a minor. With this account, you manage the investments until the child is old enough to take over.

While you don’t need a minimum to open an account, E*TRADE requires that you deposit at least $500 in an individual or joint account within 60 days. There is no minimum for custodial accounts.

E*TRADE Pro

The E*TRADE Pro account is designed for active traders. There’s a $500 minimum to open this type of account and you must make 30 trades per quarter (or have $250,000 in assets in the account) in order to maintain your Pro status.

This account does come with enhanced charts and market data to help you make trading decisions. You can also backtest trades and generate ideas with the advanced tools offered by Pro.

Image credit: E*TRADE

Futures trading

A futures trading account with E*TRADE grants you access to all the futures exchanges. You can use specific tools designed to help you trade futures. On top of that, you get access to streaming data.

You can also trade on margin using your futures trading account with E*TRADE. For a $50,000+ debit balance you pay an 8.50% margin rate.

Image credit: E*TRADE

Coverdell Education Savings Account

If you want to save for your child’s college education, E*TRADE offers a Coverdell ESA account.

There is no account minimum to open a Coverdell ESA but you do have to meet the eligibility requirements that come with a Coverdell in order to open and use the account.

Retirement

E*TRADE offers access to a variety of IRA accounts. You can open a Traditional or Roth IRA with E*TRADE and start saving for your retirement. If you have a 401k from an old job, you can roll it over. It’s also possible to use E*TRADE for your inherited IRA.

For small business owners, you can open a Savings Incentive Match Plan for Employees Individual Retirement Account (SIMPLE) IRA or a solo 401k through E*TRADE. They also offer solutions that include profit-sharing plans and other tools for small business owners to provide retirement benefits to their employees.

There is no minimum deposit to open a retirement account with E*TRADE.

Managed portfolios

As robo-advisors have grown in popularity and more investors want managed solutions, E*TRADE has kept up. They offer portfolios with different degrees of management so you can find the right balance for your money.

You do need at least $10,000 to get started (or $5,000 for a managed IRA solution). Other portfolios require $25,000 or $150,000. You will pay advisory fees for these accounts, but they can take some of the hassle out of your experience. However, robo-advisors often have lower fees.

E*TRADE banking

In addition to opening a brokerage account, you can bank with E*TRADE and take advantage of checking accounts that have no fees and unlimited refunds on ATM fees.

If you choose their interest-bearing checking account, you can earn 0.05% APY when your account balance reaches $5,000. (The account only pays 0.01% APY on balances less than $5,000.) You need an initial deposit of $100, but you’ll face a $15 fee if your average monthly minimum balance is less than $5,000.

Unless you get the non-interest checking, you’re likely to find better terms elsewhere. The main advantage to an E*TRADE bank account is that you can easily connect your brokerage account to your checking account since they’re held by the same company.

How to open an E*TRADE account

It’s fairly easy to open an E*TRADE account online in just a few minutes. The process goes faster if you have the necessary information readily available. You’ll need to provide your:

  • Name
  • Address
  • Date of birth
  • Social Security number or employer identification number
  • Employer name and address
  • Information for your funding bank account

If you’re opening a custodial account, you need to make sure you have identifying information for the minor in question. For rollover accounts, gather information related to your current account. You’ll need administrator or trustee information.

After you open your account and get it funded, you’re ready to start investing.

e*trade lets you trade the way you want

E*TRADE mobile app

No E*TRADE review would be complete without looking at their mobile app. You can do a lot with the E*TRADE mobile app, including stream live CNBC TV and use stock screeners to look for new investments. You can even customize your dashboard so you only see info that’s relevant to you.

The app is available for Apple, Android, and Windows phones.

Image credit: E*TRADE

E*TRADE fees

Until recently, E*TRADE charged a fee of $9.95 for stocks and ETFs. However, to remain competitive in a world where discount brokers are charging less, E*TRADE dropped their price to $6.95. This is still higher than brokers like Charles Schwab and TradeKing, but it’s a step in the right direction.

If you make at least 30 trades per quarter (which qualifies you for a Pro account), the price drops to $4.95 per trade.

It’s worth noting that E*TRADE offers more than 100 commission-free ETFs. You still have to pay expense ratios, but if you look for the commission-free offerings you don’t need to pay the transaction fee.

You can also trade options and futures with E*TRADE. You will pay the base pricing plus $0.75 per contract for options. For futures, you pay $1.50 per contract on top of the standard pricing.

E*TRADE’s platform allows you to trade bonds on the secondary market for $1.00 per trade. If you get the bonds through the U.S. Treasury auction, there is no fee.

If you want to trade mutual funds, take advantage of more than 4,000 no-load, no-transaction fee funds. When you don’t choose those funds, you will pay $19.99 per trade.

E*TRADE pros and cons

E*TRADE is known for its extensive research and knowledge base. You can learn more about investing basics with E*TRADE, as well as watch video tutorials on a variety of subjects.

You can even get ideas based on market insights with help from the site. View up-to-date information on markets and movers, and read about how the latest headlines could impact your portfolio. It’s also possible to get cross-market comparisons and other information.

Image credit: E*TRADE

The trading platform is easy to use and offers some serious power, especially if you are a Pro user.

The main downside to E*TRADE is the slightly higher fees. You will pay more for trades and some of the advisory fees for the managed products are higher than what you see with robo-advisors. However, for some traders, the tools, research, and platform make up for the higher costs.

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E*TRADE customer service and contact

One of the things E*TRADE is known for is its customer service. E*TRADE customer service can be accessed via phone, email, and online chat. The main customer service number is 800-387-2331.

Plus, E*TRADE offers FAQs that can help you answer the most common questions. The FAQs are grouped by category so it’s easy to navigate.

It’s worth noting that E*TRADE has several brick and mortar branches. If you live near one, it’s possible to go in and get the help you need. You can also call to speak to retirement specialists or discuss credit cards.

E*TRADE is a solid choice for investors who want a more hands-on experience with their portfolio. Frequent traders can benefit from the tools and research available. However, if you are looking for a broker that will build and manage your portfolio, you might be able to save money by choosing a robo-advisor.

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