ETrade Review

Today, I would like to take a look at one of my favorite long term online brokers. The broker regularly makes the list of best brokers. ETrade is the broker with the talking baby commercials that are always shown during halftimes of Super Bowls. ETrade’s commercials have been growing in popularity over the years as people love to see what new commercials the company is offering.

ETrade Review

ETrade Financial is one of the oldest online discount brokers. The financial services company has been around since 1994. ETrade has grown its operations over the years with its acquisition of Harris Direct and Brown & Company

I first joined ETrade back in 1999 when they were still charging $12.99 for a trade. I can write from personal experience about ETrade becauseI have been a longtime customer. Here are the things that I like about ETrade and the things that I do not.

Etrade Advantages

Low Minimums

ETrade has lowered its minimum balance requirement substantially over the years. The company used to charge $2,000 to open an account during the 1990’s. This amount dropped to $1,000 in the 2000’s and now is down to $500. The low $500 minimum account opening balance makes the company’s services open to everyone.

Investment Options

ETrade is the best of the discount brokers when it comes to finding a variety of securities. The broker has any stock that you are seeking from foreign stocks to penny stocks. The mutual funds offering are plenteous as ETrade has as more funds than most discount brokers. They have the largest number of fixed income selections that I have found. I like the corporate bond selections and certificate of deposits. I have bought many bonds through E*Trade and have been pleased with the securities offered.

Investor Education

ETrade is number one when it comes to investor research. ETrade offers just about any free report that you are looking for and the ETrade Community makes finding potential investments easier. I particularly like the Bond Screener as it helps me to narrow down my bond offerings from all of the selections.

Trading Platform

ETrade has the best trading platform of any broker that I have seen. It is incredibly easy to trade using ETrade and only takes a few minutes to learn how to use the platform. ETrade makes it easy to buy and sell securities without any knowledge of how to use the platform.

Banking Services

The CashSweep account feature is a plus as money that is waiting to be invested can earn interest overnight. The interest rates are competitive with most financial institutions.

Inactivity Fee

ETrade has finally done away with my biggest gripe about the brokerage. The company got rid of that pesky $40 inactivity fee. You used to be penalized for not trading often enough. There are no more inactivity fees or minimum transaction requirements.

Disadvantages

Trading Fees

Etrade has lowered its fees from $12.99 per trade to $9.99. That is a move in the right direction but the amount is still too high. There are brokers with similar services like Scottrade that have lower trading fees. High volume traders can get trading fees for as low as $7.99. It takes 150 trades to qualify for this pricing however.

Customer Service

The customer service at ETrade could be improved. The company is not as responsive as other brokers and it can take awhile for a representative to get back to you. I prefer a response from my broker in a few hours.

My Opinion

ETrade is one of the brokers that I have personally used and I continue to use today. I use the company’s services for one of my brokerage accounts because I have been a longtime ETrade fan. I left the brokerage around 2006 because its fees were just too high. Once Etrade lowered its trading fees and got rid of a few other fees I came back.

ETrade is one of my favorite brokerages in the industry. I have recommended the company to quite a few new investors. Based on the robust investment research, great looking website, and plethora of investing options ETrade is tough to beat.

ETrade Brokerage Rating: A

Sign up to Trade Free for 60 Days at E*TRADE Securities LLC

Comments

  1. I use eTrade as my primary brokerage, so in general I recommend them. However, I would add a few additional negatives:

    1. Mutual fund fees are $20. That’s ridiculously high. There are others at $10. I don’t have a ton of transactions and most are for $20K or more so the impact is minimized. For for beginner investors, this is a major drawback.

    2. You can’t buy treasuries. I had to open an account at Fidelity just so I could purchase T-bills and T-bonds.

  2. avatar Jade says:

    Etrade sounds great, thanks Mark.

  3. I think E Trade is a good broker. One thing that is desirable about E Trade is they will automatically reinvest your dividends. Scottrade does not do that. I use Fidelity and they also automatically reinvest dividends if you select that under account features. Fidelity trades are $7.95, however, their margin rates are kinda high. My first brokerage account was with Datek. Anyone remember them? Nice article…

    Income Pirate

  4. avatar Jhett says:

    Do the divident reinvestment transactions get charged the trade fees?

  5. I am glad that E-Trade got rid on the inactivity fee. This fee was unjustified. It is also great that they lowered their minimum balance.

  6. avatar Lashawn says:

    Mark Im a mom who has had it with work…Im going to take my work earnings and learn how to invest.
    I recently opened a E-Trade account and Its alot to digest all at once, any suggestions on investing in a corporate bond and I would like to invest in other mom products. Oh yea….Im also buying a Treasury TIPS.

    Im new, so does this sound right….

    • avatar Mark says:

      It really depends upon your risk tolerance. If you are looking to play it safe and want a conservative portfolio with low risk then that sounds good.

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