E*Trade Financial Corporation is one of the most well-known online investment financial service companies. Referred to as E*Trade, the company offers a dynamic and comprehensive trading platform to its customers.
E*Trade has made a name for itself by offering a diverse set of investment tools to its customers. It is one of those rare platforms that also provides bank account services, mortgage lending, retirement products, and cash management services alongside more traditional investment options. E*Trade delivers its customers decades of experience and insight and is suitable for investors of all types.
Types of Accounts
Known for offering a variety of services, E*Trade offers various kinds of accounts to its customers. The following are some of the accounts on offer and essential information regarding the same:
Brokerage accounts help you build your portfolio by trading in stocks, bonds, options, ETFs and mutual funds. Suitable for both individuals and corporations, E*Trade offers extensive tools to its investors to help them make informed investments. The minimum deposit for brokerage accounts is $500, while the fees for investing in different options are as follows:
- $6.95 per trade (plus 75 ¢ per contract) – Up to 30 trades per quarter
- $ 4.95 per trade (plus 50¢ per contract) – More than 30 trades per quarter
$1.00 for online secondary market trades ($10 minimum, $250 maximum)
- $6.95 per trade – Up to 30 trades per quarter
- $ 4.95 per trade – More than 30 trades per quarter
Investors can, however, get up to $600 and an additional 60 days of commission-free stocks and options trades for deposits and transfer of $10,000 or more within 60 days of account opening.
E*Trade offers a variety of Individual Retirement Accounts (IRA) accounts to help you plan your retirement and savings, and invest in tax-free investment options. There is no minimum deposit required for IRA accounts.
E*Trade offers Traditional IRA, Roth IRA, Beneficiary IRA, and Rollover IRA accounts. It also has a unique E*Trade Complete IRA account which provides immediate access to IRA savings, allows withdrawals anytime, comes with free checks, a debit card, and online bill payment. The minimum age eligibility for the same is 59.5 years. IRA for minors, wherein a parent or guardian manages the account, is also available with E*Trade.
Managed Portfolio Accounts
E*Trade provides professional capital management services as well, and has the following options to assist you in building personal portfolios:
You can decide your strategy and approach in investment and E*Trade will manage your portfolio according to the same. A minimum of $5,000 is needed to get started, and there is a flat 0.30% annual advisory fee.
A financial consultant assists you in crafting the safest investment strategy and comprehensively manages your portfolio. $25,000 is the sum that is needed to start a Blend Portfolio, and a 0.65-0.90% blended annual advisory fee is applicable.
You get a dedicated Financial Consultant, a custom portfolio of different investment tools which ensure get maximum control. However, you need $150,000 to start this portfolio, and a 0.95-1.25% blended annual advisory rate is also applied.
Fixed Income Portfolios
In addition to a dedicated financial consultant and a mixed portfolio, you get additional support to meet your specific investment objectives and needs. The minimum sum needed is $250,000, and the blended annual advisory fee ranges from 0.35-0.75%.
Small Business Retirement Accounts
E*Trade Securities also offers retirement benefits to small business owners and their employees. They have the following instruments for the same:
- Traditional Solo 401(k)
- Roth Solo 401(k)
- Simple IRA
- SEP IRA
- Profit-Sharing Plans
- Investment-Only (Non-Custodial) Account
- Bank Accounts
In addition to a variety of investment options, E*Trade offers its customers banking services as well, for it’s an FDIC insured bank. Here are the different types of bank accounts provided by E*Trade:
Premium Savings Account
With a $100 opening deposit, you get attractive interest rates and all the facilities of a traditional bank account. However, to prevent a $10 monthly fee, you have to maintain a monthly balance of $1,000.
Max-Rate Checking Account
With a $100 initial deposit, you get facilities like online bill payment services, unlimited ATM fee refunds, online images of checks, online and mobile banking. However, a $5,000 average monthly balance has to maintained to avoid a $10 monthly fee.
E*Trade Checking Account
Free online bill payment, a free ATM/Visa Debit card, a low initial deposit of $100 and no account fee are the benefits of this account.
The FDIC insures all the accounts mentioned above to at least $250,000.
The founders of E*Trade, William A. Porter and Bernard A. Newcomb, used capital from TradePlus, a company they founded in 1982 to establish E-Trade Securities Inc. in 1991.
E-Trade became one of the first companies to offers trading services online and witnessed exponential growth within a few years into its operation. In 1996, the company launched its initial public offering (IPO) and went public. Since then, there has been no turning back.
Throughout the last two decades, E*Trade has acquired several smaller organizations to maintain its business edge. Some of the more well-known acquisitions by E*Trade have been: Web Street Securities (2001), Harrisdirect (2005), Brown & Company (2005), and OptionsHouse (2016).
At the end of the first quarter in 2018, E*Trade had $392.8 billion in customer assets and 3.7 million brokerage accounts. It remains a formidable market force in the online investment industry and has a substantial brand recall value on the back of its several well-publicized market campaigns.
Although E*Trade has a unique edge by being one of the oldest players, several new-age online investment firms are also doing exceptionally well.
Robinhood, a new entrant, which offers its services for free, with no minimum deposits, has become popular with young investors. However, if you value experience, you can still choose between
- TD Ameritrade
- Ally Invest
Most of these alternatives provide zero-sum minimum deposits and have an equal or marginally lower fee than E*Trade.
Being an industry leader, E*Trade offers its customers several advantages. Some of them are as follows:
Ease of use: The E*Trade platform is straightforward to use and needs no training or explanation. Newcomers can quickly get the hang of the different products and services and can invest according to their convenience.
Variety of services: E*Trade is one of those few platforms that offers brokerage, investment, banking, and retirement services all at the same place. Very few other competitors have such a wide variety of services on offer. Furthermore, they appeal to a diverse set of users, based on age and income levels.
Extensive set of resources and tools: Being a pioneer in the domain of online investment, E*Trade offers its customers the very best tools to assist them in making informed decisions. The E-Trade Pro feature, which is available only to investors who make more than 30 trades per quarter, offers several advantages like extended hours of trading, real-time tracking, customized reports, and potential risks.
Robust Customer Service: E*Trade is known to have efficient and robust customer services. They cater to a wide variety of customers, ranging from someone who has just started investing to seasoned investors, and hence, has ample experience.
There are a few drawbacks to using E*Trade. Here are the bigger ones:
Premium Fee: The fee charged by E*Trade is one of the highest across the industry. Several new age competitors offer similar services for free. There is also an entry barrier concerning the minimum initial deposit, which is not the case in most other online investment firms. If high premium rates and commissions are a deal-breaker for you, E*Trade might not be the best option.
Limited Physical Presence: E*Trade has offices in 30 locations, which means that their physical network is severely limited. The chances of a customer meeting their financial consultant or relationship manager physically, which is sometimes necessary to establish trust, are very low.
E*Trade Review Bottom Line
E*Trade provides its customers with comprehensive financial services and is one of the oldest players in the industry. In addition to investment options, the firm can help you make the most of your assets. Despite pricing its services a notch higher than their competitors, E*Trade continues to be a dominant player in the market.
E*Trade more than makes up for its fees and commissions by offering practical and useful additional services. All in all, E*Trade is a premium, dynamic and intelligent online investment platform that allows its customers a variety of financial services.