When seeking personal finance solutions, E-Trade is one of the first companies that comes to mind, thanks to a national ad campaign and lengthy track record (the company was formed in 1982). E-Trade was one of the first online brokerage services, initially aimed at more lucrative investors willing to pay high fees to be one of the first to access online investing tools. Today, it is an option for investors large and small.
Pricing and Services
E-Trade still caters to premium investors, while also offering accessible low-cost packages to young professionals seeking to hone their personal finance abilities. E-Trade’s $9.99 standard commission per stock trade is average compared to competitors. Where E-Trade separates from the pack is via its several exclusive services, including 1,300 no-fee mutual funds, nearly 100 commission-free ETFs and a variety of banking services, which is ideal for convenient fund transfers.
Some E-Trade services are lower in cost compared to competitors, such as a commission-associated mutual fund of choice being priced at $19.99 instead of the more common $50 fee at other sites. Also, E-Trade ranks among the most accessible in terms of the minimum deposit required to open an account at just $500. A margin-enabled account requires a $2000 minimum deposit.
E-Trade’s cost is particularly attractive for active traders; investors who make between 150 and 1,500 trades per quarter qualify for a reduced commission rate of $7.99, which is a substantial $2.00 off the normal fee. If you make more than 1,500 trades per quarter, you can also negotiate an even bigger discount.
Strengths
In addition to providing convenient banking services and having low initial minimum deposits, E-Trade has various research tools, which include:
- Investing Insights – provides investing ideas influenced by trends such as relevant investing topics and market trends.
- Analyst Research – Commentary from respected sources like Credit Suisse, S&P and Thomson Reuters are provided, with in-depth analysis and comparisons of stock options.
- Community Activity – E-Trade users can directly ask financial pros questions on current trends or recent market events.
- Stock Screener Tools – the ability to screen stocks via E-Trade allows users to discover stocks worth investing in based on their personal criteria.
In addition, E-Trade offers access to foreign markets – Canada, France, Germany, Hong Kong, Japan and the UK, in particular. It’s a nice perk for anyone more specialized in foreign markets.
Weaknesses
Although there are certainly users who have no issues with E-Trade’s customer service, a one-star rating on Consumer Affairs after over 240 reviews suggests there are some issues, mostly citing poor communication by customer service. Still, it’s worth keeping in mind that most banking institutions have poor reviews online, so E-Trade is not too different than its major competitors in this regard.
Another potential criticism of E-Trade is that it is not accessible to every type of trader, in terms of frequency. Those who trade very infrequently or rarely may find lower fees elsewhere, but for average or above-average traders, E-Trade offers a great platform where you can lower commission rates through increased activity. Some fees – like broker-assisted market orders being an extra $25 per trade – are irritating, but for the large part E-Trade is very fair in terms of pricing.
Overall, E-Trade is a recommended option with a variety of tools and platforms that make up for some higher costs.