Online Brokerages I’ve Used: Etrade Review

Welcome back to the third in a series of reviews of online brokerages that I have used in the past or currently use. Today I am discussing my Etrade review. To be completely transparent, I have never had an account with Etrade, but I have used their platform extensively in the past and am very familiar with their offerings from my days in the online brokerage industry. If you would like to check out my previous brokerage reviews, you can do so here:

As I shared in both of those posts, there are many online brokerages to choose from and they all have offerings that set them apart from the next one. Many of them claim to be among the best online brokerages but some do not measure up when you look under the hood. Ultimately, if you’re looking to invest in stocks and have a fairly simple approach, then it really just comes down to price and how you like their offerings. All that said, Etrade has been a fairly big player is the discount brokerage industry over the past few decades and most people will probably know them thanks to their over the top talking baby ads. Etrade started roughly 30 years ago and has been in the news recently for its struggles with subprime loans it took on prior to the Great Recession. Let’s move on with some of the nuts and bolts of their offerings.

Etrade Features

The Trading Platform: I grade the trading platform at Etrade better than most. It seems intuitive and user friendly when it comes to placing trades and finding information. At $9.99 per stock trade and $9.99 plus $.75 per options contract, its prices are on the higher end of the average range.

Free Streaming Quotes: Like Scottrade, Etrade’s streaming quotes are free. Once you open the account and fill out the requisite paperwork you can access free real time quotes. As someone who likes to have that feature, it’s nice to access without having to pay some sort of monthly or quarterly fee. Since I like to watch the stock market, I will generally not invest with a broker who charges for streaming quotes.

Forex/Futures Trading: This is a nice little feature that is not offered at every online brokerage. I will caution that Forex and Futures trading is not for everyone and does have its own unique set of risks associated with it. However, it’s a great feature that I think helps set Etrade apart from some of the other brokerages in the industry.

Advantages of Etrade

Powerful Trading Tools: Not only is Etrade’s trading platform very user friendly, but they also offer quite a bit of research and tools that can help you with retirement planning. Their free educational offerings help you better strategize your investing in the stock market.

Solid Offering of Mutual Funds: If you’re looking to invest in mutual funds then you’re likely going to be happy with Etrade. They’re in the middle of the pack in regards to mutual fund offerings as they offer over 8,000 mutual funds, of which, 1,300 are no load, no transaction fee funds. If they do have a commission associated with them, it’s competitively priced at $19.99.

Customer Service: Having worked in customer service for a number of years I recognize good customer service when I see it. Every time I have interacted with someone from Etrade I’ve had a great experience. They’re also open 24 hours a day and have a nice chat feature. Their branch network, while smaller than Scottrade’s is a plus.

Low Initial Minimums: Etrade is among the best in regards to a minimum amount to open an account. If you’re opening a standard account then the minimum is $500 or $2,000 if you’re looking to open a margin-enabled account.

Access to Foreign Markets: Along with the aforementioned Forex/Future trading this also really helps set Etrade apart. They have access to stock trading in Canada, France, Germany, Hong Kong, Japan and the UK. I am not terribly certain how competitive their pricing is in relation to that, but it is a nice feature to have if that’s something you’re looking for.

Disadvantages of Etrade

Higher Commissions: Probably my biggest beef with Etrade is their commission structure, especially as it relates to stock trades. Like I said earlier, $9.99 is in the range of what I would I consider acceptable, but it’s on the very high end of that range. As their cost is likely only $2-3 per trade there is a lot of fat on that price. I would be much more comfortable if they were closer to the $7 per trade range. That said, there is always the option to try and negotiate the commission. They do offer a lower commission structure at $7.99 per trade, but you would have to place at least 150 stock trades per quarter to qualify for that.

Flat Commission, with some catches: This is tied in with the higher commissions I mentioned above. Their commissions are largely flat, but if you trade in the extended hours then you’ll need to add $.005 per share for any of the after-hours trades.

Their Best Platform Comes at a Cost: Their most robust platform, Etrade Pro requires you to place at least 30 stock or options trades per quarter. While that might not hold many back as they may not use all of the tools available in the Pro platform, I don’t like not being able to use one of their tools because I don’t place enough trades.

What’s My Take on Etrade?

I think for many, Etrade is a worthwhile option to consider if you’re looking to invest in the stock market. They do have a decent amount of offerings and have some quality tools to use. They offer a good number of mutual funds and commission-free ETFs. If I were to personally choose to do business with them, I would want to negotiate a lower commission rate. If you’re looking for a decent online brokerage that has some good offerings, then Etrade may be for you and you can usually have your account opened online within 15 minutes. One nice thing to keep in mind is that they offer decent promotions for opening a new account such as free trades at account opening or even a cash bonus.

You will note that there are a number of affiliate links throughout this post. If you do click on them and choose to open an account then I will receive a small commission. Please know that I would only endorse companies that I stand behind and use myself or have great knowledge of. If you do click on it and open an account I greatly appreciate it as I do look to pass on value to you as my reader and the commission goes towards continuing building up of my site.Similar Posts:

The post Online Brokerages I’ve Used: Etrade Review appeared first on Frugal Rules.