Broker Excellence Profile: E-Trade

Estimated read time: 5 minutes

You have your emergency fund in place, and you’re putting enough in your 401k to fully take advantage of your employer’s match. Now you want to do some more investing on the side, and stock trading seems like a good place to start. You’d enjoy picking out stocks and watching how they perform, and you’re ready to pony up some cash to get started.

If that’s you, E-Trade could be a great option to get started in the investing world.

E-Trade Overview

There are many options when looking for an online broker, but E-Trade is one of the biggest names out there, having millions of customers who have tested the waters already. E-Trade has made a name for itself by making investing accessible for everyone. They charge $6.95 per trade. If you opt for an options contract, you’ll pay that $6.95 per trade, plus 75 cents.

If you want to make frequent trades, you can get a break. If you make more than 30 trades in a quarter, your price for a trade falls to $4.95, with an extra 50 cents tacked on per options contract.

When you sign up for E-Trade, you’ll get to pick what you want to invest in. After you’ve selected your investments, you can track them and manage them with the information and tools E-Trade provides.

E-Trade offers three platforms for trading, including E-Trade Pro, Power E-Trade, and E-Trade Web. The platforms are free for any customer.

If you’re not sure what you’re doing, E-Trade will walk you through the process by helping you set your goals. This will include how much you can afford to invest, and identifying your short-term and long-term goals. You can get started with your new account in as little as 15 minutes.

E-Trade has a lot of great points to it, including the big selection of investment options it offers and the supportive tools you’ll have at your disposal.

Who Should Use E-Trade?

E-Trade is a great option for beginning investors, in part because the site is fairly easy to use. It has a lot of online tips and tools that will help you understand what you’re doing and walk you through the process of investing and stock trading. If you feel confused at any point and want more guidance, you can use the live chat feature E-Trade offers. You’ll get to talk to a live representative, which can be a refreshing change for people who do better with real interaction.

If you’re uncomfortable at the thought of going it alone, E-Trade gives you the option of setting up a commission-free, diversified, pre-built portfolio.

In addition to beginners, E-Trade is a decent choice for people who don’t have much money up front when they begin investing. You’ll need $500 to get started with an account. That may be too much for some people, but it’s not outrageous.

Another type of person who may benefit from E-Trade includes those who like to frequently trade. That’s because the price per trade comes down for more active traders. They are upgraded to the free E-Trade Pro platform with a lower cost per trade if they reach more than 30 trades per quarter.

E-Trade: Pros and Cons

Like any site, E-Trade has upsides but definite downsides, as well. Let’s look at some of the hits and misses you’ll experience when dealing with E-Trade.

Pros
It’s a great place to learn about investing.
It gives a good mix of investments to choose from, including mutual funds, bonds, stocks, futures, options, and ETFs.
E-Trade offers way more than just stock buying and trading. You have the option to get a mortgage, open a checking account, or set up retirement accounts such as IRAs, which can help you reach long-term goals such as spending retirement traveling.
Although it is an online broker, E-Trade also has more than 30 branch locations, which can be a major advantage for people who want the opportunity to visit a brick-and-mortar place of business if necessary.
E-Trade offers a current promotion where you can get up to $600 and get 60 days of commission-free options and stock trades if you deposit or transfer more than $10,000.
It offers two free mobile apps to keep you up-to-date anywhere you are.
Cons
The website has all the information you need to decide whether you want to invest with E-Trade and how to navigate the system, but the information can be hard to find at times.
It will cost you $6.95 per trade if you aren’t a frequent trader, which isn’t the cheapest commission you’ll find.
You’ll need at least $500 to get started unless you opt for an IRA, which doesn’t have a minimum amount requirement.

Does E-Trade Beat Competitors?

Comparing the best financial products is never easy because some excel in certain areas but fall short in others. Determining if E-Trade beats its competitors depends upon what your goals are and how frequently you plan to trade or use the online tools.

E-Trade has a lot of great points to it, including the big selection of investment options it offers and the supportive tools you’ll have at your disposal, but when it comes to trading fees, there are other sites that offer a more competitive rate, such as Ally Invest, which charges traders a $4.95 fee per trade.

While there are cheaper trading options, E-Trade is comparable to other sites like TD Ameritrade, which also charges a $6.95 flat commission rate.

However, TD Ameritrade does have an advantage when compared to E-Trade for certain investors because it doesn’t charge a minimum amount to get started investing. That can be attractive to would-be investors who don’t feel comfortable starting with a $500 investment.

Is E-Trade for You?

Now that you’ve learned a bit more about E-Trade and what it offers you as an investor, you’ll have a better understanding of whether it’s right for you. While it won’t be right for all types of investors, if you’re looking for a place that’s geared toward taking some of the intimidation factors out of investing, this may be a good place for you to begin.

Everyone has to start somewhere, and E-Trade can be a good home for someone who wants to learn but doesn’t have a lot of money to play with yet.