E-Trade is one of the oldest online brokerages. Their educational tools provide insights for brand new investors as well as those with more experience.
TL;DR – E-Trade is a powerful resource for frequent traders and people learning more about trading. If you are looking for a robo-advisor there are better options out there.
What is E-Trade?
E-Trade is a brokerage, financial advisor, online lender, bank and cash management service. They offer a broad variety of solutions for individuals and organizations alike.
Here are the accounts E-Trade currently offers to their customers.
- Coverdell ESA (Education Savings Account)
- Custodial Account
- Rollover IRA
- Roth IRA
- Traditional IRA
- Beneficiary IRA
- E-Trade Complete IRA
- IRA for Minors
- Core Portfolios
- Blend Portfolios
- Dedicated Portfolios
- Fixed Income Portfolios
- Individual & Roth Individual 401(k)
- SIMPLE IRA
- SEP IRA
- Profit-Sharing Plan
- Investment-Only Account
- Premium Savings Account
- Max-Rate Checking
- E-Trade Checking
It is easy to see E-Trade has offerings for people with almost any type of financial need. Other brokerages have fewer options available.
Here are a list of the investment options offered by E-Trade:
- Mutual Funds
- Bonds & CDs
The thing E-Trade is most known for is their trading platforms. They make a complex process easy with their intuitive online solutions. There are three different ways to trade (more on that later). E-Trade Web, Power E-Trade and E-Trade Pro offer options for new and veteran investors alike.
Who Created E-Trade?
In 1982 William A. Porter and Bernard A. Newcomb founded E-Trade. The company went public in 1996.
In 1982 E-Trade began with only $15,000 in funding, and by 1996 they processed 8,000 trades a day with a quarterly revenue of $15 million. In 2018 E-Trade reported $2.873 billion in revenue.
While the initial launch focused on an online brokerage, E-Trade added online banking to their list of services in the early 2000s, only to be crushed during the subprime mortgage crisis in 2007.
How Does E-Trade Work?
It’s important to clarify E-Trade vs. E-Trade Bank vs. Stock Plans. The following describes features of E-Trade, but does not go into detail on their banking features or stock plans.
E-Trade Web Platform
Build a Portfolio
With E-Trade web you have the ability to build a stock portfolio with your preferences in mind. If you qualify you can even invest in IPOs. If you open an account now you can get commission-free trades on your first 60 days, plus $600. After that it is $4.95 for 30+ trades a quarter and $6.95 for less than 30 trades a quarter.
Use real time quotes, news, charts and commentary to make informed investment decisions. E-Trade has screeners within their platform to give you guidance when making investment decisions. They also have free research from independent sources like TipRanks, Credit Suisse and Thompson Reuters.
Learn How To Invest
If you are new to investing there are a lot of free educational tools with E-Trade. You can get free guidance on setting financial goals, take classes, watch videos, attend webinars or even go to live events to better understand your financial situation. E-Trade provides high quality, exclusive financial resources and education to their customers for no extra charge.
Helpful Financial Tools
Since E-Trade is also a bank, you get access to many features other brokerages don’t have. Write checks, pay bills, make unlimited money transfers and get a debit card all with your E-Trade account.
In addition to the robust desktop tool, E-Trade offers their application that allows you to do everything on the go. They also offer Bloomberg TV® as well as other news and research sources for you to better understand what is happening with current markets.
The E-Trade web platform offers a great solution for the average investor. A more serious investor wants more tools and insights, this is available through the Power E-Trade platform. The product is great, and E-Trade shows their commitment to constantly improving by documenting their previous releases and new features. Here is a breakdown of the features offered on this desktop and mobile application.
With interactive charts you gain better insight as you formulate trading strategies. With over 100 technical studies and 30+ drawing tools, there are almost endless ways to learn about your investments.
Technical Pattern Recognition Tool
This tool automatically adds information about patterns in stocks and what they mean. With this information an investor can better understand past and potential future behavior of a stock performance. While this is not necessarily investment advice, it does make the process of investing less of a guessing game. Learn more here.
With this tool you get a quick overview of the maximum potential profit, loss, break even point and a comparison of risk and reward. This quick visualization gives you an instant overview with minimal effort.
Using the spectral analysis tool you can the risk and reward of options trade. You can set up “what if” scenarios and explore the implications of your trades.
This tool gives you a birds-eye view of unusual activities in options or equities that have outsized volatility. With this information you can do more research or place trades based on your findings.
Bloomberg TV and News
Stream Bloomberg TV live right from the E-Trade platform to stay up to date with market news.
Though they specialize in solutions for traders, E-Trade is now exploring automating the investment process for younger audiences. They offer a Core Portfolios feature that requires a minimum $5,000 investment. Their annual fee is 0.30% and they do not offer tax-loss harvesting features like Wealthfront. While worth mentioning, it is not their best feature.
The top-tier brokerage platform only gets better when you throw in educational tools. With E-Trade, you don’t need an account to start learning about finances. Their website has an entire knowledge section, and they provide a huge selection of articles, webinars and live events for their customers to learn more about how to invest intelligently. They set their customers up for long term success.
4 reasons we love E-Trade
- Investing Platform – The E-Trade web platform and Power E-Trade give users the ability to do extensive research and perform trades with confidence. Their huge offering of features sets them apart as an education, research and investment platform.
- Investment Options – When you combine their brokerage and banking services, E-Trade offers almost every investment option available.
- Mobile Usability – E-Trade has some of the most robust yet easy to use mobile applications available. They commit to providing quality products usable on any device.
- Educational Tools – Many robo-advisors and brokerages offer investment advice. E-Trade stands out because they have great educational tools for people to use at their own pace. You can learn about a variety of topics before even opening an account.
Where E-Trade could improve.
- High Commissions – The $6.95 per trade fee is high compared to a broker like Ally Invest.
- High Minimum Balance – Brokerages like Robinhood allow you to buy stocks with no minimum account balance. For E-Trade users you need to have at least $500 to get started. This is not something everyone can afford as a beginner investor.
- Favors Active Traders – This ties back to the commissions pricing, but E-Trade has a platform that favors active traders. While their educational tools are helpful, the platform may be intimidating or confusing for first time investors.
E-Trade Review: The Bottom Line
For experienced investors, E-Trade may be the right choice. If you are new to investing, or looking for a robo-advisor it makes sense to look elsewhere.