I am almost certain you know about E*Trade. Maybe a few years ago if I mentioned E*Trade you would be clueless, but not anymore with the likes this during the Super Bowl:

Yeah, the talking baby has pushed E*Trade into the mainstream. And that is a good thing because E*Trade is a solid company to have your investments with. Below is my full review of E*Trade showing you why you should consider it if you are looking for an online discount broker. Be sure to read my other reviews of the top online brokers as well, including:

My E*Trade Review

E*Trade History and Background

E*Trade was founded in 1982 and was originally a place for investors who were willing to pay more for better information and service. As the years passed however, the philosophy changed and E*Trade turned into a discount broker, offering commissions in-line with the other big players in the industry. But don’t think that their service was reduced as well, because it wasn’t. More on this below.

Things were going well at E*Trade until the early 2000’s. In 2003, they tried to merge with TD Waterhouse, but the merger failed. Then in 2005, they put in an offer to buy Ameritrade, but that too was rejected. Later in 2005 however, the winds shifted for E*Trade. They bought both HarrisDirect and Brown and Company.

When the housing bubble hit, E*Trade survived by selling off its subprime mortgage portfolio to Citidel. Had they kept that portfolio of subprime debt, there is a good chance E*Trade would not be around today, or at least not as we know it. Fortunately, they made the right decision and are now stronger than ever and a leader in the online discount broker space.

E*Trade Features

Now that you know a little more about E*Trade, let’s talk about their features that make them so great. I’ll just touch on a handful here and go into more detail further down.

• $7.99 online trades (note that E*Trade does have a tiered commission schedule.) The $7.99 price is for those investors that place between 150 1,000 trades per quarter. Less than 150 trades costs you $9.99 in commission. If you place more than 1,500 trades, you can negotiate a lower commission directly.
• No surcharge on penny stocks. Many brokers charge extra for investing in penny stocks, but not E*Trade.
• Streaming quotes are free for investors. Most other brokers give you free delayed quotes (they are delayed up to 15 minutes). If you want streaming quotes from these brokers, it will cost you.
• Futures and Forex trading is included in your account. Most other brokers make you open a second account or apply to be able to trade futures and/or forex. With E*Trade, you have the ability to trade these when you open your account.
• Trade foreign stocks. With an E*Trade account, you can trade stocks in France, Germany, Hong Kong, United Kingdom and Canada.
• Tons of investment options for investors. Choose from stocks, bonds, exchange traded funds, mutual funds (over 8,000), options and CDs. You can invest in non-retirement, retirement and educational accounts as well.
• Easy to use website. There is a lot to be said when you find a website that is easy to navigate and find what you are looking for. I found this to be the case with E*Trade. I had no issues finding what I was looking for.

• E*Trade Pro for some clients. If you want more research and tools at your fingertips, look no further than E*Trade Pro. This is a desktop client you install on your PC or Mac. The cost is free if you make 30 trades per quarter, otherwise it is $99/moth. Its features include:

• Extended hours trading
• Technical screening and backtesting
• Sector and industry tracker
• Options tools (including straddles, butterflies, iron butterflies, condor and iron condor)
• Real-time streaming news
• Real-time gains/losses and portfolio value
• Advanced charting
• Live streaming of CNBC
• Excel manager (import/export data to Excel)
• Access to the E*Trade community
• Fully customizable

E*Trade Benefits

The benefits to E*Trade are enormous. They are a great choice if you are an active investor (E*Trade Pro alone is incredible. I’m a buy and hold guy and was blown away at this service they offer) or even if you are a passive investor. The site is very user friendly and there is a ton of free research and education tools to help you be a successful investor.

E*Trade even has its own bank, so transferring money is no longer a hassle. With their checking account you get a free ATM/Visa debit card, free online bill pay, free ATM withdraws, unlimited ATM refunds and same day fund transfers between your checking account and your E*Trade investment accounts.

Other benefits include:

Low account opening fee. You need $500 to open an account. This is a great thing for those looking to invest with a little bit of money. If you want to have the ability to trade on margin, the account minimum is $2,000.

Amazing Customer Service. You can email, call or chat with representatives or walk into one of their branches. If you call or chat, customer service is available 24/7.

Low Fees. E*Trade has close to 1,500 mutual funds that can be bought/sold without a fee. They also offer 100 commission free ETFs as well (learn why this is important here ). There is no inactivity fee either. The only fees you will encounter are the typical wire fees, return check fees, etc. that everyone else charges.

Downsides To E*Trade

With all of the great things E*Trade offers, there has to be some downsides right? Here are a few that I notice:

• Trading Commission. The price for those not trading a lot is $9.99. While this is not a deal-breaker, you can get a lower commission by going with a competitor to E*Trade. (See my online broker comparison chart to compare various brokers.) But with the other things you get – research, commission free ETFs, the higher commission isn’t a huge deal.
• Low Interest Bank Account. If you open an E*Trade checking account, you won’t be getting much in the way of interest. Currently, you earn 0.01% on balance up to $5,000. Plus, if you don’t have at least $5,000 in the account, then the service charge is $15! Luckily, you don’t need the bank account to have an investment account. Personally, I would pass on the bank account and look into Capital One 360. No fees and a higher interest rate.

Who Is E*Trade For?

If you are an active trader, E*Trade is the best option of all of the brokers I’ve reviewed to date. I encourage you to spend 15 minutes looking at the E*Trade Pro video. Trust me when I say it will blow your mind with how in-depth it gets. It’s like Christmas morning multiplied by 10 for active traders. Here is a screenshot as a tease:

For passive traders, E*Trade is a competitive fit. With close to 1,500 no fee mutual funds and 100 no fee ETFs, you can easily place trades and never pay a dime for them.

In the end, if you are considering an online broker, you can’t go wrong with E*Trade. To go to the E*Trade website to learn more or open an account, click here. If you have any questions about this review, investing in general or any of the other online brokers, be sure to reach out to me and I’ll do my best to help you in any way I can.