E*TRADE is a brokerage platform, not a savings account or investment advisor

E*TRADE is a company that holds your money and lets you buy and sell stocks, bonds, mutual funds, and other investments through their website or app. They do not tell you what to buy, manage your money for you, or may provide any returns. You make the decisions; E*TRADE executes the trades and keeps your account secure.

Whether E*TRADE is "good" depends on what you are trying to do and how much you already know about investing. Someone who wants to pick individual stocks and pay low trading fees might find it useful. Someone who wants a professional to manage their money, or who is just starting out and wants guidance, would likely be frustrated.

E*TRADE charges no commission on stock and ETF trades, which is standard across most major brokerages now. They do charge fees for certain services — financial advisory accounts, margin accounts, and some mutual funds carry costs. The platform itself is free to use if you only buy and sell stocks and ETFs.

Key Takeaways

  • E*TRADE lets you trade stocks and ETFs commission-free, but you are responsible for deciding what to buy and when to sell.
  • The platform works best for people who already understand investing or are willing to learn; it does not offer personalized investment advice.
  • E*TRADE charges fees for advisory services, margin borrowing, and some mutual funds, so read the fee schedule before opening an account.
  • Your money is protected up to $500,000 per account type through SIPC insurance, which covers brokerage failure but not investment losses.

What you can and cannot do on E*TRADE

E*TRADE lets you open a regular brokerage account and trade during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays). You can also trade after hours, though spreads are wider and volume is lower. You can set up automatic investments, use research tools to look up company information, and track your portfolio in real time.

E*TRADE does not manage your money unless you pay for their advisory service. They do not tell you which stocks to buy. They do not rebalance your portfolio automatically. They do not adjust your strategy based on your age or risk tolerance unless you hire an advisor, which costs money. If you want someone else to make investment decisions, E*TRADE is not the right fit.

You can hold cash in your E*TRADE account, but it earns very little interest — rates change with the market and are typically lower than what you would get from a high-yield savings account at a bank. Do not use E*TRADE as a place to park emergency savings.

Fees and costs you should know about

Stock and ETF trades cost nothing. Mutual fund trades may carry a transaction fee depending on the fund. If you want a financial advisor to manage your account, E*TRADE charges between 0.30% and 0.50% of your assets per year, depending on how much money you have in the account.

If you borrow money to invest (called margin), E*TRADE charges interest on the borrowed amount. The rate varies but is typically between 8% and 12% per year. If you do not understand margin, do not use it.

E*TRADE also charges inactivity fees on some account types if you do not trade for a set period. Check the current fee schedule on their website before opening an account, as fees change.

How your money is protected

E*TRADE is a member of SIPC (Securities Investor Protection Corporation), which means your account is insured up to $500,000 if E*TRADE fails as a company. This covers the cash and securities in your account but does not protect you if your investments lose value. If you own a stock and it drops 50%, SIPC does not reimburse you — that is a market loss, not a brokerage failure.

E*TRADE also uses encryption and two-factor authentication to protect your login. If someone hacks your account and makes unauthorized trades, E*TRADE has a process to investigate and may reverse fraudulent transactions, though this is not may provide.

Your account is held in your name, not E*TRADE's name. If E*TRADE goes out of business, your securities are returned to you, not sold off to pay the company's debts.

Who E*TRADE works well for

E*TRADE is a good fit if you want to buy and hold stocks or ETFs without paying commissions, and you are comfortable researching investments on your own. It works for people who already have some investing knowledge or are willing to learn through books, courses, or financial websites.

E*TRADE also works for people who want to trade frequently — day traders and active investors benefit from the low commissions and real-time data. The platform has charting tools and screeners that appeal to people who spend time analyzing stocks.

If you have a large amount of money to invest, E*TRADE's advisory service might make sense, though you should compare their fees to other robo-advisors and traditional financial advisors first.

Who should look elsewhere

If you are new to investing and want guidance, consider a robo-advisor like Vanguard Personal Advisor Services or Betterment instead. These platforms use algorithms to build a diversified portfolio for you based on your goals and risk tolerance, and they charge lower fees than E*TRADE's advisory service.

If you want a human financial advisor who knows your full financial picture and can help with tax planning, retirement, and insurance, a fee-only financial planner is a better choice than E*TRADE.

If you want to keep your money in a savings account earning interest, use a bank or credit union, not a brokerage. E*TRADE is for investing, not saving.

How to get your free guide if you decide to open an account

You will need a Social Security number, a government-issued ID, and proof of address (a utility bill or bank statement). The account opening process takes about 10 minutes online. You can fund the account by linking a bank account or mailing a check.

Before you fund the account, decide what you want to buy. If you do not have a plan, do not open the account yet. Spend time learning about stocks, ETFs, and diversification first. Free resources like Investopedia, the SEC's investor education page, and library books can help.

Start small. Do not invest money you cannot afford to lose. Do not borrow on margin until you fully understand how it works. Do not try to time the market or chase hot stocks.

Frequently Asked Questions

Does E*TRADE may provide my investments will make money?

No. E*TRADE is a platform that executes trades. Your investments can go up or down in value based on market conditions. E*TRADE does not may provide returns or protect you from losses.

Can I lose more money than I put in?

If you only buy stocks and ETFs with cash, the most you can lose is what you invested. If you use margin (borrowed money), you can lose more than your initial investment. Avoid margin unless you fully understand the risks.

Is E*TRADE safe?

E*TRADE is regulated by the SEC and FINRA, and your account is insured by SIPC up to $500,000. Your login is protected by encryption and two-factor authentication. However, no platform is 100% safe — use a strong password and do not share your login information.

How long does it take to withdraw money from E*TRADE?

Withdrawals to your linked bank account typically take 1 to 3 business days. If you sell a stock, the proceeds settle in 2 business days before you can withdraw them.

Can I use E*TRADE for retirement savings?

Yes, E*TRADE offers IRAs and 401(k) rollovers. However, you still have to choose what to invest in — E*TRADE does not automatically set up a retirement portfolio for you unless you pay for their advisory service.