E*TRADE Review: Morgan Stanley's Muscle Behind a Veteran
9 min read
Share:
Key Takeaways
E*TRADE offers $0 commissions on stocks and ETFs with no account minimums, making it competitive for basic investing.
Options trading at $0.65 per contract is standard but can drop to $0.50 with 30+ quarterly trades, though Robinhood and Webull offer $0 options.
OTC stock trading fees of $6.95 per trade are significantly higher than competitors like Fidelity and Schwab who charge nothing.
Margin rates are steep, starting at 9.95% base with accounts under $10K charged 12.45%, placing E*TRADE on the higher end compared to competitors.
Morgan Stanley's backing has transformed E*TRADE into a full-service financial hub beyond its original discount brokerage roots, though fee complexity increases beyond basic stock/ETF trading.
E*TRADE is one of the original online brokerages, and now it's got Morgan Stanley's backing. That matters. Since the 2020 acquisition, E*TRADE has quietly become something more than the scrappy trading platform that ran those famous baby commercials — it's now a full-service financial hub with banking, investing, managed portfolios, and retirement planning all under one roof.
The headline numbers are competitive: $0 commissions on stocks and ETFs, $0.65 options contracts (dropping to $0.50 for active traders), and no account minimums on standard brokerage accounts. They've also layered in Morgan Stanley Private Bank products — a Premium Savings Account paying 3.75% APY and checking accounts with worldwide ATM fee refunds. For someone who wants investing and banking in one place, that's genuinely useful.
But "full-service" can also mean "sprawling and complicated." E*TRADE offers so many account types and platforms that newcomers might feel overwhelmed. And some fees — margin rates, OTC stock commissions, broker-assisted trades — are higher than you'd find at Fidelity or Schwab. Let's break it all down.
Fees
Account Types
Platforms and Tools
Who It's For (And Who Should Look Elsewhere)
How It Stacks Up
Conclusion
E*TRADE in 2026 is a solid, full-featured broker that benefits enormously from Morgan Stanley's backing. The core proposition is strong: $0 commissions on stocks and ETFs, a genuinely excellent options trading platform, wide account selection, and integrated banking with competitive savings rates. The Morgan Stanley merger has added resources without stripping away what made E*TRADE good in the first place.
The weaknesses are real but manageable. Margin rates are high, OTC stock fees feel outdated, and the sheer number of platforms and account types can be overwhelming. There's no direct crypto trading, which matters to some investors and is irrelevant to others.
Would I use it? For options trading and retirement accounts — absolutely. Power E*TRADE is one of the best options platforms available, and the range of IRA and small business retirement accounts is hard to beat. For a simple buy-and-hold stock portfolio, Fidelity or Schwab might be marginally better. But E*TRADE is a strong contender that most investors would be happy with, especially if they value having banking and investing under one roof.
Disclaimer: This content is AI-generated for informational purposes only and does not constitute financial advice. Consult qualified professionals before making investment decisions.
The fee structure is straightforward for basic investing, but gets complicated once you move beyond stocks and ETFs. Here's what you'll actually pay:
The free stuff:
Stocks & ETFs: $0 commission for online US-listed trades
Mutual funds: $0 for no-load, no-transaction-fee funds
U.S. Treasury auctions & secondary trades: $0
Options exercise/assignment: $0
Account maintenance: $0 — no annual fees, no minimums on standard brokerage
Where it costs money:
Options: $0.65 per contract, dropping to $0.50 if you make 30+ trades per quarter. That's in line with Schwab and Fidelity's $0.65, though Robinhood and Webull charge nothing
Futures: $1.50 per contract, per side (plus exchange and NFA fees). Crypto futures are pricier at $2.50 per contract, per side
Bonds & CDs: $1 per bond on online secondary trades (minimum $10, maximum $250)
OTC stocks: $6.95 per trade ($4.95 for active traders with 30+ trades/quarter). That's steep — Fidelity and Schwab don't charge extra for OTC trades
Broker-assisted trades: $25 surcharge on top of any applicable commissions. Avoid calling unless you absolutely have to
Directed orders via E*TRADE Pro: $0.005 per share to route to a specific ECN
Margin rates are on the high side. The base rate is 9.95% (as of December 2025), and what you actually pay depends on your balance:
Under $10K: 12.45%
$10K–$25K: 12.20%
$25K–$50K: 11.95%
$50K–$100K: 11.45%
$100K–$250K: 10.95%
$250K–$500K: 10.45%
$500K+: Call for a custom rate
These margin rates are notably higher than Interactive Brokers (which charges around 6.8%–7.8% for most tiers). If you trade heavily on margin, E*TRADE isn't your cheapest option.
Managed Portfolios (Core Portfolios): 0.30% annual advisory fee with a $500 minimum. That's competitive with Schwab Intelligent Portfolios Premium but more expensive than Schwab's basic robo-advisor (which is free with a $5,000 minimum). It's cheaper than Betterment's 0.25%... wait, no — it's actually slightly more expensive. But E*TRADE bundles it with access to Morgan Stanley research, which adds value.
Dime Buyback Program: A nice perk — you can close short option positions priced at $0.10 or less for free. Saves active options traders a few bucks over time.
E*TRADE offers one of the widest selections of account types among online brokers. This is where the Morgan Stanley merger shows its muscle.
Brokerage accounts:
Standard brokerage (taxable)
Custodial accounts (UGMA/UTMA for minors)
Coverdell Education Savings Account (ESA)
Retirement accounts:
Traditional IRA
Roth IRA
Rollover IRA (for old 401(k) money)
Inherited (Beneficiary) IRA
IRA for Minors
E*TRADE Complete IRA — a unique product for investors over 59½ that adds free checking, bill pay, and ATM/debit card access to your IRA. Genuinely handy for retirees drawing income
What you can trade: Stocks, ETFs, options, futures, mutual funds, bonds, CDs, and Treasury securities. No direct cryptocurrency trading — but they do offer exposure through crypto-related ETFs and crypto futures. That's a gap compared to brokers like Robinhood or Webull that offer spot crypto.
The breadth here is impressive. Very few brokers offer individual 401(k)s, SIMPLE IRAs, Coverdell ESAs, and a Complete IRA for retirees all in one place.
E*TRADE runs five separate platforms, which is either impressive or confusing depending on your perspective:
For active traders:
Power E*TRADE Pro — downloadable desktop platform with advanced charting, nearly unlimited customization, and complex order types. This is the serious trading tool
Power E*TRADE Web — rated #1 web trading platform by Stockbrokers.com for 13 consecutive years. No download required, but still packs advanced features
Power E*TRADE App — mobile version with single-ticket trading for stocks, ETFs, options, and futures
For everyday investors:
E*TRADE Web — the classic platform, straightforward and clean
E*TRADE App — award-winning mobile app for trading, portfolio tracking, and account management
The Power E*TRADE suite is genuinely good. The options chain visualization, snap-ticket trading, and risk/reward analysis tools rival what you'd find at TD Ameritrade's thinkorswim (now Schwab). For options and futures traders, it's one of the better platforms out there.
Research and education are solid too. They run weekly live webinars (Wednesdays at 11 a.m. ET) for beginners, and the educational content covers everything from basic investing concepts like asset allocation and risk tolerance to advanced options strategies.
Security: E*TRADE offers a Customer Protection Guarantee — $0 liability for unauthorized account activity, plus fraud protection, privacy protection, and optional Digital Security ID for extra login security.
E*TRADE is a strong fit for:
Options and futures traders who want advanced platforms without paying a premium. The Power E*TRADE suite is legitimately excellent, and the Dime Buyback Program saves active options traders real money
Retirees and near-retirees who want investing and banking in one ecosystem. The Complete IRA with checking and ATM access is unique, and the Premium Savings Account at 3.75% APY is competitive
Small business owners who need retirement plan options. The range of SEP IRAs, SIMPLE IRAs, and Individual 401(k)s is broader than most online brokers offer
Morgan Stanley clients or people who want access to that advisor network. The integration is tighter than a standalone broker could offer
401(k) rollovers — E*TRADE's Rollover IRA process is straightforward, and the breadth of investment options is good
Look elsewhere if:
You trade on margin frequently — those 10%+ margin rates are painful compared to Interactive Brokers
You want direct crypto trading — E*TRADE only offers crypto exposure through ETFs and futures, not spot trading
You prefer simplicity — five platforms, dozens of account types, and Morgan Stanley banking products create a cluttered experience. Fidelity or Schwab feel more streamlined
You trade OTC/penny stocks — $6.95 per trade is a relic from 2010, and competitors don't charge this
You want the absolute lowest cost on everything — Interactive Brokers beats E*TRADE on margin, options (with their Pro tiered pricing), and international markets
In the post-commission-wars era, every major broker offers $0 stock and ETF trades. So the real differentiators are everything else.
vs. Fidelity: Fidelity has no OTC stock surcharge, fractional share trading, better mutual fund selection (including zero-expense-ratio index funds), and slightly better research. ETRADE wins on trading platforms (Power ETRADE is better than Fidelity Active Trader Pro) and banking integration.
vs. Charles Schwab: Very similar overall. Schwab's free robo-advisor (Intelligent Portfolios) undercuts ETRADE's 0.30% Core Portfolios fee. Schwab also inherited thinkorswim from TD Ameritrade, which now rivals Power ETRADE. It's close, but Schwab edges ahead on sheer scale and simplicity.
vs. Robinhood: Robinhood is cheaper — free options, free crypto, no OTC fees. But it lacks retirement accounts, bonds, futures, managed portfolios, and any semblance of research or educational tools. E*TRADE is for grown-up investors; Robinhood is for people who think they'll never need an IRA.
vs. Interactive Brokers: IBKR crushes ETRADE on margin rates, international market access, and cost for high-volume traders. But IBKR's interface is notoriously intimidating. ETRADE is far more approachable.
E*TRADE sits in the upper-middle tier — not the absolute cheapest, not the most premium, but a well-rounded broker that does most things well and a few things (options platforms, account variety, banking integration) particularly well.