E*TRADE Review: Where Morgan Stanley Meets DIY
Key Takeaways
- E*TRADE charges $0 for stocks and ETFs but OTC trades at $6.95 remain a sore spot when Fidelity and Schwab charge nothing.
- Margin rates start at 12.45% for small accounts — nearly double Interactive Brokers — making leveraged trading expensive.
- The Morgan Stanley banking integration with 3.75% APY savings and worldwide ATM refunds is a genuine competitive advantage.
- Power E*TRADE is among the best options trading platforms available, especially at $0.50/contract for active traders.
- Best suited for options traders and retirement savers who want investing and banking under one roof.
E*TRADE has spent more than three decades trying to be everything to everyone — and with Morgan Stanley's backing since 2020, they're closer than they've ever been.
The pitch is straightforward: $0 commissions on stocks and ETFs, an options platform (Power ETRADE) that rivals thinkorswim, retirement accounts for every life stage, and now a full banking suite with savings rates that embarrass most brick-and-mortar banks. At 3.75% APY on their Premium Savings Account, ETRADE is genuinely competitive with the likes of Marcus and Ally.
But here's the thing nobody talks about: ETRADE is really two brokers stitched together. There's the sleek, commission-free stock and ETF experience that competes head-to-head with Schwab and Fidelity. Then there's the fee-heavy underbelly — $6.95 for OTC stocks, 12.45% margin rates for smaller accounts, and a $25 surcharge every time you pick up the phone for a broker-assisted trade. Knowing which ETRADE you're getting depends entirely on how you trade.
What It Costs
The core pricing is hard to fault. Zero commissions on US-listed stocks, ETFs, and mutual funds. Options run $0.65 per contract, dropping to $0.50 if you're active enough (30+ trades per quarter). That active trader discount also cuts OTC stock trades from $6.95 to $4.95 — still steep when Fidelity and Schwab charge nothing for the same trades.
Futures traders pay $1.50 per contract per side, which is standard. Crypto futures are pricier at $2.50. Bond trades cost $1 per bond on secondary market transactions.
Where it gets expensive:
- Margin rates: Base rate of 9.95% as of December 2025. Accounts under $10,000 pay 12.45% — that's nearly double what Interactive Brokers charges. Even at the $250K–$500K tier, you're still paying 10.45%. For anything above $500K, you have to call and negotiate.
- OTC stocks: $6.95 per trade is a relic from a different era. Yes, the active trader rate drops this to $4.95, but Fidelity and Schwab charge zero.
- Broker-assisted trades: $25 surcharge. There's no scenario where calling a broker should cost more than a nice lunch.
Managed portfolios (Core Portfolios) charge 0.30% annually with a $500 minimum. That's reasonable — roughly in line with Betterment's 0.25% and cheaper than most human advisors.
The Banking Angle
This is where the Morgan Stanley acquisition actually pays off for customers. E*TRADE's banking products — all through Morgan Stanley Private Bank (FDIC insured) — are competitive enough to replace a standalone bank account.
The Premium Savings Account offers 3.75% APY for the first six months, with no monthly fees and no minimum deposit. After the promo period, you'll earn the base rate, which has historically been competitive but not chart-topping. Still, having your savings account sitting right next to your brokerage account with instant transfers is genuinely convenient.
Max-Rate Checking comes with ATM and foreign transaction fee refunds worldwide — a perk that usually requires a premium banking relationship. The $15 monthly fee is waived with a $5,000 average balance, which is reasonable.
They're also pushing home loans and lines of credit backed by your portfolio. The integration between banking and brokerage is seamless, and for someone consolidating their financial life, this is E*TRADE's strongest argument against Fidelity or Schwab.
Who Should Use It (and Who Shouldn't)
E*TRADE is excellent for:
- Options traders: Power E*TRADE is one of the best options platforms available. The $0.50 per contract rate for active traders is competitive, the analytics are strong, and the mobile experience is polished.
- IRA and retirement savers: The range of retirement accounts is staggering — Traditional, Roth, Rollover, Inherited, SEP, SIMPLE, Individual 401(k), and the unique E*TRADE Complete IRA for retirees over 59½ that adds checking and ATM access to your retirement account.
- All-in-one seekers: If you want investing, savings, checking, and retirement under one roof with a single login, E*TRADE delivers.
Look elsewhere if:
- You trade on margin regularly: Those 10–12% rates will eat into returns fast. Interactive Brokers is the clear winner here at roughly half the cost.
- You trade OTC or penny stocks: $6.95 per trade when competitors charge nothing. No justification for this in 2026.
- You want direct crypto trading: E*TRADE offers crypto futures but not spot crypto. Robinhood and Schwab have moved ahead here.
- You're cost-obsessed on everything: Fidelity's zero-expense-ratio index funds and consistently lower margin rates make it the pure cost leader.
The Verdict
E*TRADE is a strong broker that sits comfortably in the top tier — not the absolute cheapest at anything, but genuinely good across more categories than almost any competitor. The Morgan Stanley backing has added real substance: better banking, better research access, and the financial stability of a $1.4 trillion parent company.
The best comparison isn't Robinhood (too basic) or Interactive Brokers (too complex). It's Schwab and Fidelity. Against those two, E*TRADE wins on options platforms and banking integration, ties on basic trading costs, and loses on margin rates and OTC fees.
If I were choosing a single broker today for a combination of active trading and long-term retirement investing, E*TRADE would be on my shortlist. The options platform alone justifies the account, and the banking integration means one fewer set of passwords and transfer delays in your financial life.
Frequently Asked Questions
Sources & References
us.etrade.com
us.etrade.com
us.etrade.com
Disclaimer: This content is for informational purposes only and does not constitute financial advice. Consult qualified professionals before making investment decisions.