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E-Trade fees explained

Jun 2019
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Overview of E-Trade fees and charges

E-Trade logo

When it comes to brokerage fees E-Trade shows a mixed picture: some fees are high but some are low. First you need to figure out your approach or you should use our questionnaire to be able to tell whether E-Trade fees are an advantage for you. Continue reading about E-Trade fees and charges to see if this is the right brokerage for you or a similar broker like Interactive Brokers or TD Ameritrade is better for you.

Here's a high level overview of E-Trade's fees

E-Trade Fees snapshot
Assets Fee level Fee terms
US stock fee Average $6.95 per trade, but if you trade 30+ per quarter $4.95 per trade, there are also ~280 free ETFs
EURUSD fee - Not available
US tech fund fee High $19.99 per trade, ~4,500 free mutual funds
Inactivity fee Low No inactivity fee

E-Trade fees
E-Trade fees explained

Online brokerages in general charge much lower brokerage fees than traditional brokerages do - this is largely due to the fact that online brokerages' businesses can be much better scaled: From a purely technical standpoint it doesn't make that much of a difference for them if they have 100 or 5000 clients.

This is not to say however that they don't have any fees at all. They make money by charging you at various events for various rates. Usually you need to keep an eye on these 3 types of fees:

  • Trading fees - these are brokerage fees that you pay when you actually do a trade, i.e. buying an Apple stock or an ETF. What you pay is either a commission, a spread or financing rate. Some brokers apply all of these.
    • A commission is either based on the traded volume or it is fixed.
    • A spread is the difference between the buy price and the sell price
    • Financing rate or overnight rate is charged when you hold your leveraged positions for more than one day.
  • Non-trading fees. These occur related to some operations you make in your account, i.e. depositing money to your account, withdrawing money from it or not trading for an extended amount of time.

We compare E-Trade fees with its closest competitors, Interactive Brokers and TD Ameritrade.

E-Trade fees
E-Trade trading fees

We see E-Trade's trading fees to be high because they charge more than most of its competitors.

Let's break down the trading fees into the different asset classes available at E-Trade.

Trading fees

E-Trade's trading fees are average.

Stock fees and ETF fees

E-Trade has low stock trading fees.

Stock fees of a $2,000 trade
E-Trade Interactive Brokers TD Ameritrade
USA $7.0 $1.0 $7.0
UK - $8.7 -
Germany - $4.6 -

Fund fees

E-Trade fund fees are high.

A $2,000 fund buy fees
E-Trade Interactive Brokers TD Ameritrade
USA tech fund buy $20.0 $15.0 $50.0
Europe stock fund buy - $4.6 -

Bond fees

E-Trade has low bond fees.

Bond fees of a $10,000 trade
E-Trade Interactive Brokers TD Ameritrade
USA $0.0 $5.0 $0.0
Europe - $10.0 -

Options fees

E-Trade's options fees are high.

Stock index options fees of 10 contracts
E-Trade Interactive Brokers TD Ameritrade
USA $14.5 $7.0 $14.5
UK - $24.7 -
Germany - $19.4 -

Futures fees

E-Trade's futures fees are low.

Stock index futures fee of 10 contracts
E-Trade Interactive Brokers TD Ameritrade
USA $15.0 $8.5 $22.5
UK - $24.7 -
Germany - $22.8 -

Financing rates

E-Trade financing rates are high.

If you want to trade on margin and prefer to hold your positions long, financing costs can be significant.

E-Trade yearly financing rates
E-Trade Interactive Brokers TD Ameritrade
Apple financing rate 10.8% 5.8% 10.8%
Vodafone financing rate - 3.9% -
EURUSD financing rate - 4.9% 10.5%
EURGBP financing rate - 3.3% 10.5%

E-Trade fees
E-Trade non-trading fees

When it comes to looking at all the non-trading fees E-Trade is a cheap broker. This means that they don't charge you a lot for non-trading related activities on your trading account, like withdrawal fee.

Non-trading fees include various brokerage fees and charges at E-Trade that you pay not related to buying and selling assets. Among some others, typical non trading fees are withdrawal fee, deposit fee, inactivity fee and account fee.

A high level overview of how E-Trade stacks up in non-trading fees
E-Trade Interactive Brokers TD Ameritrade
Withdrawal fee $0 $0 $0
Deposit fee 0 0 0
Inactivity fee No Yes No
Account fee No No No

E-Trade fees
E-Trade deposit fee

Deposit fees are applied when you send money to your trading account from your bank account. Usually brokers don't charge money for that and E-Trade is not different: you will see the exact same amount on your brokerage account that you sent by any of the deposit methods E-Trade offers.

E-Trade deposit methods
E-Trade Interactive Brokers TD Ameritrade
Bank transfer Yes Yes Yes
Credit/Debit card No No No
Electronic wallets No No No
Deposit fee 0 0 0

E-Trade fees
E-Trade withdrawal fee

Unlike the majority of the online brokers we have reviewed E-Trade does not charge a withdrawal fee. This means that you'll see the same amount of money on your bank account that you transferred from your brokerage account.

E-Trade withdrawal fees and options compared
E-Trade Interactive Brokers TD Ameritrade
Bank transfer Yes Yes Yes
Credit/Debit card No No No
Electronic wallets No No No
Withdrawal fee with bank transfer $0 $0 $0

E-Trade fees
E-Trade inactivity fee

E-Trade does not apply an inactivity fee which is great because your account will not be charged even if you do not trade for a longer time period (months or years).

AUTHOR

Gergely Korpos
Gergely Korpos
Co-founder, CPO
Gergely's aim is to bring more clarity into personal investing. He has 10 years of experience in financial markets with GE Money, KPMG and MOL. He concluded thousands of trades as a commodity trader and financial portfolio manager
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