Have you been considering taking control of your investments and perhaps opening a brokerage account? If ETRADE has crossed your mind, a common initial question is: "How much does it cost to open an ETRADE account?" The good news is, for many, the answer is surprisingly little to nothing in terms of an initial deposit to simply open the account. However, there are nuances, and understanding the full picture of potential costs and minimums is key. Let's break it down step-by-step.
The Cost of Entry: How Much to Open an E*TRADE Account?
E*TRADE, a popular online brokerage firm now part of Morgan Stanley, has made it quite accessible for new investors. You'll be pleased to know that for many of their common account types, there's no minimum deposit required to open a new account. This is a significant advantage for those just starting out or who prefer to fund their accounts gradually.
However, "no minimum to open" doesn't necessarily mean "no minimum to invest." While you can open the account with $0, you'll need to deposit funds to actually start trading or investing. And for certain specialized accounts or services, minimums may apply.
Step 1: Discover Your Investor Persona – What Kind of Account Do You Need?
Before you even think about funding, the first and most engaging step is to consider what kind of investor you are and what your financial goals are. Are you:
A beginner looking to buy a few stocks?
Planning for retirement with an IRA?
An active trader interested in options or futures?
Someone who wants to simply save money with a high-yield account?
Your choice of account type will significantly influence any potential minimums or fees you might encounter down the line. E*TRADE offers a wide range of accounts, each designed for different purposes:
Individual Brokerage Accounts
These are your standard investment accounts for buying and selling stocks, ETFs, mutual funds, and more. For these, E*TRADE generally has no minimum deposit to open.
Retirement Accounts (IRAs, Roth IRAs, Rollover IRAs, etc.)
Planning for your golden years? E*TRADE offers various IRA options. Similar to brokerage accounts, there's typically no minimum deposit to open a retirement account. However, if you opt for their automated investment management service, Core Portfolios, there is a $500 minimum to start investing through that particular service.
Bank Accounts (Checking, Savings, CDs)
E*TRADE, through Morgan Stanley Private Bank, also offers banking services. While a Premium Savings Account and Checking Account generally have no minimum deposit to open, their Max-Rate Checking Account has a $15 monthly fee that can be waived by maintaining an average monthly balance of at least $5,000. Certificates of Deposit (CDs) also typically have no minimums to open, but must be funded within 30 days.
Specialized Accounts (e.g., Futures, Portfolio Management)
For more specialized trading or managed portfolios, higher minimums or specific requirements might apply. For instance, futures trading involves different margin requirements.
Take a moment to reflect: What are your primary financial objectives right now? Knowing this will guide you in the right direction!
Step 2: The Online Application Process – A Smooth Ride
Once you've identified the type of account that suits you best, the next step is the online application. E*TRADE has streamlined this process, making it quite user-friendly.
Required Information for Opening an Account:
To comply with federal regulations and verify your identity, you'll typically need to provide:
Personal Information: Full name, address, date of birth, Social Security Number (SSN) or Tax Identification Number (TIN).
Contact Information: Phone number and email address.
Employment Information: Employer's name and address.
Financial Information: While not always required to open the account, you'll eventually need to link a bank account for funding.
Investment Experience: Questions about your investing goals and experience level help E*TRADE tailor their platform and resources to you.
The Application Steps Typically Involve:
Verify & Start Your Application: Confirm your identity.
Personal Information: Provide and review your details.
Account Preferences: Select features like electronic document delivery.
Confirm & Submit: Review everything before finalizing.
The entire online application can often be completed in just a few minutes.
Step 3: Funding Your E*TRADE Account – Getting Ready to Invest
This is where the "how much to open" question truly transitions into "how much to invest." While you can open the account with $0, you'll need to fund it to make any transactions. E*TRADE offers several convenient ways to deposit money:
A. Electronic Fund Transfer (ACH)
This is the most common and often easiest method. You can link your external bank account to your E*TRADE account and transfer funds electronically.
Availability: Funds typically become available within 3 business days for investing. Some or all of the funds may be available immediately for investment based on cleared equity in your E*TRADE Brokerage account.
Cost: Generally free.
B. Wire Transfer
For faster access to larger sums, wire transfers are an option.
Availability: Funds are usually available on the same business day if received before 6 p.m. ET.
Cost: E*TRADE charges a $25 fee for outgoing domestic wire transfers if done online (waived for checking/Max-Rate accounts) and by telephone. Incoming wires are typically free. Your originating bank may also charge a fee.
C. Check Deposit
You can deposit checks via mobile check deposit (using the ETRADE mobile app) or by mail.*
Availability: Funds may take up to 5 business days to clear.
Cost: Free.
D. Transfer an Existing Account
If you have investments with another brokerage, you can transfer your entire account (or a portion of it) to ETRADE.* This is known as an ACAT (Automated Customer Account Transfer) transfer.
Availability: Electronic full brokerage transfers typically take around 10 business days. Paper requests can take 3 to 6 weeks.
Cost: ETRADE charges a $25 fee for partial transfers and a $75 fee for full transfers out of ETRADE. There are no fees to transfer into E*TRADE, but your old brokerage might charge an outgoing transfer fee.
E. Direct Deposit
You can set up direct deposit for your paycheck or other recurring income directly into your ETRADE bank or brokerage account.*
Availability: Funds are available within 1-2 pay cycles.
Cost: Free.
Pro Tip: While there's no initial deposit required to open most accounts, consider having at least a small amount ready to fund your account shortly after opening. This allows you to start exploring the platform and making your first investments.
Step 4: Understanding Ongoing Costs and Fees
While opening an account might be free, it's crucial to be aware of potential ongoing costs and fees associated with investing and using the platform.
A. Trading Commissions:
Stocks and ETFs: E*TRADE charges $0 commission for online U.S.-listed stock and ETF trades. This is a huge benefit for most investors.
Options: Options trades have a base commission of $0 plus a per-contract fee, typically $0.65 per contract. This drops to $0.50 per contract if you make 30 or more trades per quarter.
Mutual Funds: Over 4,000 no-load, no-transaction-fee (NTF) mutual funds are available for $0 commission. Other mutual funds may have transaction fees (up to $74.95 per purchase).
OTC Stocks: Over-the-Counter (OTC) stocks cost $6.95 per trade, which can be reduced to $4.95 if you make at least 30 stock, ETF, or options trades per quarter.
Bonds: Bonds typically cost $1.00 per bond ($10 minimum, $250 maximum) for online secondary market trades.
Futures: Futures contracts cost $1.50 per contract, per side, plus fees.
B. Account Maintenance Fees:
Generally, E*TRADE charges no annual account maintenance fees or inactivity fees for brokerage and most retirement accounts.
As mentioned, the Max-Rate Checking account has a $15 monthly fee that can be waived by maintaining an average monthly balance of at least $5,000.
C. Other Potential Fees:
Broker-Assisted Trades: If you place a trade with the help of a live broker, a $25 service charge may apply in addition to any commission.
Margin Interest: If you trade on margin (borrowing money from E*TRADE to invest), you will pay interest on the borrowed amount. Rates vary based on your balance.
Wire Transfer Fees: $25 for outgoing domestic wire transfers (as noted above).
ACAT Transfer Out Fees: $25 for partial transfers out, $75 for full transfers out.
Early Account Closure Fee: E*TRADE does not charge an early account closure fee.
Step 5: Start Investing and Growing Your Wealth
Once your account is open and funded, you're ready to begin your investment journey! E*TRADE offers robust platforms for both beginners and experienced traders, along with a wealth of educational resources.
For Beginners: Explore their educational materials, research tools, and consider commission-free ETFs or no-transaction-fee mutual funds to start building a diversified portfolio.
For Active Traders: Utilize their advanced trading platforms, charting tools, and research capabilities to execute more complex strategies.
Remember: Investing involves risk, and you could lose money. It's always wise to start with an amount you're comfortable with and gradually increase your investments as you gain experience and confidence.
Frequently Asked Questions
Here are 10 common questions about opening an E*TRADE account, with quick answers:
How to open an E*TRADE account with no money?
You can open most E*TRADE brokerage and retirement accounts with a $0 minimum deposit. You will need to fund the account later to start investing.
How to transfer money to an E*TRADE account?
You can transfer money via Electronic Fund Transfer (ACH), wire transfer, check deposit (mobile or mail), or by transferring an existing account from another firm. You can also set up direct deposit.
How to qualify for E*TRADE bonuses or promotions?
E*TRADE occasionally offers promotions for new clients who open and fund an eligible account with a certain amount within a specified timeframe. These typically require a minimum deposit, often starting from $1,000 or more, and using a specific promo code. Check their website for current offers.
How to avoid E*TRADE account maintenance fees?
For most brokerage and retirement accounts, there are no annual maintenance fees. For the Max-Rate Checking account, you can waive the $15 monthly fee by maintaining an average monthly balance of at least $5,000.
How to invest with a small amount on E*TRADE?
Since there's generally no minimum to open an account, you can start investing with as little as the price of one share of a stock or ETF. Many ETFs and mutual funds are also commission-free. E*TRADE also offers fractional shares through dividend reinvestment plans (DRIPs) and their robo-advisor, Core Portfolios.
How to close an E*TRADE account?
There is no fee to close an ETRADE account. You would typically need to liquidate your holdings or transfer them to another institution before closing. Contact ETRADE customer service for specific instructions.
How to contact E*TRADE customer service?
You can contact E*TRADE customer service by phone at 1-800-387-2331. Their website also provides online chat and email support options.
How to day trade on E*TRADE?
Day trading on ETRADE is possible, but it requires a minimum of $25,000 in your account to avoid Pattern Day Trader (PDT) rules, which restrict the number of day trades you can make. ETRADE provides resources to understand day trading requirements.
How to open an E*TRADE IRA account?
You can open an E*TRADE IRA account (Traditional, Roth, Rollover, etc.) online. The process is similar to opening a brokerage account, requiring personal and financial information. There's generally no minimum deposit to open an IRA.
How to get started with investing on E*TRADE?
After opening and funding your account, E*TRADE provides various tools and resources. You can use their research reports, screeners for stocks and ETFs, and educational materials to find investments that align with your goals. For beginners, exploring commission-free ETFs and no-transaction-fee mutual funds is a good starting point.
