How Much Does E*TRADE Charge Per Transaction? A Comprehensive Guide to Fees and Costs (Updated for 2025)
Hey there, aspiring investor! Are you looking to dive into the exciting world of online trading and considering E*TRADE as your brokerage platform? That's a fantastic first step! One of the most common and crucial questions that pops up for anyone starting out (or even seasoned traders looking for a new home) is: "How much will this actually cost me?"
Understanding brokerage fees can feel like navigating a maze, with different charges for various asset classes, account types, and even how you place your trades. But don't you worry! In this lengthy and detailed guide, we're going to break down exactly what E*TRADE charges per transaction and for other services, giving you the clarity you need to make informed decisions. We'll cover everything from commission-free trades to less obvious fees, so you can confidently manage your investments. Let's get started!
Step 1: Understanding the "Zero Commission" Era – Where E*TRADE Shines
First things first, let's address the big headline: ETRADE, like many leading online brokers, has embraced the "zero commission" model for a significant portion of its offerings.* This is a huge win for retail investors!
Sub-heading: What Does "$0 Commission" Truly Mean?
When E*TRADE states "$0 commission" for online trades, it primarily refers to:
US-listed Stocks: Buying and selling shares of companies listed on major US exchanges (like NYSE and NASDAQ) online.
Exchange-Traded Funds (ETFs): Trading a basket of securities that track an index, sector, commodity, or other assets, bought and sold like regular stocks.
Most Mutual Funds: ETRADE offers a vast selection of no-transaction-fee (NTF) mutual funds. This means you won't pay a commission to ETRADE for buying or selling these specific funds.
This is fantastic news for those primarily investing in these common asset classes, as it significantly reduces your trading costs.
Step 2: Deconstructing the Costs: Where Fees Still Apply
While the $0 commission for stocks and ETFs is a major highlight, it's crucial to understand that not all transactions or services are free. Let's dig into where you might still encounter charges.
Sub-heading: Options Trading Commissions
Options are a popular tool for many traders, and while they also benefit from a $0 online base commission at E*TRADE, there's a per-contract fee.
Standard Options Trades: E*TRADE generally charges $0.65 per contract for online options trades.
Discount for Active Traders: If you're an active options trader, making 30 or more stock, ETF, or options trades per quarter, the per-contract fee drops to $0.50. This incentive is designed to reward higher-volume trading.
Sub-heading: Futures Trading Costs
Futures contracts are a different beast entirely, and they come with their own fee structure.
Online Futures Trades: Expect to pay $1.50 per contract, per side, plus exchange and regulatory fees.
Cryptocurrency Futures: For cryptocurrency futures, the cost is slightly higher at $2.50 per contract, per side, plus exchange and regulatory fees.
Sub-heading: Over-The-Counter (OTC) Equities
Not all stocks are listed on major exchanges. Over-the-Counter (OTC) equities (often referred to as "penny stocks") trade differently and come with a commission.
Online OTC Equities: E*TRADE charges $6.95 per online trade for US Over-The-Counter (OTC) equities.
Discount for Active Traders: Similar to options, if you make 30+ trades per quarter, this fee drops to $4.95.
Sub-heading: Mutual Funds with Transaction Fees
While E*TRADE boasts a large selection of no-transaction-fee (NTF) mutual funds (around 6,000!), not all mutual funds are free to trade.
Transaction-Fee Mutual Funds: If you opt for a mutual fund outside of E*TRADE's NTF list, you will typically incur a transaction fee. While the exact amount can vary, it is often around $19.99 to $25 per trade. It's always wise to check if a specific mutual fund carries a transaction fee before investing.
Sub-heading: Bond Trading Fees
Bonds also have their own fee structure, which can vary based on the type of bond.
US Treasury Bonds: Generally, there is $0 commission for online trades of US Treasury bonds.
Other Bonds (e.g., Corporate Bonds, Municipal Bonds): For online secondary market trades of other bonds, E*TRADE typically charges $1.00 per bond, with a $10 minimum and a $250 maximum per transaction.
Step 3: Beyond Trading: Other Fees to Be Aware Of
Transaction fees are just one piece of the puzzle. There are other potential costs associated with your E*TRADE account that you should know about.
Sub-heading: Broker-Assisted Trades
Sometimes, you might need to place a trade over the phone with a live broker. This convenience comes at a cost.
Broker-Assisted Service Charge: For trades placed through a broker (e.g., stocks, ETFs, options, OTC equities), E*TRADE typically adds a $25 service charge in addition to any applicable per-contract or per-share commissions.
Automated Phone Trades: Using E*TRADE's automated phone system for trades may incur a $5 service charge.
Sub-heading: Account Maintenance and Transfer Fees
Generally, E*TRADE does not charge inactivity fees or annual account maintenance fees for its standard brokerage or IRA accounts. However, there are some exceptions and related fees:
Full Account Transfer Out: If you decide to transfer your entire account from E*TRADE to another brokerage, there is typically a $75 fee.
Partial Account Transfer Out: Fees for partial transfers out may also apply.
Wire Transfers (Outgoing): While online transfers between your E*TRADE accounts or linked external accounts are generally free, outgoing domestic wire transfers might incur a fee, usually around $25. International wire transfers can be higher.
Paper Statement Fees: Opting for paper statements instead of electronic ones can sometimes incur a small fee (e.g., $1 to $2 per statement). Go paperless to save!
IRA Fees: For self-directed IRA accounts, there are generally no annual IRA fees and no account minimums. However, standard transaction fees for the underlying investments (stocks, options, etc.) still apply. For managed IRA portfolios (like Core Portfolios), there will be an advisory fee (e.g., 0.30% annually).
Sub-heading: Margin Rates
If you trade on margin (borrowing money from ETRADE to invest), you'll pay interest on the borrowed amount. Margin rates are variable and tiered, meaning the more you borrow, the lower the interest rate might be. ETRADE's margin rates are typically competitive but vary based on the E*TRADE Base Rate and your debit balance. It's essential to understand these rates if you plan to use margin.
Sub-heading: Miscellaneous and Less Common Fees
Regulatory Fees: Small fees like SEC fees and FINRA TAF (Trading Activity Fee) are passed on to investors for sell orders. These are usually very minor, often fractions of a cent per share.
ADR (American Depository Receipt) Fees: If you trade American Depository Receipts (ADRs), which represent shares of foreign companies, you might encounter small pass-through fees from the issuing bank.
Short Stock Borrow Fees: If you short sell a stock that is difficult to borrow, you may incur fees for borrowing those shares.
Step 4: Tips for Minimizing Your E*TRADE Costs
Now that you know the landscape, here are some actionable tips to keep your investment costs down at E*TRADE:
Sub-heading: Leverage Commission-Free Offerings
Focus on US-listed stocks and ETFs: If these are your primary investment vehicles, you'll enjoy $0 commissions on most online trades.
Utilize No-Transaction-Fee (NTF) Mutual Funds: E*TRADE has thousands of NTF mutual funds. Stick to these to avoid transaction fees.
Avoid broker-assisted trades: Unless absolutely necessary, place your trades online or through the mobile app to avoid the $25 service charge.
Sub-heading: Optimize Options Trading
Consider your trading volume: If you trade options frequently, aim for that 30+ trade per quarter threshold to qualify for the lower $0.50 per contract fee.
Plan your options strategies: Be mindful of the number of contracts you're trading, as the per-contract fee can add up quickly for large orders.
Sub-heading: Stay Informed and Review Statements
Regularly check ETRADE's pricing page:* Fees can change, so it's always a good idea to periodically review their official pricing and rates page on their website.
Scrutinize your trade confirmations and statements: Always review these documents to ensure the fees charged align with your expectations and E*TRADE's published rates.
Go paperless: Opt for electronic statements and trade confirmations to avoid potential paper statement fees.
Step 5: Making an Informed Decision
Understanding E*TRADE's fee structure is a critical part of your investing journey. While they offer highly competitive pricing, especially with their $0 commission for stocks and ETFs, being aware of the nuances for other asset classes and services will help you manage your investment budget effectively.
Remember, the goal is to maximize your returns, and minimizing unnecessary fees is a significant part of that!
10 Related FAQ Questions
Here are 10 frequently asked questions about E*TRADE's charges, starting with "How to," along with their quick answers:
How to find E*TRADE's current fee schedule?
You can find E*TRADE's most up-to-date and detailed fee schedule by visiting the "Pricing & Rates" section on their official website (us.etrade.com).
How to avoid mutual fund transaction fees on E*TRADE?
To avoid mutual fund transaction fees, select mutual funds from E*TRADE's extensive list of "No-Transaction-Fee (NTF)" funds. You can filter for these funds within their mutual fund screener.
How to get a discount on options trades with E*TRADE?
You can get a discount on options trades by executing 30 or more stock, ETF, or options trades within a calendar quarter, which lowers the per-contract fee from $0.65 to $0.50.
How to avoid broker-assisted trade fees at E*TRADE?
Always place your trades online through the ETRADE website or using their mobile trading apps (ETRADE or Power E*TRADE) to avoid the $25 broker-assisted service charge.
How to avoid account maintenance fees with E*TRADE?
E*TRADE generally does not charge annual account maintenance fees for standard brokerage or IRA accounts, so there's usually nothing specific you need to do to avoid them.
How to minimize costs when transferring an account out of E*TRADE?
If you plan a full account transfer, be aware of the $75 fee. Some receiving brokerages might offer to reimburse this fee if you transfer a substantial amount of assets. Inquire with your new broker.
How to check for regulatory fees on my E*TRADE trades?
Regulatory fees (like SEC and FINRA TAF) are typically very small and appear on your trade confirmation statement for sell orders. They are usually automatically applied and cannot be avoided.
How to understand margin interest rates on E*TRADE?
E*TRADE's margin interest rates are tiered and based on the amount of money you borrow. You can find their current margin rate schedule on their "Pricing & Rates" page, which shows different rates for various debit balance tiers.
How to avoid paper statement fees from E*TRADE?
Opt for electronic delivery of your statements, trade confirmations, and other documents through your E*TRADE account settings to avoid any potential paper statement fees.
How to determine if an investment has hidden fees on E*TRADE?
While ETRADE is transparent, some investments, like certain mutual funds or ADRs, have internal fees (expense ratios, management fees) that are not charged by ETRADE directly but by the fund or issuing entity. Always review a fund's prospectus for these details.
