Investing and trading can feel like navigating a maze, especially when it comes to understanding fees. ETRADE, a popular online brokerage, has a diverse fee structure depending on what and how you trade. This comprehensive guide will break down the costs involved with trading on ETRADE, helping you make informed decisions about your investments.
Unveiling the Costs: How Much Are Trades on E*TRADE?
So, you're ready to dive into the world of investing with ETRADE? Fantastic! Before you make your first move, let's get crystal clear on the costs involved. Understanding ETRADE's fee structure is paramount to maximizing your returns and avoiding unexpected surprises. While E*TRADE has made significant strides in offering commission-free trading on many popular assets, there are still various charges that can apply depending on the type of security, your trading volume, and how you execute your trades.
Let's break it down step-by-step.
Step 1: Understanding the Foundation – Commission-Free Trades
This is where E*TRADE shines for many everyday investors.
Stocks: Great news! E*TRADE offers $0 commission on online trades for U.S.-listed stocks. This means you can buy and sell shares of companies listed on major U.S. exchanges without paying a per-trade commission. This applies whether you're making your very first trade or your thousandth.
Exchange-Traded Funds (ETFs): Similar to U.S.-listed stocks, online trades for ETFs also come with a $0 commission. This makes ETFs an attractive, low-cost option for diversification on E*TRADE.
Mutual Funds: E*TRADE offers a vast selection of no-load, no-transaction-fee (NTF) mutual funds, which means you won't pay a commission when you buy or sell them. However, be aware that transaction-fee mutual funds do incur a fee, typically around $19.99 per trade. Also, watch out for potential early redemption fees (around $49.99) if you sell a no-load, no-transaction-fee mutual fund within a short period (often 90 days) to discourage short-term trading.
Why is this important? These commission-free offerings are a major draw for both new and experienced investors looking to minimize their trading costs on core assets.
Step 2: Navigating Options Trading Fees
Options can be a powerful tool, but their fee structure is a bit more nuanced.
Standard Options Contracts: The standard fee for options contracts on E*TRADE is $0.65 per contract.
Active Trader Discount: If you're a more active options trader, executing 30 or more stock, ETF, and options trades per quarter, your per-contract fee drops to $0.50 per contract. This is a significant saving for frequent traders.
Regulatory and Exchange Fees: It's crucial to remember that in addition to E*TRADE's commission, you may also be subject to options regulatory fees and exchange fees. These are small, per-contract fees passed on by regulatory bodies and exchanges, and they are typically very minor but can add up on large orders.
Pro Tip: If you plan on trading options frequently, aiming for the 30+ trades per quarter can lead to considerable savings over time.
Step 3: Understanding Other Tradable Assets and Their Costs
While stocks, ETFs, and options are popular, E*TRADE offers a wider array of investment vehicles, each with its own fee structure.
Over-the-Counter (OTC) Stocks: These are stocks not listed on major exchanges (e.g., penny stocks, some international securities). Trading OTC stocks incurs a commission of $6.95 per trade. This fee is reduced to $4.95 per trade if you execute at least 30 stock, ETF, and options trades per quarter.
Why the higher fee? OTC markets often involve less liquidity and greater risk, and these fees reflect the additional handling involved.
Bonds:
Online Secondary Trades: For bonds traded on the secondary market online, there's a $1.00 fee per bond, with a minimum charge of $10 and a maximum of $250 per trade.
U.S. Treasury Auctions: Good news here! There is no charge for bonds purchased through U.S. Treasury auctions.
Futures: Futures contracts on E*TRADE generally cost $1.50 per contract, per side, plus additional fees.
Cryptocurrency Futures: For specific cryptocurrency futures contracts, the fee is $2.50 per contract, per side, plus fees.
Important Note: Futures trading involves significant risk and additional fees like exchange fees and National Futures Association (NFA) fees.
Broker-Assisted Trades: If you opt to place a trade through an E*TRADE broker over the phone, a service charge of $25 per trade applies. This fee is waived for extended hours and overnight session trades placed between 4 a.m. and 7 a.m. ET.
When to use a broker? Generally, only for complex orders or if you're unable to access the online platform. For most standard trades, the online platform is the most cost-effective option.
Foreign Stock Transactions: E*TRADE generally does not offer direct trading on international stock exchanges. If you wish to invest in foreign companies, you typically do so through ADRs (American Depositary Receipts) which trade like U.S. stocks and fall under the U.S.-listed stock fee structure, or through mutual funds/ETFs focused on international markets. Be aware that ADRs can have their own custody fees (often very small, per-share fees).
Cryptocurrencies: While ETRADE doesn't offer direct cryptocurrency trading, you can gain exposure through exchange-traded products (ETPs), exchange-traded funds (ETFs), and coin trusts that track or hold crypto assets. These generally follow the ETF or OTC stock fee structures. You can also trade cryptocurrency futures on the Power ETRADE platform, as mentioned above.
Step 4: Beyond Trading – Account-Related Fees
It's not just about what you trade; how you manage your account can also incur fees.
Account Minimums: E*TRADE has a $0 account minimum to open a brokerage account. This is a big plus for new investors.
Account Maintenance Fees: Another positive! E*TRADE generally does not charge annual account maintenance fees or inactivity fees for brokerage accounts. This means you won't be penalized for not trading frequently or for having a smaller balance.
Transfer Fees:
Outgoing Full Account Transfer (ACATS): If you decide to transfer your entire account out of E*TRADE to another brokerage, there's a $75 fee.
Outgoing Partial Account Transfer: A partial transfer out will cost you $25.
Wire Transfers:
Incoming Wire Transfers: No fee!
Outgoing Wire Transfers: There's a $25 fee for outgoing wire transfers. Note that for certain checking accounts (like Max-Rate Checking), this fee might be waived for online wire transfers.
IRA Premature Distributions: If you withdraw money from an IRA before age 59 1/2, a $25 fee may apply in addition to any potential tax penalties.
Mandatory Corporate Actions: E*TRADE may charge a $38 fee for mandatory corporate actions like mergers, reverse stock splits, or tender offers.
Voluntary Corporate Actions: For voluntary actions, the fee is also $38.
Returned Deposits/Insufficient Funds: A $25 fee typically applies for electronic transfers returned due to insufficient funds or for returned deposits.
Paper Statements/Check Copies: While electronic statements and check images are free online, requesting paper copies can incur fees (e.g., $5 per duplicate statement, $0 for check copies).
Managed Portfolios: If you opt for E*TRADE's professionally managed portfolios (like Core Portfolios or Dedicated Portfolios), you'll pay an advisory fee as a percentage of your assets under management. This fee varies based on the portfolio type and the amount invested. For example, Core Portfolios can have an annual advisory fee as low as 0.30% for balances over $500.
Step 5: The Less Obvious – Potential "Hidden" Costs
While E*TRADE is transparent about its fees, some costs are less obvious to a casual investor.
Payment for Order Flow (PFOF): Like many brokers, ETRADE receives payment for order flow. This means they are compensated by market makers for directing your orders to them for execution. While ETRADE states its PFOF is modest, it's a revenue stream for them and a point of discussion in the industry regarding potential conflicts of interest.
Margin Interest: If you engage in margin trading (borrowing money from ETRADE to invest), you'll pay interest on the borrowed funds. ETRADE's margin interest rates are variable and depend on the debit balance, starting higher for smaller balances (e.g., 13.20% for balances under $10,000, as of April 2025) and decreasing for larger balances.
Stock Loan Programs: E*TRADE may lend out fully paid shares from your account to short sellers. While you may be compensated with a portion of the revenue, it's something to be aware of if you participate.
FX Conversion Fees: If you're dealing with foreign currency for any reason (e.g., receiving dividends in a foreign currency), there might be a foreign currency disbursement fee, typically up to 3% on the exchange rate.
The takeaway? Always read the fine print in the fee schedule and prospectuses. While E*TRADE generally operates with transparent pricing, understanding all potential charges will empower you to manage your costs effectively.
Final Thoughts on E*TRADE Fees
E*TRADE's pricing structure is generally competitive, especially for common assets like U.S.-listed stocks and ETFs, where they offer commission-free trading. For active traders, the reduced options contract fees are a significant advantage. However, if you frequently trade OTC stocks, futures, or require broker assistance, these costs can add up.
By thoroughly understanding each potential fee, you can:
Choose the right investments: Prioritize commission-free options when suitable for your strategy.
Optimize your trading frequency: If you're on the cusp of a trading volume discount, it might influence your decisions.
Avoid unnecessary charges: Be mindful of broker-assisted trades, wire transfers, and early mutual fund redemptions.
Ultimately, E*TRADE provides a robust platform with a clear fee schedule. Your individual costs will largely depend on your investment choices and trading habits.
10 Related FAQ Questions
Here are 10 related FAQ questions with quick answers to help you further understand E*TRADE's fee structure:
How to Avoid Commission Fees on E*TRADE?
You can avoid commission fees on E*TRADE by primarily trading U.S.-listed stocks, ETFs, and no-load, no-transaction-fee mutual funds online, as these are typically $0 commission.
How to Reduce Options Trading Fees on E*TRADE?
To reduce options trading fees on E*TRADE, aim to execute at least 30 stock, ETF, and options trades per quarter, which will lower your per-contract fee from $0.65 to $0.50.
How to Find the Full List of E*TRADE Fees?
You can find the full and most up-to-date list of E*TRADE fees by visiting their official website's "Pricing and Rates" section or by searching for their "Commission and Fee Schedule" in their help center.
How to Know if a Mutual Fund Has a Transaction Fee on E*TRADE?
E*TRADE clearly designates mutual funds as "no-load, no-transaction-fee" (NTF) or "transaction-fee" funds within their platform. Always check the fund's details or prospectus before investing.
How to Avoid Broker-Assisted Trade Fees on E*TRADE?
To avoid the $25 broker-assisted trade fee, always place your trades online through the E*TRADE website or mobile apps, unless absolutely necessary.
How to Transfer Funds to E*TRADE Without Fees?
You can typically transfer funds to E*TRADE without fees through electronic funds transfers (ACH) from your bank account. Incoming wire transfers also have no fee.
How to Close an E*TRADE Account Without Fees?
E*TRADE does not charge a fee to close an account. However, if you transfer your assets out to another brokerage, you will incur an outgoing account transfer fee ($75 for a full transfer, $25 for partial).
How to Understand Margin Interest Rates on E*TRADE?
Margin interest rates on E*TRADE are variable and depend on the amount of borrowed funds (your debit balance); generally, the larger the balance, the lower the interest rate, but rates start high for small balances. You can find their current margin rates on their "Pricing and Rates" page.
How to Access Trading Platforms on E*TRADE for Free?
Both ETRADE's standard web platform and the more advanced Power ETRADE platform are available for free to all E*TRADE customers, with no minimum balance or trade activity requirements.
How to Avoid Early Redemption Fees on Mutual Funds on E*TRADE?
To avoid early redemption fees (typically $49.99) on no-load, no-transaction-fee mutual funds, ensure you hold the fund for the minimum required period, which is usually 90 days, before selling.
