E*TRADE is a brokerage platform where you open an account, deposit money, and buy or sell stocks, bonds, mutual funds, and other investments through their website or mobile app

E*TRADE is owned by Morgan Stanley and operates as a brokerage firm — a middleman between you and the financial markets. You create an account, move money into it, and then use E*TRADE's platform to place buy and sell orders. The platform executes those orders on stock exchanges and holds your investments in your account until you decide to sell them.

The process is straightforward: you sign up, verify your identity, fund your account with a bank transfer, and then you can start trading. E*TRADE makes money through commissions on certain trades, margin interest if you borrow to invest, and fees for premium services. Most stock and ETF trades on E*TRADE carry no commission, but options trades and some other products do charge per-contract fees.

Key Takeaways

  • You must open an account, pass identity verification, and link a bank account or transfer funds before you can place any trades.
  • E*TRADE charges no commission on stocks and ETFs but does charge per-contract fees on options trades and fees on certain mutual funds and advisory services.
  • Your money sits in your E*TRADE account until you invest it; cash balances earn interest through E*TRADE's sweep program, which moves uninvested cash into a money market fund.
  • You can set up automatic deposits, use limit orders to control the price at which you buy or sell, and monitor your portfolio through the E*TRADE website or app.
  • E*TRADE offers research tools, stock screeners, and educational content, but does not provide personalized investment recommendations unless you pay for their advisory service.

Opening an Account and Verifying Your Identity

To open an E*TRADE account, you visit etrade.com or use the E*TRADE mobile app and select "Open an Account." E*TRADE will ask for your Social Security number, date of birth, address, employment status, and annual income. This information is required by federal law — brokerages must verify your identity and assess your financial situation before allowing you to trade.

E*TRADE uses a process called identity verification, which typically happens when ready online. The company checks your information against databases maintained by credit bureaus and other sources. If verification is when ready, you can fund your account and begin trading the same day. If E*TRADE cannot verify you when ready, they will ask you to upload a government-issued ID or provide additional documentation, which can add one to three business days.

E*TRADE offers several account types: individual accounts (in your name only), joint accounts (shared with another person), IRAs (retirement accounts with tax advantages), and trust accounts. Each type has different rules about who can trade, how contributions are taxed, and when you can withdraw money. You choose the account type during signup based on your situation.

Funding Your Account and How Cash Is Held

After your account is open, you must deposit money before you can buy investments. E*TRADE accepts transfers from a bank account you own. You link your bank account by providing your routing number and account number, or by using your bank's online portal to initiate the transfer directly to E*TRADE. Bank transfers typically take one to three business days to arrive.

Once money lands in your E*TRADE account, it sits as cash unless you invest it. E*TRADE automatically enrolls new accounts in their sweep program, which moves uninvested cash into a money market fund that earns interest. The interest rate varies based on market conditions and the specific fund E*TRADE uses. You can turn off the sweep if you prefer to hold cash without earning interest, though this is uncommon.

If you sell an investment, the proceeds return to your account as cash. You can then use that cash to buy something else, withdraw it back to your bank account, or leave it in the sweep program. Withdrawals to your bank account typically take one to three business days.

Placing Buy and Sell Orders

Once you have cash in your account, you can place an order to buy a stock, ETF, bond, or other investment. On the E*TRADE website or app, you search for the investment by its ticker symbol (for example, AAPL for Apple), enter the number of shares you want to buy, and choose your order type.

A market order buys or sells when ready at the current market price. If you place a market order to buy 10 shares of a stock trading at $50, you will pay approximately $500 (plus any applicable fees), though the exact price may shift slightly by the time your order executes. A limit order lets you set a maximum price you are willing to pay (for a buy) or a minimum price you are willing to accept (for a sell). If the stock never reaches that price, your order does not execute.

After you submit an order, E*TRADE sends it to the exchange where that stock trades. Execution usually happens within seconds during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays). Once executed, the shares appear in your account and the cash is deducted. You can see your order history and current positions in the "Portfolio" or "Accounts" section of the E*TRADE platform.

Understanding E*TRADE Fees and Commissions

E*TRADE charges no commission on stocks and ETFs — you can buy or sell as many shares as you want without paying a per-trade fee. However, other products carry fees. Options trades cost $0.65 per contract. Some mutual funds charge a transaction fee if you buy them through E*TRADE (though many do not). Bonds may have a markup built into the price.

If you borrow money to invest — a practice called margin — E*TRADE charges interest on the borrowed amount. The interest rate depends on how much you borrow and current market rates, typically ranging from 6% to 12% annually. You can view your margin interest rate in your account settings.

E*TRADE also charges inactivity fees in some cases. If you have an IRA with no activity for 12 months, E*TRADE charges $40 per year. This fee is waived if you have a linked E*TRADE brokerage account or if your IRA balance exceeds certain thresholds. Advisory services, such as E*TRADE's managed portfolio service, carry separate fees based on your account balance.

Using Research Tools and Making Decisions

E*TRADE provides stock screeners, charts, earnings calendars, and research reports at no extra cost. You can filter stocks by criteria like market cap, dividend yield, or price-to-earnings ratio to narrow down what to research. The platform also displays news, analyst ratings, and financial statements for any publicly traded company.

However, E*TRADE does not tell you which stocks to buy or sell unless you pay for their advisory service. The research tools are informational — they help you analyze investments yourself, but they do not make recommendations. If you want a financial advisor to manage your portfolio or suggest specific trades, E*TRADE offers a managed account service that charges a fee based on your account balance, typically 0.30% to 0.50% annually.

E*TRADE also offers educational content: webinars, tutorials, and articles about investing basics, tax strategy, and market trends. These resources are free and available to all account holders.

Monitoring Your Portfolio and Tax Documents

Your E*TRADE account dashboard shows your current holdings, their current value, how much you have gained or lost on each position, and your total account balance. You can customize the view to see only certain accounts or investment types. The app and website update in real time during market hours.

E*TRADE generates tax documents automatically. At the end of each year, you receive a Form 1099-B (which reports your sales and gains) and a Form 1099-INT (which reports interest earned). If you hold dividend-paying stocks, you also receive a Form 1099-DIV. These documents are available in your account by January 31 and are sent to the IRS automatically. You use these forms to file your tax return.

You can also set up alerts in E*TRADE to notify you when a stock price reaches a certain level, when a company reports earnings, or when other events occur. These alerts help you stay informed without checking your account constantly.

Frequently Asked Questions

Can I trade before my bank transfer arrives?

No. You must have cash in your E*TRADE account before you can buy investments. Bank transfers take one to three business days, so you cannot trade until that money has arrived and cleared. Some brokerages offer margin accounts that let you trade on borrowed money, but E*TRADE requires you to have cash or settled funds first.

What happens if I sell a stock — where does the money go?

The proceeds land in your account as cash, usually within one to two business days after the sale. That cash is then automatically enrolled in E*TRADE's sweep program, which invests it in a money market fund earning interest. You can use the cash to buy another investment, withdraw it to your bank account, or leave it there.

Does E*TRADE tell me which stocks to buy?

E*TRADE provides research tools and information, but does not recommend specific stocks unless you pay for their advisory service. The platform shows you screeners, charts, news, and analyst opinions — you use those to make your own decisions. If you want personalized recommendations, you would need to enroll in E*TRADE's managed account service.

What is a limit order and when would I use one?

A limit order lets you set the price at which you are willing to buy or sell. If you want to buy a stock but think $50 is too high, you can place a limit order to buy at $45. The order only executes if the stock drops to $45 or lower. Limit orders are useful when you want to control your entry or exit price, though they may not execute if the stock never reaches your target price.

How much does E*TRADE cost to use?

There is no monthly fee to maintain an E*TRADE account. Stock and ETF trades are commission-free. You only pay fees if you trade options ($0.65 per contract), borrow on margin (interest charges), hold certain mutual funds (transaction fees vary), or use premium services like portfolio management. An IRA account charges $40 per year if inactive, though this fee is waived under certain conditions.