E*Trade Bank Review

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My first concrete memory of E*Trade was during a half-time commercial from a Super Bowl many years ago. The commercial was that of a monkey dancing for about twenty seconds followed by a single line flashed across the screen, “Well, we just wasted 2 million bucks. What are you doing with your money?”

Back then they were primarily a discount brokerage that offered extremely cheap trades compared to full service brokers. Since then, they’ve expanded into banking and now offer one of the most competitive interest rates available in a high yield savings account.

E*Trade Bank Account

The online interface is very quick and intuitive. It seems as though the experience they’ve had running a brokerage website has come in handy for the banking, as banking services are often simpler and quicker than brokerage services.

E*Trade offers online bill pay – a feature you don’t often see in savings accounts. I haven’t enrolled but I can’t imagine it works any differently than any other bill pay service. Online bill pay is a great way to reduce hassle in your life (and saves you on postage!) and I use it extensively through my regular checking account. If you could move all your bill payments to this savings account, you could maximize your interest earnings on those funds.

What’s nice about E*Trade, which puts them in the ease of use category of ING Direct, is that it’s a cinch to open up new accounts. While you don’t get the full versatility of ING Direct, where you can open up any number of savings accounts, it’s a lot easier to open up a CD or brokerage account than at a bank like HSBC Direct. What’s also nice, and standard amongst online banks, is that transfers between accounts is instantaneous (unless there is a bank holiday).

Another great feature of E*Trade is that you can link multiple online banks together electronically. Many other banks offer this but from time to time you’ll get one that will require you to send in paperwork and a voided check (Emigrant Direct and Dollar Savings Direct require this).

E*Trade Brokerage Account

One of the greatest features about E*Trade Bank is that it’s so easy to link up a E*Trade Brokerage account. The brokerage side of E*Trade is pretty good, having won several awards in the last few years. In 2008, they were named Smart Money’s best discount broker for the second year in a row and Top 10 by Barron’s online broker survey. More importantly, they didn’t score poorly in any of the categories listed.

You can buy bonds, mutual funds, stocks, options, basically anything you could want through the brokerage account. The only complaint I have is that E*Trade doesn’t give you real time quotes on the buy screen, it gives you delayed quotes. It’s 2008, I can’t imagine real time quotes are all that more considering you can get them for free anywhere. I’m not a hardcore trader, though I did day-trade AIG earlier this year, but I’m overall happy with E*Trade.

If you’re looking for only a brokerage account, I think you would do just as well with someone like TradeKing – cheaper trades ($4.95 vs. $9.99), just as many accolades (my TradeKing review). However, coupling the bank and the brokerage together makes E*Trade a solid choice if you’re looking for both.

That Super-Bowl Commercial

And, thanks to the power of the internet, you can watch that commercial on YouTube!

{ 3 comments, please add your thoughts now! }

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3 Responses to “E*Trade Bank Review”

  1. Just to let everyone know, E-Trade has the worst customer service in the brokerage business; horrible.

    I highly recommend that you stay far away from them.

  2. @ Money Hawk:
    Please provide details as to what makes their customer service so horrible. Simply saying so doesn’t provide any benefit or insight.

    I have a Complete Savings account, a taxable brokerage account, and Roth IRA at E*Trade, and with the exception of one incident have never had any problems with them. My one problem dealt with a rollover IRA that was supposed to come with 50 free trades, but my former company took over 3 months to send in my 401(k) money (which is legal since former employers are not required to disperse funds until the tax-year end of September 15th for such plans). Unfortunately, since the transfer took so long the free trades had expired, which I wasn’t too happy with. Aside from that I love all of the trading tools, research options, transfer times, etc. There are not many brokerages that allow access to S&P research, Jaywalk, Thomson, and Market Edge Second Opinion all for free. I even received an e-mail for a $99 Blackberry Bold with a new contract with AT&T which is $100 les than getting it direct. I have had accounts at Ameritrade (pre-merger) and Scottrade, and neither compare in any way to E*Trade in my opinion.

  3. Lori says:

    They don’t respond to e-mails, or phone calls. I keep getting directed to “leave a message” but the mailboxes are full. When I talk to a real person, they keep transferring me…usually back to an automated recording. They couldn’t find my account by my name, my account number or my social. They sure do cash my checks quickly but no acknowledgment of any other paperwork/forms. Worst service in history.

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