E*TRADE vs Fidelity: The Challenge
Which broker makes more sense for you, E*TRADE or Fidelity? Fidelity offers global stock trading,
while E*TRADE brings futures trading to the table. And that is only the start of the differences. Read on for the full comparison.
Costs
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
$0 + $0.65 per contract
|
$0
|
$0
|
|
E*TRADE
|
$0
|
$0
|
$0 + $0.65 per contract
|
$0
|
$0
|
|
Fidelity
|
$0
|
$49.95
|
$0 + $0.65 per contract
|
$0
|
$0
|
Services
E*TRADE and Fidelity Are Even for Available Investments
E*TRADE provides both self-directed accounts and managed portfolios. On the advisory side, investors can choose either a robo service or a human-advised setup. The lowest-cost option is the automated service, which currently charges 0.30% per year.
Self-directed E*TRADE accounts can trade a broad menu of investment products. These include:
- Mutual funds
- Exchange-traded funds
- Closed-end funds
- Fixed income
- Option contracts
- Stocks
- Futures
Stocks include over-the-counter stocks but don’t include foreign stocks.
Fidelity removes futures from that list, but in exchange it offers access to stocks in 25 countries inside taxable brokerage accounts, with trading available in multiple currencies. Markets include places such as the United Kingdom, Japan, and Canada.
Like E*TRADE, Fidelity also has managed accounts in two forms. Fidelity’s robo service is costlier than E*TRADE’s at 35 basis points, but there is no advisory fee on balances below $25,000. Fidelity also relies on Fidelity funds in the program, including zero-expense-ratio funds. E*TRADE uses non-E*TRADE funds that come with expense ratios.
E*TRADE Has the Edge for Website Technology
In our review, Fidelity’s website was straightforward to use. There are two quote fields in the top menu, and both deliver information on securities. Profiles include both buy and sell buttons that bring up a trade ticket with 8 trade types and 5 duration choices.
Charts on the Fidelity site can be saved for later use, printed, or exported as an image or spreadsheet. A graph has a link to a video that shows how to use the charting software, and there are lots of tools. These include:
- Technical studies
- Comparisons
- Company events
- Drawing tools
Taken as a whole, Fidelity’s website provides a lot of information without feeling too cluttered. One drawback is that the old pop-out ticket is gone, although Fidelity now does offer a browser-based Trader+ Web platform.
E*TRADE never did have a pop-out trade ticket, but it still delivers a browser platform that remains one of its big strengths. Together, the regular website and Power E*TRADE Web deliver some excellent tools, including:
- Advanced charting on a higher level than Fidelity’s software
- Order ticket with 10 trade types and 3 time-in-force options
- Professional-level trades like One-Triggers-OCO
- Simulated trading mode
For Mobile Apps, It’s a Draw
In addition to its strong website, Fidelity also has an excellent mobile app. Highlights include:
- Lots of market news with thumbnails
- Graphs with tools and horizontal capability
- Mobile check deposit
- Multi-leg option strategies pre-installed
- Beta version with simpler layout
- Live Bloomberg
- Help bot
- Check deposit
- Bill pay
E*TRADE has two apps. Between them, they provide some of the same resources Fidelity offers, including video news, mobile check deposit, watch lists, and alerts. Power E*TRADE, which is the firm’s trading app and includes futures capability, also has a demo mode, something Fidelity still does not offer on mobile. But E*TRADE’s apps have no AI. They also don’t have pre-installed option strategies.
Fidelity Has a Slight Advantage in Desktop Trading Software
Fidelity’s active-trading desktop setup now centers on Fidelity Trader+ Desktop, which was rebuilt from Active Trader Pro. There is no minimum trading requirement or account balance to use it. The software comes with a long list of valuable tools, such as live business news, advanced order tickets, full-screen charts, and strong options widgets.
Fidelity’s desktop software includes Level II quotes and time & sales data at no extra charge. Directed trading is another feature we like, and the conditional ticket adds an even more professional feel.
E*TRADE has its own downloadable system as well. Today it is called Power E*TRADE Pro, and it is another excellent trading platform. Many, though not all, of the capabilities inside Fidelity Trader+ Desktop can also be found in Power E*TRADE Pro. These include profit-loss diagrams, streaming financial video, advanced charts, sophisticated options tools, time & sales data, Level II quotes, direct-access routing, and much more.
The one weakness E*TRADE has in this category is a $1,000 account minimum to gain access to its desktop platform.
Fidelity Wins for Customer Service
Fidelity traders have access to a broad set of customer-support channels. The firm offers phone help 24 hours a day, 7 days a week. Its website also includes both an automated assistant and live chat with representatives. The virtual assistant runs around the clock, while live chat is available during more limited hours.
Inside our Fidelity test account, we also found an internal e-mail system that can both send and receive messages, including attachments.
Beyond strong online and phone support, Fidelity also has well over a hundred investor centers across the lower 48 states.
E*TRADE, by contrast, operates far fewer offices. Its site still doesn’t have an outgoing message system like Fidelity’s, and its automated help is not nearly as capable. Even so, E*TRADE does now offer live chat during weekday business hours, in addition to phone support.
On the plus side, E*TRADE does provide phone support around the clock, and its website has a large self-help area (as does Fidelity).
It’s Debatable in the Realm of Margin Trading
E*TRADE’s website includes a margin tool that Fidelity’s website lacks. It can be reached through these three clicks (Accounts -> Portfolios -> Margin). Entering a ticker symbol there generates the margin requirements for that specific security. Fidelity’s website has no equivalent tool.
E*TRADE customers pay margin interest according to the following scale:
|
Debit Balance
|
Margin Interest Rates
|
|
$250,000 - $499,999.99
|
10.45%
|
|
$100,000 - $249,999.99
|
10.95%
|
|
$50,000 - $99,999.99
|
11.45%
|
|
$25,000 - $49,999.99
|
11.95%
|
|
$10,000 - $24,999.99
|
12.2%
|
|
$0 - $9,999.99
|
12.45%
|
Fidelity has somewhat lower rates:
|
Debit Balance
|
Margin Interest Rates
|
|
above $1,000,000
|
7.5%
|
|
$500,000 – $999,999
|
7.8%
|
|
$250,000 – $499,999
|
10.075%
|
|
$100,000 – $249,999
|
10.325%
|
|
$50,000 – $99,999
|
10.375%
|
|
$25,000 – $49,999
|
11.325%
|
|
$10,000 – $24,999
|
11.825%
|
|
$0 – $9,999
|
11.825%
|
Cash accounts can easily be converted to margin accounts at both E*TRADE and Fidelity.
Fidelity Wins in Miscellaneous Services
Individual Retirement Accounts: Both firms in this comparison offer several IRA types. E*TRADE has more IRA fees.
DRIP Service: Both firms also provide dividend reinvestment at no charge.
Extended Hours Trading: Pre-market and after-hours trading are available at both firms. E*TRADE still has 2 more minutes total than Fidelity. In addition, E*TRADE offers overnight trading in a limited list of ETFs, a feature Fidelity still does not match.
Banking Tools: Checkwriting and debit cards are available at both firms. Fidelity has a stronger ATM-fee reimbursement setup and much higher potential FDIC coverage in its Cash Management Account, currently up to $4 million.
Initial Public Offerings: E*TRADE and Fidelity both provide access to upcoming stock offerings.
Periodic Mutual Fund Investing: Once again, both firms offer it. There is no charge to enroll at either broker.
Fractional Shares: Fidelity customers can buy partial shares of stocks and ETFs broadly. E*TRADE does not offer the same broad stock-and-ETF fractional-share program, although its automatic investing tools can create fractional ETF positions.
Finally, Our Recommendations
Mutual Fund Traders: Using Fidelity’s fund screener, we found 9,601 funds. With E*TRADE’s, we found 7,030. E*TRADE has the better screener, though. Fund profiles are about even. Take your pick.
Beginners: Fidelity is our choice. Its education library is somewhat deeper. It also has much stronger customer service and a much larger branch network. Its desktop platform also can be used in guest mode.
Retirement Savers: Both brokerage firms have solid resources here, including traditional financial planning. Only Fidelity offers annuities, while E*TRADE offers a self-employed Individual 401(k), including a Roth feature. We would still lean toward Fidelity because of its larger physical footprint.
Small Accounts: Fidelity’s robo accounts have no minimum (E*TRADE requires $500). For self-directed trading, either broker can work, although Fidelity’s broad fractional-share trading does create lower trade minimums. For IRAs, Fidelity’s no-fee structure is better for small accounts.
ETF and Stock Trading: We lean toward Fidelity, although E*TRADE’s Power E*TRADE Web platform is very good.
E*TRADE vs Fidelity: Who is Better?
Both companies bring meaningful strengths and weaknesses to the table, although Fidelity seems to have the overall advantage
in this comparison.
|