E*Trade vs Fidelity: The Challenge
Which brokerage firm should you choose, Fidelity Investments or E*Trade? While E*Trade has futures contracts,
Fidelity has global trading. The differences just begin there. Keep reading for more details.
Costs
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Etrade
|
$0
|
$0
|
$0.65 per contract
|
$0
|
$0
|
|
Fidelity
|
$0
|
$49.95
|
$0.65 per contract
|
$0
|
$0
|
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
$0.65 per contract
|
$0
|
$0
|
Services
E*Trade and Fidelity Are Even for Available Investments
E*Trade offers both self-directed and managed accounts. The latter are available in robo or human form. The cheapest option is the automated version, which costs 0.30% per year.
Self-directed E*Trade accounts can trade:
- Mutual funds
- Exchange-traded funds
- Closed-end funds
- Fixed income
- Option contracts
- Stocks
- Futures
Stocks include OTC equities, but no foreign securities.
Fidelity doesn’t have futures but does offer trading on 25 foreign exchanges (in taxable accounts only), using different currencies. Places include the UK, Japan, and Canada.
Fidelity also has two main types of managed accounts. Its robo service costs 0.35% per year, but the first $10k is free. Fidelity often uses its own zero-expense-ratio funds, whereas E*Trade’s robo program uses external funds that have expense ratios.
E*Trade Wins for Website Technology
We found Fidelity’s website user-friendly. Two quote bars in the top menu pull up security details. Profile pages have buy and sell buttons that lead to an order form with 8 order types and 5 time-in-force choices.
Charts on Fidelity’s site can be saved, printed, or exported and come with a tutorial video explaining chart tools such as:
- Technical studies
- Comparisons
- Company events
- Drawing tools
Although Fidelity’s site has plenty of content, it remains straightforward to navigate. One disadvantage is that Fidelity removed its pop-out trade ticket.
E*Trade doesn’t have a pop-out trade form, but it provides a browser-based platform, something Fidelity does not. E*Trade’s website and platform offer several benefits, including:
- Stronger charting than Fidelity’s
- An order ticket with 10 order types and 3 time-in-force settings
- Pro-level trades such as One-Triggers-OCO
- Demo trading mode
For Mobile Apps, It’s a Draw
Fidelity’s mobile app is impressive. It has:
- Extensive market news with thumbnails
- Charting with tools and horizontal view
- Check deposit via phone
- Built-in multi-leg option strategies
- A beta design with a simpler interface
- Live Bloomberg news
- AI chatbot
- Bill pay
E*Trade comes with two apps. Together, they have comparable features, such as video news, mobile check deposit, watchlists, and alerts. Power E*Trade, its trading app with futures, includes a simulated mode, which Fidelity lacks. However, E*Trade’s apps don’t offer AI or pre-set option spreads.
Fidelity Has a Slight Advantage in Desktop Trading Software
Active Trader Pro is Fidelity’s desktop program. It doesn’t require a certain trade frequency or account size. It includes live streaming news, versatile order forms, full-screen charting, and excellent option resources.
Active Trader Pro provides free Level 2 quotes and time & sales data, plus direct-access routing. A conditional order ticket adds more professional-type features.
E*Trade’s desktop platform, E*Trade Pro, also has advanced capabilities, like profit/loss graphs, live video news, in-depth charts, robust option tools, time & sales info, Level 2 data, direct routing, and more.
E*Trade’s platform does require a $1,000 account balance to gain access.
Fidelity Wins for Customer Service
Fidelity has multiple support options, including 24/7 phone help. Its website features both automated and human chat. The automated one is always available, and the live agent one operates during set hours.
Our Fidelity test account included an internal messaging system, which can send and receive files.
Fidelity also has a network of over a hundred locations in the continental United States.
E*Trade runs just 29 physical branches. Its website lacks an internal email function. Its robo chat is less robust than Fidelity’s, and it has no live agent chat.
On the upside, E*Trade has round-the-clock phone support plus an extensive FAQ section (Fidelity does as well).
It’s Debatable in the Realm of Margin Trading
E*Trade’s website includes a handy margin tool that Fidelity doesn’t. Look for it by clicking Accounts -> Portfolios -> Margin. Enter a ticker, and it shows that asset’s margin rules. Fidelity’s site doesn’t offer an equivalent.
E*Trade charges margin interest on this schedule:
|
Debit Balance
|
E*TRADE Margin Rates
|
|
$250,000 - $499,999.99
|
11.2%
|
|
$100,000 - $249,999.99
|
11.7%
|
|
$50,000 - $99,999.99
|
12.2%
|
|
$25,000 - $49,999.99
|
12.7%
|
|
$10,000 - $24,999.99
|
12.95%
|
|
$0 - $9,999.99
|
13.2%
|
Fidelity’s rates are lower:
|
Debit Balance
|
Fidelity Margin Rates
|
|
above $1,000,000
|
8.25%
|
|
$500,000 – $999,999
|
8.55%
|
|
$250,000 – $499,999
|
10.825%
|
|
$100,000 – $249,999
|
11.075%
|
|
$50,000 – $99,999
|
11.125%
|
|
$25,000 – $49,999
|
12.075%
|
|
$10,000 – $24,999
|
12.575%
|
|
$0 – $9,999
|
12.575%
|
Either broker can convert a cash account to margin status.
Fidelity Wins in Miscellaneous Services
Individual Retirement Accounts: Both firms have many IRA types, but E*Trade charges more fees.
DRIP Service: Both brokers provide free dividend reinvesting.
Extended Hours Trading: Both have pre-market and after-hours sessions. E*Trade’s day is 2 minutes longer and it offers overnight trading in a limited set of ETFs, which Fidelity doesn’t.
Banking Tools: Checking and debit cards are available at both. Fidelity reimburses ATM fees more generously and offers higher FDIC insurance ($1.25 million).
Initial Public Offerings: Both firms let you participate in IPOs.
Periodic Mutual Fund Investing: Also on tap at each broker, free of charge.
Fractional Shares: At both firms customers can buy partial shares of stocks and ETFs.
Finally, Our Recommendations
Mutual Fund Traders: Fidelity’s screener found 9,601 funds, while E*Trade’s found 7,030, but E*Trade’s screener is better. Fund profile pages are fairly similar. We’ll call it a tie.
Beginners: Fidelity. The educational resources are slightly more extensive, the customer service is better, and it has more branch offices. Its desktop platform also has a guest mode.
Retirement Savers: Both are pretty strong here, including old-school financial planning. Fidelity has annuities; E*Trade has a self-employed Roth 401(k). We’d lean toward Fidelity for its bigger presence in physical locations.
Small Accounts: Fidelity’s robo plan has no required deposit (it’s $500 at E*Trade). If you’re self-directed, either is fine, but Fidelity’s fractional-share program has lower trade amounts. Fidelity has fewer IRA fees.
ETF and Stock Trading: We pick Fidelity. But E*Trade’s browser-based Power system is quite good, too.
E*Trade vs Fidelity: Who is Better?
Both have unique pros and cons, but Fidelity appears to be the stronger option overall.
|