E*TRADE vs. Fidelity (2024)

E*TRADE and Fidelity are two of the biggest investment brokerages in the U.S., but their stories are quite different.

E*TRADE is a pioneer in online investing founded just over 40 years ago; it was purchased in 2020 by publicly traded Morgan Stanley at a cost of $11.9 billion. Fidelity is a privately owned company founded in 1946. Today, both E*TRADE and Fidelity are popular brokerage options for beginner and experienced investors alike.

To help you choose between E*TRADE and Fidelity, we’ve studied their similarities and differences, along with their pros and cons.

E*TRADE vs. Fidelity: Similarities

Investment Offerings

Both E*TRADE and Fidelity serve up an extensive menu of investment options.

E*TRADE’s investment choices include:

• Stocks
• Stock options
• Futures
• Exchange-traded funds (ETFs)
• Mutual funds
• Bonds
• CDs
• Traditional, Roth, rollover, beneficiary, SIMPLE and SEP IRAs, as well as IRAs for minors or people who are over 59½ years old
• Education savings accounts
• Solo 401(k) accounts
• Custodial accounts

Fidelity’s investment options include:

• Stocks
• Stock options
• Fractional shares
• ETFs
• Mutual funds
• Bonds
• Custom index investing
• CDs
• Fractional CDs
• International trading
• Precious metals
• Annuities
• College savings plans
• Health savings accounts
• Traditional, Roth, SIMPLE and SEP IRAs, rollover IRAs and IRAs for minors
• Solo 401(k) accounts
• Custodial accounts

Robo-Advisors

Robo-advisors are available at both E*TRADE and Fidelity, and both companies received solid ratings on our best robo advisor roundup.

E*TRADE’s version of a robo-advisor, an automated investment management program called Core Portfolios, requires making a minimum investment of $500 and paying an annual advisory fee of 0.30% (based on assets under management).

Fidelity’s robo-advisor, Fidelity Go, requires no minimum deposit but does require a minimum balance of $10 in order to invest. The company charges no advisory fee for Fidelity Go balances below $25,000. For balances of at least $25,000, Fidelity charges a 0.35% annual advisory fee (based on assets under management); this includes free one-on-one coaching calls.

Education and Research

E*TRADE and Fidelity boast significant resources for learning about investing.

E*TRADE lands among Forbes Advisor’s best brokers for beginners. It earns high marks for online courses, videos, articles and other learning tools that appeal to a range of investors. Furthermore, its comprehensive research materials are well-organized.

Forbes Advisor also awards high marks to Fidelity for its research and education offerings. Fidelity stands out thanks to its abundance of third-party research and its vast supply of screening tools, among other features.

Insurance

E*TRADE and Fidelity offer similar protections for customers’ assets.

At E*TRADE and Fidelity, all brokerage accounts are insured by the Securities Investor Protection Corp. SIPC will cover up to $500,000 in investments, including up to $250,000 in cash.

Meanwhile, the Federal Deposit Insurance Corp. protects E*TRADE’s CDs at up to $250,000 per depositor. At Fidelity, the FDIC insures CDs, cash management accounts, health savings accounts and certain IRAs. Generally, that coverage is up to $250,000 per account.

E*TRADE vs. Fidelity: Differences

Investment Offerings

Although both companies provide an array of investment choices, there are several noteworthy differences:

• Fidelity does not allow futures trading, while E*TRADE does.
• Fidelity has a broader selection of offerings.
• Fidelity permits trading in precious metals, but E*TRADE does not.
• E*TRADE does not provide trading of fractional stock shares, though Fidelity does.

Cryptocurrency Trading

Fidelity enables direct trading in cryptocurrency, but E*TRADE does not.

Access to Investment Professionals

E*TRADE offers free access to financial consultants and trading specialists.

Access to Fidelity’s investment advisors might be harder to come by. For instance, over-the-phone access to advisors is available only to customers who’ve invested at least $50,000. And you’ll pay an advisory fee of 0.50% to 1.50% for guidance from a wealth management advisor. If you use Fidelity’s robo-advisor service, you will have access to one-on-one financial coaching calls.

Fee Structure

E*TRADE and Fidelity don’t take the same approach to fees.

At E*TRADE, online trading is commission-free for U.S.-listed stocks, ETFs, mutual funds and options. However, if those trades are done through a broker, it’ll cost $25 each. Keep in mind that E*TRADE tacks on a 65-cent-per-contract charge for options and a $1.50-per-contract charge for futures.

Online trading of stocks and ETFs is commission-free at Fidelity. Online trading of options is also commission-free, except for a 65-cent-per-contract charge. If you place a stock, ETF or option trade through one of Fidelity’s brokers, it’ll cost $32.95. All trades of Fidelity mutual funds are commission-free, but many non-Fidelity mutual fund purchases slap investors with a $49.95 commission.

Proprietary Funds

Fidelity carries a wide range of proprietary index funds that are popular among long-term buy-and-hold investors. The Fidelity total stock market index funds, , money market funds, and ESG funds consistently rank high on our lists. You can hold any of these Fidelity funds in an E*TRADE account, but E*TRADE does not have any of their own.

Settlement Accounts

Both E*TRADE and Fidelity allow the money in your settlement account to earn interest whenever it’s not invested. Fidelity’s accounts earn significantly more interest on regular deposits and slightly more interest than E*TRADE’s in money market funds.

E*TRADE’s interest rates for its bank deposits vary from 0.01% to 0.15% depending on your account balance. There is an option for your account to be invested in two different money market funds:

• MGPXX, which had a 7-day effective yield of 5.02% as of August 2, 2023
• DWGXX, which had a 7-day effective yield of 5.12% as of Aug. 2, 2023

Fidelity’s interest rates for its bank deposits were 2.72% APY as of July 31, 2023. Fidelity’s settlement accounts have the option to be invested in three different money market funds:

• SPAXX, which had a 7-day effective yield of 5.03% as of August 2, 2023
• SPRXX, which had a 7-day effective yield of 5.13% as of August 2, 2023
• FTEXX, which had a 7-day effective yield of 3.46% as of August 2, 2023

Total Client Assets

Fidelity wields a considerable advantage when it comes to total customer assets.

Fidelity tallied $11.1 trillion in customer assets as of the first quarter of 2023. By comparison, Morgan Stanley held nearly $4.6 trillion in customer assets at that time, with nearly $1 billion maintained on behalf of DIY online investors—including those who use the E*TRADEplatform.

Branches

The size of Fidelity’s branch network far exceeds that of E*TRADE. Fidelity operates more than 200 branches, while E*TRADE customers can visit any of Morgan Stanley’s 60-plus branches.

Who Should Choose E*TRADE?

If you’re a DIY investor who’d like to avoid certain fees, E*TRADE might be a good pick.

E*TRADE offers investors a basic app and an advanced app. And if you need investment recommendations, E*TRADE provides free access to financial advisors. Plus, compared with Fidelity, E*TRADE tends to stick you with fewer trading fees.

However, E*TRADE comes up short in certain areas. For instance, it doesn’t allow direct cryptocurrency trading or fractional stock trading, and it operates only about 30 branches.

E*TRADE Pros

• High customer satisfaction rating among self-directed investors seeking guidance
• Access to more than 6,500 mutual funds
• Prebuilt ETF portfolios

E*TRADE Cons

• No direct cryptocurrency trading
• No fractional stock trades
• Only about 30 branches

Who Should Choose Fidelity?

Are you an online trader or beginner investor? If so, Fidelity might be worth looking into as a place to invest your money.

Fidelity enjoys accolades from Forbes Advisor as the best online broker. And if you need in-person help with investment matters, Fidelity operates more than 200 branches across the country. Perhaps most importantly, Fidelity’s menu of investment options is generally more robust than E*TRADE’s, although neither brokerage stumbles in this category.

Unfortunately, Fidelity dings customers with a number of fees for more niche investing. For instance, it charges a $32.95 commission for some broker-assisted trades, and it hits robo-advisor investors with an annual advisory fee of 0.35%. Both of these fees are higher than E*TRADE’s.

Fidelity Pros

• High customer satisfaction rating among self-directed investors seeking guidance
• Availability of fractional stock trades
• More than 200 branches

Fidelity Cons

• No futures trading
• $32.95 commission for some broker-assisted trades
• Transaction fees for trades of non-Fidelity mutual funds