E*TRADE vs Betterment

(November 2024)

In This Article

Our Verdict

When comparing E*TRADE and Betterment, the latter emerges as the clear winner. The decision is based on the fact that Betterment:

  • Offers robust automated investing services, which is ideal if you’re seeking a hands-off approach to managing your investment.
  • Delivers personalized financial advice.
  • Provides straightforward and competitive pricing structure.
  • Gives you the option to choose between traditional portfolios and socially responsible investing.

While the above is true, E*TRADE, however, is a strong contender that helps you access a wide range of trading tools and resources. You might find the platform helpful if you’re an active trader who seeks broader investment options and advanced research tools. Mind you, E*TRADE can be overwhelming if you’re a novice investor due to its complex features.

Ultimately, your choice between the two trading platforms depends on your financial goals and preferences.

Why Choose E*TRADE

Who E*TRADE is Best For

Prioritize E*TRADE as your preferred trading platform if you:

  • Want access to a wide range of investment options, such as stocks, bonds, ETFs, mutual funds, and options, that will help you diversify your portfolio.
  • Seek learning resources that can help you—whether you’re a beginner or a seasoned investor—to enhance your trading knowledge.
  • Prefer a powerful trading platform with advanced research tools, real-time data, and customizable dashboards.
  • Want a trading platform that has been in the industry for a very long time, making it a trusted choice for your investment journey.
  • Love to protect your funds using robust security measures, such as two-factor authentication, and encryption.
  • Prefer a more hands-off approach to managing your funds using the “Managed Portfolios” features, where experts handle your investments based on your goals and risk tolerance.
  • Love trading on the go. You can leverage E*TRADE’s mobile app to enjoy the flexibility to manage your investments from anywhere, anytime.

Who E*TRADE isn’t Right For

Think about other trading platforms for your investment needs if you:

  • Are completely new to trading, and need a simple trading platform. Understand that the E*TRADE’s platform can be overwhelming with complex tools and features, especially if you’re just starting. |
  • Are keen on socially responsible investing. Be aware that E*TRADE doesn’t specialize in this area.
  • Want to cut down on various fees, such as trading and account fees.

Why Choose the Betterment

Who Betterment is Best For

Make Betterment your choice trading platform if you:

  • Want an intuitive user interface, allowing you to trade across different devices such as mobile phones, desktop, and tablets.
  • Desire excellent support and guidance through the platform’s licensed financial experts.
  • Want to manage your cash by taking advantage of offerings such as high-yield savings accounts, and checking accounts. You can also get rewards including competitive interest rates, and no ATM fee reimbursements.
  • Seek an affordable trading platform that comes with some of the lowest management fees ranging from 0.25% to 0.40%.
  • Want to plan your investment, in line with your financial needs.
  • Want to use the tax-loss harvesting tool to reduce your tax bill by offsetting gains with losses.
  • Are an advanced trader who desires to manage your portfolio using sophisticated algorithms. That way, you can rebalance and optimize your investments to automatically gain massive returns and reduce risks.

Who Betterment isn’t Right For

Source a different trading platform if you:

  • Trade actively. This means, you can leverage the platform’s automated and long-term approach to investment.
  • Desire to pay less fees on higher account tiers. Keep in mind that your fees can hike up to 0.40% when you opt for a premium account.
  • Need to speak to a human financial advisor without having to upgrade to a premium plan.

E*TRADE vs Betterment: The Main Difference

 

E*TRADE

Betterment

Ideal For

●       Trading on a wide range of investment options.

●       Planning for retirement.

●       A hands-off approach to trading.

●       Non-active traders.

●       Managed traders.

●       Traders seeking tax-loss harvesting.

 

Pricing

●       Pay zero commissions for trading Online US-listed stocks, ETFs, mutual funds, and options.

●       For 0.30% annual advisory fees and $500 minimum investment, you’ll receive an experienced financial advisor who manages and monitors your diverse portfolios.

●       Pay $0.65 per option contract for less than 30 trades and $0.50 if more than 30 trades quarterly.

●       For transferring accounts out of E*TRADE, you’ll pay $25 for partial transfer, and $75 for full transfers.

●       Pay $10 to send checks.

●       $1 bond transaction fee.

Learn more about E*TRADE’s pricing by visiting its official website at https://us.etrade.com/what-we-offer/pricing-and-rates.

 

Basic Service

Advisory Fee: 0.25% or $4/month.

Expert Guidance: Get 45-minute call with a Certified Financial Planner for $299, or 60-minute call for $399.

Premium Service: Best if you have at least $100,000 in your account.

Advisory Fee: 0.65%

Expense Ratios: 0.07% to 0.17%.

Crypto Portfolios: 1$ management fee on the total portfolio balance.

 

 

Account Integration

●       Banks

●       Zapier

●       Excel

●       Turbo Tax

●       Mint, and more.

●       Personal Capital

●       Plaid

●       Turbo Tax

●       Mint

●       Wealthfront, and more.

 

 

E*TRADE vs Betterment: Product Offerings

E*TRADE

E*TRADE offers a variety of products and services designed to help you meet your financial goals. Here’s a detailed look at E*TRADE’s product offerings:

  • Account Types: Brokerage, Retirement, Core Portfolios, Managed Portfolios, Small Business, and Bank.
  • Investment Choices: Stocks, options, mutual funds, ETFs, Futures, bonds and CDs, prebuilt portfolios, and IPO.
  • Margin trading.
  • Learning resources.
  • Market insights.

Betterment

With its diverse array of product offerings, Betterment can help you achieve your financial goals with the following provisions: 

  • Guided Crypto Investing
  • Betterment Checking and Betterment Cash Reserve
  • Tax Management Features
  • Broad Impact
  • Climate Impact
  • Innovative Technology
  • Goldman Sachs Smart Beta
  • BlackRock Target Income
  • Flexible Portfolio

E*TRADE vs Betterment: Standout Features

E*TRADE

E*TRADE has several standout features that make it a popular choice when considering a platform to choose from. Here’s a closer look at E*TRADE’s uniqueness:

  • Has a highly-rated mobile application that offers full functionality for trading and managing accounts.
  • Offers a wide range of investment products to help you diversify your portfolio.
  • Comes with an extensive collection of research tools and resources from trusted providers like Morningstar, Thompson Reuters, and Market Edge.
  • Offers automated, personalized investment management through its Core Portfolios product offering.
  • Has human advisors to guide your investment journey and help you make informed decisions.
  • Provides integration options with financial tools such as Mint, Quicken, and more.

Betterment

Betterment stand out from the competition due to the following:

  • Comes with a favorable management fee of 0.25% yearly.
  • provides cash management features along with competitive interest rates.
  • Helps you to personalize your investment to suit your financial goals and preferences. Helps you set and achieve your financial goals by personalizing your investments.
  • Assists you in planning for retirement through its wide collection of tools.
  • Simplifies your investment journey by offering automated portfolio management processes.

Pros and Cons of E*TRADE

  • Offers up to 3.00% APY5 on checking and now 4.25%6 on savings with Morgan Stanley Private Bank.
  • Offers a mobile app with advanced functionalities.
  • Comes with easy-to-use tools.
  • Has great customer support.
  • Offers zero commission trades on stocks, options, and ETFs.
  • Has no mutual funds commissions.
  • Makes no provision for trading fractional shares.
  • Offers low interest rate on uninvested cash.
  • Has a difficult-to-navigate website.

Pros and Cons of Betterment

  • Lets you manage crypto portfolios.
  • Requires no minimum balance to maintain an account.
  • Makes provision for trading fractional shares.
  • Costs very little to manage your portfolio.
  • Gives you several portfolio options.
  • Has tools that help you plan your finances.
  • Offers no direct indexing feature.
  • Has a potentially risky emergency fund portfolio.

E*TRADE vs Betterment: Customer Reviews

E*TRADE earns accolades for its wide range of trading options and great customer support reflected in its incredible 4.5 out of 5 stars on Bankrate. Among many reasons, including the provision of industry-best mobile app, E*TRADE has a positive rating of 4.5 out of 5 stars on Investopedia. On NerdWallet, customers also show appreciation of E*TRADE’s offerings with a 4.4 out of 5 star rating. However, platforms like Trustpilot, and Forbes do not think E*TRADE deserves the accolades it receives. On Trustpilot, E*TRADE has 1.2 out 5 star rating from 406 customers, while scoring 3.6 out of 5 stars on Forbes Advisor.

Betterment, on the other hand, has quite a number of A-class ratings across different platforms. On NerdWallet, Betterment scores 5.0 out of 5.0 star rating, and 5.0 out 5.0 stars on Bankrate. More so, you’ll discover that the platform has 4.8 out of 5 stars on Forbes Advisor, while scoring 4.7 out of 5.0 star rating on Investopedia. You can tell—from all indications—that Betterment wins in this section.

E*TRADE vs Betterment App Competitors

Interactive Brokers: When considering the best platform that aligns with your financial goals and preferences, include Interactive Brokers in your list. Here’s why: The platform offers low-cost trading which means you can earn more by saving more on price cuts. The platform offers a free trial where you can familiarize yourself with how things work there.

The platform also comes with advanced trading tools which can be suitable if you’re an experienced trader. That means, if you’re seeking a platform to start learning trading, Interactive Brokers might not be the right place for you. Also, you’ll love the platform if you are an active trader who seeks some of the advanced tools to trade with.

When choosing interactive brokers, keep in mind, some of their fees. First, you don’t have to pay commissions for trading stocks and ETFs. You also don’t need account minimums. You can earn interest rates up to USD 4.83%, and lower-than-the-industry margin rates of up to 49%.

Acorns: Suppose you’re not so familiar with trading and require a simple place to begin, Acorns is highly recommended. The platform helps you begin your investment journey the easy way through its simple, straightforward user interface. You can start investing from your day-to-day purchases. Say, you bought a burger at $5.76, Acorns rounds your money to the nearest dollar and invests it.

If you’re not so much of an active trader and desire a hands-off approach to trading, you can leverage Acorn’s robo-advisors to get machine-generated insights and grow your funds.

Prices for Acorns come in three tiers. The Acorns Bronze is priced at $3/month, Acorns Silver costs $6/month, and Acorns Gold is priced at $12/month. You’ll enjoy a month-free subscription when you opt for Acorns Gold.

Robinhood: Robinhood excels in the trading industry for its extensive collection of asset classes. This is a great platform for you to spread your investments and broaden your portfolio. Not quite long Robinhood included crypto trading in its offerings.

Like many trading platforms, Robinhood does not charge you a commission for trading stocks, ETFs, and options. You’ll also not pay a dime for opening or maintaining an account with Robinhood.

Unfortunately, you can’t completely escape from charges while using Robinhood. This is because you’re required to pay three regulatory charges including Financial Industry Regulatory Authority (FINRA), bank-related fees, and Options Clearing Corporation fees. Regularly check Robinhood’s website to see if there are any updates on fees.

Pro Tips

  • Do your research before taking any investment risk. Understand the platform’s financial health, market position, and possible future returns, to help you make informed trading decisions.
  • Cast your bread upon many waters. Diversify your portfolio by spreading your investments across multiple sectors and asset classes.
  • Set clear goals before you begin your investment journey. It helps you know the right assets to choose, and the best strategy to apply.
  • Don’t stay in the dark when it comes to trading and investing. Stay updated with the market news and trends. If possible, subscribe to financial newsletters, and watch the market news on television. This can help you make better decisions.
  • Understand how much risk you can bear. With a well-defined risk tolerance, you can choose investments that are appropriate for you, and minimize panic during market downturns.
  • Avoid trading based on emotions. Here’s the catch: Don’t trade when you’re excessively happy, or sad. Also, stick to your strategy and make decisions that are from a place of logical thinking.
  • Review your portfolio from time to time to make sure they’re still in sync with your investment goals. If there are lapses, you can make necessary adjustments.

Recap

E*TRADE and Betterment are both popular trading platforms you can choose from. However, as you have seen from this comparison, Betterment is the clear winner. With Betterment, you have access to automated investing services, especially if you prefer a hands-off approach to managing your portfolio. You’ll also love the fact that the platform has a straightforward and transparent pricing structure. Whether you’re a traditional or social trader, the platform makes provision to accommodate you.

E*TRADE is also a great option if you’re an active trader seeking advanced research tools. The platform offers a variety of trading tools and resources to help you go about your investment journey.

The choice you make between both platforms largely depends on your investment goals and preference. Keep in mind, also, that your trading experience, and your willingness to pay for certain features is important.

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