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No more excuses. It’s time to open your first IRA account. We walk you through the entire process, including where to open your account. It’s easy!

First IRA Account

Establishing your first IRA, or Independent Retirement Account, is a big deal in the world of finance. This tax-advantaged account is a great way to save and invest for the future. It generally earns more than you would in a high-yield savings account (thanks to compound interest!). And it allows your money to grow tax-free for decades. Aside from a 401(k)–if you have one–it’s the biggest first step you can make toward saving, and planning for a successful retirement.

Planning for retirement is imperative, too, if you don’t want to work for the rest of your life. No matter how much you make now or how much you’ll need in the future, set aside what you can, when you can. Believe me: your future self will thank you!

So, how do you go about deciding on and opening your first IRA? More importantly, how can you start saving in this retirement vehicle with a limited initial contribution?

Let’s talk about the first steps toward opening an IRA. Then we’ll discuss the best ways to fund one if you only have, say, $1,000 to contribute.

Who Can Open One?

First, know that not everyone is eligible to contribute to an IRA. So, who is eligible to establish and contribute to one? If you are younger than 70 ½ and have earned, reported income of any kind, you’re good to go.

The rules for an IRA are simple: you’re can contribute up to the maximum of either the annual contribution limit or your earned income for the year, whichever is lower. The annual contribution limit can change from year to year. For 2018 it’s $5,500 in or $6,500 if you’re over 50.

This means that if you earned $100,000 this year, you can still only contribute up to $5,500 (or $6,500) to your IRA. Conversely, if you only earned $2,500 this year, that is all you can contribute. Even if you have savings elsewhere or your parents want to give you a little extra cash, you can’t put more in the account than you earned in income.

Decide Which Type Is Right for You

There are two types of IRAs to choose from: traditional and Roth. Both are tax-advantaged. This means they both offer tax benefits as they grow. But they work very differently.

Both IRA types have the same contribution limit. You can have both types of IRAs and contribute to both throughout the year. But if you split the money, the combined amount you contribute to both accounts still can’t exceed the applicable maximum.

A traditional IRA lets you see the tax benefits now. You contribute money to this account during the year tax-free. You can contribute pre-tax dollars through your employer. Or you can contribute post-tax income on your own, and then deduct the contributions when you file your taxes.

Your earnings in the traditional IRA will grow tax-free over the years. However, when you withdraw the funds in retirement, you will pay income taxes at whatever your normal rate is at that time.

A Roth IRA is a little different. You will contribute to this fund with after-tax dollars throughout the year. So your employer won’t contribute from pre-tax dollars. And you can’t take a tax write-off for your contribution. Every penny you contribute has already been taxed.

Again, your earnings will grow tax-free over the years. However, when you withdraw funds, you won’t pay any income taxes. None, nada, zip. You’ll be able to withdraw dollar for dollar in retirement (after age 59 ½), without Uncle Sam taking another cut.

So, which one should you choose?

Well, first off, you don’t have to choose. You can certainly open both types, or even open one now to begin contributing and then open the other type later on. However, if you’re asking which would be the better choice for you, here’s the general rule:

  • If you think you’re making more money now than you will in retirement, go with the traditional IRA. Taking the tax break now, while you’re in a higher income bracket, is smarter and results in more savings.
  • If you think you’ll make more in retirement than you’re making now, go with the Roth IRA. A tax cut now, in the form of annual deductions, doesn’t do you much good if you’ll pay higher taxes on distributions when retirement comes.

Decide when you’re most likely to be in a higher tax bracket, and take the tax benefits then. You can also change this later down the line, if your career shifts and you wind up making substantially more or less than you do now.

Where to Open It

So, you’ve picked an IRA type and set aside some cash. Now, where is the best place to open your account and invest the money? After all, an IRA isn’t simply a savings account, meant to sit around earning a couple percent in interest. It’s a retirement account that you want to grow.

You have a few options available. Almost all major financial institutions offer IRAs. You can open one through a bank or a credit union of which you’re a member. You could turn to mutual fund companies or investment accounts for a more traditional option. Or you can even look into using your IRA to invest with a peer-to-peer lending site, such as Lending Club or Prosper.

You have many, many investment options–more so than with 401(k) investments, in fact. Which you choose is determined by your risk level, your ability to manage the account, and whether you have any specific investment goals.

You can invest your IRA with a robo advisor like Betterment or Wealthfront. These low-cost options can help you decide on a portfolio. They’ll even re-balance your portfolio over time to keep meeting your investing needs.

You could look into utilizing a broker, such as Ally Invest or OptionsHouse. If you want to invest in ETFs (exchange-traded funds) or individual stocks, this is the way to go. This is a great option if you want to pick and choose where your money gets invested.

Mutual fund companies, such as Fidelity, Vanguard, or Charles Schwab are some other preferred places to invest. Each company offers plenty of its own mutual funds to choose from, so you can pick the one that best suits you.

Within the “mutual fund” umbrella, you have a number of options for where your money actually goes. You can pick a target-date retirement fund, which is a fund based on your expected year of retirement. The company will rebalance your portfolio and asset allocation as you go, according to an established timeline. Essentially, the company starts you off in higher-risk, higher-reward investment options when you’re young. As you near retirement, they’ll move your money into safer bonds.

Lifestyle funds are similar, in that they automatically rebalance your portfolio as you go. However, with these, you choose your asset allocation from the get-go, and it doesn’t change over time.

You can also utilize financial advisor services to manage your investments. Each of the mutual fund companies mentioned here offers these services. This is a bit more costly of an option, but can be a great choice if you want to have more control over your money.

Which of these options really depends on your personal preferences and how much money you have to invest. Many companies have initial investment minimums of $0 to $500. But some have minimums of $2,000+. Be sure to check out the details and our reviews before you settle on a company for your first IRA.

Opening and funding an IRA is a great first start toward saving for retirement. It provides more of a return on your savings than a basic savings account would, and also offers tax advantages that help you keep a little more of what’s yours.

By wisely contributing and investing your IRA, you’ll not only grow your money but also save for a successful retirement future. And believe me, you’ll be glad you did.



A robo advisor can make it easy to invest in an IRA or taxable account. But how do you choose? Here’s our 2018 list of the best robo advisors for your money.

best robo advisors

This is something of a controversial topic. There are any number of “best robo-advisors” lists, and they all look a little bit different. That’s because all reviews are subjective. Which robo-advisors get top grades largely depends on the investment preferences of the reviewer.

This list review will be based primarily on four criteria:

  • Investment management fees
  • Investment mix
  • Additional services, where available
  • Platforms likely to appeal to largest number of investors (as opposed to niche robos)

With that in mind, here is our list of the five best robo-advisors. By the way, the list isn’t in any specific order. Any of the five are worth considering.


Betterment is the largest independent robo-advisor, and for all the right reasons. This platform has it all, and is often the first to add new services.

Betterment makes use of goals based investing. You can set up specific goals, like retirement, an emergency fund, or saving for a college education–and attach an account to that goal.

Betterment is tailor-made for new and small investors. There is no minimum initial investment required, you can fund your account with monthly deposits. They charge a single low annual management fee of 0.25%. This means that you can have a $10,000 account managed for just $25, or a $100,000 account managed for just $250.

They offer their Tax-Coordinated Portfolio that favors income generating assets, like bonds, into retirement accounts, and capital gains generating assets into taxable accounts. The also offer tax-loss harvesting (TLH), which is an investment strategy that sells losing positions to generate capital losses (to offset capital gains elsewhere), repurchasing similar assets later to retain the desired portfolio allocation.

On the asset allocation side, they offer socially responsible ETF’s, as well as those that invest in stocks and bonds.

Betterment offers a Premium portfolio for investors with a minimum of $100,000. It adds certain services, but increases the management fee to 0.40%.

SoFi Wealth Management

SoFi Wealth Management is a relative newcomer to the robo-advisor space, having begun operations in the spring of 2017. But like everything else connected with SoFi, it’s one of the most innovative robo-advisor platforms available.

It has a fee structure comparable to both Betterment and Wealthfront, with an annual advisory fee of 0.25%. And like Wealthfront, the first $10,000 in your account is managed for free. But SoFi adds a twist. If you have a SoFi loan, the advisory fee is waived. That gives you a professionally managed investment account for free.

Like other robo-advisors, SoFi constructs your portfolio with index-based ETF’s. But SoFi adds real estate and high-yield bonds to the usual robo mix of stocks and bonds. In addition, SoFi Wealth Management requires just $500 to start an account. And if you don’t have $500, you can open an account with zero, and begin funding it with contributions of at least $100 per month.

The only negative with this platform is that they don’t offer tax-loss harvesting. That isn’t an issue with tax-sheltered retirement accounts, or with smaller balance accounts. But it will be an issue for larger taxable accounts.

Of course, one of the big advantages with SoFi Wealth Management is that it gives you the ability to take advantage of SoFi’s other award-winning services. SoFi has moved beyond providing student loan refinances. They now offer mortgages, personal loans, and even life insurance. It’s fast becoming a one-stop shop for financial services of all kinds.

M1 Finance

M1 Finance is something of a hybrid between robo-advisors and traditional investment brokers. Their program offering is unique, but one that can be easily understood by most investors.

M1 Finance provides investment portfolio templates, known as “Pies”. Each is based on Modern Portfolio Theory (MPT), which is common to robo-advisors. But no questionnaire is used to determine your risk tolerance.

You can invest in a Pie as is, or you can customize it anyway you want. This is extremely unusual among robo-advisors, who typically maintain tight control over a very limited number of ETF’s.

Within an individual Pie, you can add both individual stocks and ETF’s. As to the ETFs used by the platform, they select from more than 2,000 ETFs. Most other platforms have a group of about a dozen ETF’s that are included in virtually all portfolios.

The inclusion of your own investment selections gives you an opportunity to outperform the market, rather than to simply match it the way most robo-advisor do.

Pies are available for general investing, retirement, income, responsible investing, hedge fund strategies, specific industries and sectors, or other strategies.

M1 Finance does not have a minimum investment requirement, and there are no fees to manage your account. On the downside, the platform does not offer tax-loss harvesting.


Wealthfront is Betterment’s biggest competitor among independent robo-advisors. And they’re an innovative force unto themselves.

Wealthfront has rolled out a number of specialized robo-advisor accounts, including their Direct Indexing series. These plans are designed for larger investors, offering specialized plans for portfolios of at least $100,000, $500,000, or $1 million. Portfolios include not only ETFs, but also between 100 and 1,000 individual stocks. That makes this unusual among robo-advisor platforms, who usually hold only ETFs.

Like Betterment, Wealthfront also provides tax-loss harvesting, as well as allocation of specific asset classes into taxable and tax-sheltered plans. But Wealthfront outshines Betterment in investment diversification. Wealthfront adds both real estate and natural resources to your asset mix.

Wealthfront’s fee structure is hard to beat. The first $10,000 is managed for free, and after that the balance is managed for just 0.25% per year. They have a $500 minimum initial investment requirement, but that’s low enough to accommodate most investors.


Just as the name implies, Hedgeable follows the basic investment strategy of hedge funds. On the one hand, Hedgeable is a robo-advisor for more sophisticated investors. But on the other, the platform makes sophisticated investment management available to small investors.

Hedgeable uses an investment strategy that protects your portfolio from catastrophic losses. This is referred to as “Downside Risk Protection”, and it is typically available only to very large investors. As such, Hedgeable has recently been outperforming other robo-advisors. It also uses unique investment assets. Those can include private equity, real estate, commodities, and even Bitcoin.

Unlike other robo-advisors, Hedgeable isn’t a passive, buy-and-hold platform. The asset mix will be adjusted based on market conditions.

The good news is that you need only $1 to open an account. You can even “test drive” the platform before investing any money. But Hedgeable is high on the fee side–mainly because it is an actively managed portfolio. The fee is 0.75% on balances up to $49,000. There is a sliding scale that drops to 0.30% on portfolios of $1 million or more.

This is an excellent robo-advisor if you would like non-traditional investing, with not alot of money.

So there are our choices for the five best robo-advisors. Have you used any of these platforms? Would you recommend them to others?


Ally Invest Review

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Ally Invest offers is a low cost and very easy to use online broker. Formerly TradeKing, we cover all of its features and costs in this review.

ally invest

You’ve probably heard about Ally Bank. They’re perhaps the best-known online bank, offering some of the highest interest rates available on savings accounts and certificates of deposit. As of last year, Ally Bank has an investment branch–Ally Invest. And like the Bank, Ally Invest is one of the better investment platforms now available.

About Ally Invest

Ally Invest came about in 2016 when Ally Bank acquired TradeKing. TradeKing was a well-known brokerage firm in its own right, offering some of the lowest trading commissions available anywhere. It was a perfect investment platform for self-directed investors, who trade frequently, and looked for the lowest trading commissions possible. TradeKing fills that niche and filled it well.

Ally Bank took all that TradeKing had to offer and only made it better. The platform offers stocks, bonds, fixed income securities, options, exchange-traded funds (EFTs), and more than 12,000 mutual funds, both load and no-load funds. They also offer Ally Invest Managed Portfolios robo-advisor, and for more sophisticated investors, Ally Invest Forex & Futures.

Ally Bank has over $71 billion in customer deposits and more than 7,500 employees. Ally Invest now has over 250,000 customer accounts, with a total of $4.7 billion in assets under management. The two divisions are each owned by Ally Financial, Inc. which was founded in 1919, and is currently headquartered in Charlotte, North Carolina.

Ally Invest Basic Features and Benefits 

Available Accounts. You can hold individual and joint investment accounts, as well as traditional, Roth, rollover, SIMPLE and SEP IRAs. They also offer trust, custodial and Coverdell accounts.

Minimum Opening Account Balance. If you’re opening a self-directed account, there is no minimum required initial deposit. The minimum for the Managed Portfolio is $2,500, and for the Forex & Future account, it’s $250.

Customer Service. Representatives are available by phone, email or online chat, 24 hours a day, seven days per week.

Account Protection. Your account is protected by SIPC for up to $500,000 in cash and securities, including up to $250,000 in cash. There is additional coverage available for up to $37.5 million, although the Forex & Futures accounts are not covered by this insurance.

Mobile App. The app is available for Apple iOS and Google Android. It is offered for both Ally Bank Mobile Banking and Ally Invest.

Investing Tools. Ally Invest equips you with streaming charts, market data, market, and company snapshots, watch lists, a profit and loss calculator, a probability calculator, and options chains that enable you to easily place options trades.

Ally Invest Managed Portfolios

Managed Portfolios are Ally Invest’s robo-advisor service. It is designed for investors who are not comfortable with self-directed investing. The service provides professionally designed portfolios that are personalized to fit your risk tolerance, time horizon, and investment goals.

Like virtually all other robo-advisors, Ally Invest Managed Portfolios build your portfolio using low-cost index ETFs. These keep investment fees very low while providing your portfolio with exposure to entire markets and sectors.

Managed Portfolios includes automatic rebalancing, and enable you to adjust your risk tolerance, which allows the portfolio allocations to be changed.

Managed Portfolios are available for individual and joint taxable accounts, as well as custodial accounts, and IRAs. Each account requires a minimum initial investment of $2,500 and is subject to an annual management fee of 0.30% of the account balance.

Ally Invest Forex & Futures

For more experienced investors, Ally Invest offers its Forex & Futures platform. There you can trade more than 50 currency pairs, including gold and silver. Since Forex and futures investing is more technically involved in other investment types, the platform offers a full range of trading tools, research material, and educational guides.

Trading on the platform can be done in real time. They also offer customer service for Forex & Futures on a “24/5 basis” – that’s 24 hours a day, five days per week. They are available from 10:00 AM on Sundays, through 5:00 PM on Fridays, Eastern Time.

The trading platform is fully customizable and offers trading in metals, indices, bonds, and agriculturals. It also has charting capabilities that are based on over 100 technical indicators. You also get real-time alerts in a tradable Market Depth Ladder.

You can open a Forex and Futures account with as little as $250, but Ally Invest recommends that you have at least $2,500 in the account before you start trading. There is no fee associated with trading on this platform. Ally Invest is compensated by the buy/sell spread.

Forex & Futures Features and Tools

Practice Account. If you’re not an experienced Forex trader, Ally Invest offers a $50,000 practice account that enables you to access all of the features of the Forex & Futures platform for 30 days. There you can develop your skills as a trader, before committing your own real money.

ForexTrader. This feature provides real-time information, maximum flexibility, and robust tools for Windows users. It offers an intuitive user interface with advanced customization features, as well as professional trading tools. You can:

  • Customize your trading environment
  • Spot trends and plan for your next trade
  • Automate your trading strategies
  • Browse actionable research and trade ideas
  • Access your account anytime, anywhere with the Mobile App

ForexTraderWeb. This platform is available for Mac (but also for Windows) and is a fully integrated charting tool that provides you with advanced trading with easy access to position and account information. It provides real-time quotes and instantaneous updates on your open positions, and other information.

It also displays a variety of single and contingent order types, including If/Then, If/Then OCO and Trailing Stops.

Mobile Solutions. The mobile app provides robust training capabilities, real-time news and commentary, charting tools, and the ability to get alerts and manage your account. And you can do it all while you’re on the go.

The platform also offers a large variety of educational resources that will help the Forex and futures trader learn everything from the basics of trading to technical and fundamental analysis. It also provides you a glossary of terms, to familiarize yourself with those that are necessary for the trade. Ally Invest offers plenty of resources for both the novice trader and the veteran who’s looking to sharpen his or her skills.


Ally Invest Pricing

There are three basic ways to invest through Ally Invest, and each has its own pricing structure.

Self-directed Investing

Ally Invest’s Self-directed investment fees are as follows:

  • Stocks and ETFs, $4.95 per trade
  • Options, $4.95 per trade, plus an additional $0.65 per contract
  • Mutual funds, load funds: no fee on either purchase or sale
  • Mutual funds, no load funds: $9.95 on both purchase and sale

Special Volume/Balance Pricing. If your account has an average daily balance of at least $100,000, and/or you have more than 30 trades per quarter, Ally Invest offers reduced pricing. Trades on stocks and ETF’s are just $3.95, and then $3.95, plus $0.50 per contract, for options trades.

Ally Invest has no annual fee, inactivity fee, and even no IRA fee.

Managed Portfolios

Ally Invest Managed Portfolios has an annual management fee of 0.30% on all balances. This means that you will pay a fee of just $150 per year on a $50,000 portfolio managed by the service.

Forex & Futures

There is no commission involved with Forex trades, as Ally Invest earns their fees on the buy/sell spread.

Ally Invest Pros and Cons

Ally Invest Pros

Low trading fees. The basic trading commission of $4.95 per trade is one of the lowest in the industry. The reduced fee of $3.95 per trade on high balance accounts or high-frequency traders is one of the very best fee structures is available.

24/7 Customer service. Most investment platforms limit customer service contact either to regular business hours, or extended hours. Ally Invest is always available.

Self-Directed or Managed Portfolios. This combination gives you a choice, to either manage your own investments, or to have them professionally managed. You don’t have to make a choice, you can have part of your portfolio managed while being self-directed in the rest.

Ally Bank. The bank has some of the highest interest rates paid on savings instruments, as well as the availability of mortgages, a credit card, and their innovative auto financing portfolio.

Ally Invest Cons

We could come up with only one, and it’s not a big one…

Managed Portfolios fee is a bit high. The annual fee of 0.30% isn’t excessive across the robo-advisor spectrum, but it is higher than more popular platforms, such as Betterment and Wealthfront, who each charge 0.25%. In addition, Wealthfront manages the first $10,000 for free.

Should You Invest with Ally Invest?

Very low trading fees, a managed portfolio option, a robust Forex and futures platform, and the availability of all of the benefits of Ally Bank make Ally Invest a tough combination to beat anywhere. This can be a perfect investment platform for the self-directed investor, who may want to trade in options and Forex and futures, but also wants to add a managed option as well as high-yielding safe investments to the portfolio mix.

What’s more, Ally has very low minimum investment requirements, for the self-directed platform, Managed Portfolios, and their various bank investments. In that way, it’s also the perfect platform for the passive investor who might want to combine managed investments with high-yield savings, and maybe dabble in some self-directed investing along the way.

If you’d like more information, or you’d like to sign up for the service, visit the Ally Invest website. This is truly one of the best overall investment platforms available.

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E*TRADE set the bar as one of the first online discount brokers. But is it the broker you should be using? We help you answer that question in our E*TRADE review.

ETrade Review

It’s curious that the editorial team here at Consumerism Commentary has never reviewed E*TRADE before today. I say that because we have written about how to close an E*TRADE account. E*TRADE is also one of the largest and most innovative investment brokerage firms available, making this review long overdue.


Founded in 1982, it was one of the first companies to offer online trading. It’s one of the very best investing platforms for active traders, but it also offers managed investment options for investors who don’t want to manage their own portfolios.

E*TRADE has more than 3.5 million individual brokerage accounts, and more than $49 billion under management. In August 2017, E*TRADE acquired OptionsHouse, which is one of the top options investment platforms available. This makes the E*TRADE platform even more beneficial for active traders.

E*TRADE Review Summary

After reviewing dozens of investment platforms over the years, E*TRADE comes up as one of the better ones. What I like about E*TRADE is that many brokerage firms specialize in self-directed investing, others in managed portfolios and robo-advisors. E*TRADE offers both.

And the My Virtual Advisor tool can provide you with a portfolio allocation for your self-directed investing, using the same methodology as robo-advisors.

Where I find that E*TRADE falls a little short is that it has a definite orientation toward the high-volume trader. For example, E*TRADE Pro is one of the most intuitive trading software programs around, and would be particularly beneficial for new and small investors. But it’s only available for active traders.

The same is true of their reduced pricing, at $4.95 per trade. It’s also available only to very active traders. By contrast, Ally Invest also offers discounted commissions for high-frequency traders, but $4.95 per trade is standard for all investors.

Compare: See how E*TRADE stacks up to other online brokers

E*TRADE Features and Benefits

Available Accounts. E*TRADE offers individual and joint taxable brokerage accounts, trusts, estates, conservatorships, custodial accounts and Coverdell education savings accounts. They also offer a futures trading account, as well as a Forex trading account. Accounts can also be opened under business corporate LLC accounts.

Retirement accounts include traditional, Roth and rollover IRAs, beneficiary IRAs, IRAs for minors, and SEP and SIMPLE IRAs. They also offer small business retirement accounts and 401(k) rollover accounts

Investments Offered

E*TRADE is available to invest in stocks, bonds, mutual funds, exchange traded funds (ETFs), target date funds, options and futures, and fixed income securities. The firm offers more than 9,000 mutual funds, including 4,400 no-load funds with no transaction fees.

Minimum Initial Investment

You need a minimum initial deposit of $500 to open up a trading account. However, there are no minimums required for either retirement accounts or custodial accounts.

Calculators and Tools

E*TRADE has one of the most extensive trading platforms in the industry. Some of what they offer includes:

  • E*TRADE 360–This is the firm’s do everything platform for traders and investors. It offers streaming real-time quotes, customizable planning tools, and access to free independent research. That includes research from TipRanks, Credit Suisse, Thompson Reuters, and more.
  • E*TRADE Pro–This is E*TRADE’s main platform for active traders. It includes enhanced speed, insight and performance, including its Enhanced Options Analyzer to evaluate positions and strategies. Use a point-and-click order entry system, which enables you to trade more quickly and easily. You can use it to trade stocks and ETF’s, in addition to options.
  • Stock and Fund Screeners–Use this tool to cull thousands of funds and stocks to find the investments that you’re looking for. There are individual screeners for stocks, mutual funds, ETF’s bonds, and bond funds.
  • My Virtual Advisor–This is a tool that will recommend an asset allocation for you. It will evaluate your risk tolerance, financial goals and investment time horizon, and then make recommendations in a matter of minutes.

E*TRADE also offers the E*TRADE Community, which is a social media outlet where you can swap investment strategies, and discuss specific investments. It includes discussion boards for personal exchanges, and even gives you the ability to monitor community sentiment.

OptionsHouse Platform Access

This past summer E*TRADE and OptionsHouse began enabling investors to access their OptionsHouse trading platform from their E*TRADE accounts. This is a significant upgrade, since OptionsHouse offers one of the most advanced options trading platforms in the industry. The OptionsHouse platform provides Integrated Trading, Advanced Charting, Trading Ladders and Options Chains.

Mobile App

The E*TRADE mobile app provides the same information and tools that are available on the web app. That includes accessing the personalized retirement center. The app is available on iPhone, Android, tablets and Apple Watch, and can be downloaded at Google App and the App Store.

Local Branches

The company has 30 branch offices available in and around major cities.

Customer Service

Available 24 hours a day, seven days per week, by phone, email and online live chat. E*TRADE has investment advisors available at all times to help you with your investment decisions.

Account Protection

E*TRADE provides SIPC insurance on all accounts, with coverage up to $500,000, including up to $250,000 in cash. There is additional coverage through a London insurer for up to $150 million. Both types of coverage protect against broker failure, and not against losses due to market factors.

E*TRADE Managed Accounts and E*TRADE Adaptive Portfolios

If you’re not comfortable with self-directed investing, E*TRADE offers several options to have your account managed for you.

First is the Unified Managed Account. This is an actively managed portfolio, that invests in stocks, mutual funds and ETF’s. It’s for larger investors, requiring a minimum investment of $150,000. The annual fee for the service is not more than 1.25% of the value of your portfolio.

E*TRADE also offers E*TRADE Capital Management, to actively manage your portfolio. This is similar to investment management services provided by other traditional investment managers. For that reason, and because your account will be actively managed, the fees for the service range between 0.65% and 0.90%, depending on size of your portfolio. The minimum investment for the service is $25,000.

Finally there’s E*TRADE Adaptive Portfolios. This is E*TRADE’s robo-advisor service. It provides a fully automated investment account for the person who wants hands-off investment management. The account is managed through E*TRADE Capital Management, who both creates and manages your portfolio, including periodic rebalancing.

Adaptive Portfolios actually involves two distinct portfolios. The first is comprised entirely of ETF’s. This makes it a completely passive portfolio, since the funds represent markets and market segments. The second is a hybrid portfolio, that includes both ETFs and mutual funds. The mutual funds add an actively managed component to the portfolio, in an attempt to provide higher returns than index funds alone.

E*TRADE Adaptive Portfolios requires a minimum initial investment of $5,000, and an annual management fee of 0.30%. It’s available for taxable individual and joint brokerage accounts, all types of IRAs, custodial accounts, and even traditional and Roth 401(k)’s.


E*TRADE’s bank was created specifically for its investment customers. It offers free checking with no minimum balance requirement, although there is an initial deposit requirement of $100.

The bank also offers an interest-bearing checking account, but requires a minimum monthly balance average of at least $5,000, otherwise there is a $15 per month service charge.

With either account, you also get a free Visa debit card, as well as unlimited checking. Your account can be accessed online or by mobile app. Transfers between accounts, including your brokerage account, are free. In addition, E*TRADE Bank offers unlimited ATM fee reimbursements.

The bank also offers mortgages. In addition, all accounts are protected by FDIC insurance, for up to $250,000 per depositor.

E*TRADE Pricing

E*TRADE offers the following pricing:

  • Stocks, options and ETF’s–$6.95 per trade; $4.95 per trade with 30 or more trades per quarter. E*TRADE also offers a number of commission-free ETF’s
  • Options–$0.75 per contract; $0.50 per contract with 30 or more trades per quarter
  • Futures–$1.50 per contract
  • Bonds–$1 per bond, subject to a $10 minimum and a $250 maximum
  • US Treasury securities–no fee
  • Mutual funds–$19.99 per trade, but more than 4,400 no-load, no transaction fee funds
  • Broker -assisted trades–$25 per trade

There are no annual or monthly account fees for regular brokerage accounts.

E*TRADE Current promotions

E*TRADE is currently offering a cash credit starting at $200, and going as high as $2,500. The promotion works on a sliding scale, so the largest credits will go to the largest deposits or transfers. The scale looks like this:

You can get up to 500 free trade commissions for each stock or option trade completed within the first 60 days of the deposited funds being made available for investment in your new account. You will pay the trading fees as normally required, but the account will be credited within one week. Also, the transferred or deposited funds must come from a third-party source (bank, brokerage etc.), and not from another E*TRADE account.

SPECIAL OFFER–E*TRADE is currently offering a $600 bonus if you open up a new trading account with at least $10,000. This is specifically for non-retirement accounts, and the account must be opened no later than December 31, 2017.

How to Open an Account with E*TRADE

The entire sign-up process with E*TRADE takes place online. The application asks for general information, such as your name, address, occupation and income. You must have a valid Social Security number. You will also be requested to provide financial information, including liquid assets available, your net worth, and how much you expect to contribute to your account.

Once all of the general information has been entered, you will be asked to select the type of account that you want to open. That will also bring up a series of investment-related questions. E*TRADE tries to determine your level of experience, particularly in regard to more sophisticated trading, such as options and futures.

You will be asked specific questions, such as what types of investments you have previously held, and how much experience you have in managing them.

Once you have completed the application, you will create an account ID, and fund your account.


  • Excellent fee structure for active traders–$4.95 per trade is at the lower end of the industry fee structure.
  • 24/7 customer service, plus 30 local branches. Most investment brokerage firms only offer regular business hours, or extended trading hours. And few have any brick-and-mortar branches at all.
  • Top-of-the-line investment platform, that offers the kinds of tools needed by both novices and experienced investors.
  • 4,400 no-load, no transaction fee mutual funds.
  • The ability to maintain both a self-directed account for trading purposes, as well as managed options for those who lack the ability or desire to manage their own accounts.
  • The sign-up bonus ranging from $200 to $2,500–plus up to 500 free trades–is one of the most generous promotions in the industry.


  • The management fee of 0.30% on E*TRADE Adaptive Portfolios is at the middle range for robo-advisors, but higher than the 0.25% charged by popular robo-advisors like Betterment and Wealthfront.
  • Trading fees are only at the middle of the investment brokerage range if you are not an active trader.

Should You Sign Up With E*TRADE?

Due to the reduced trading commissions, E*TRADE will work best for very active traders (30 or more trades per quarter). The availability of investment options and platform tools is one of the very best in the industry. The E*TRADE Community also gives investors an opportunity to interact directly with other investors. This is a major benefit for both new investors and highly experienced ones.

But one of the biggest advantages with E*TRADE is the fact that it offers both a robust self-directed investment platform, as well as managed investment programs. This gives the user the ability to allocate his or her portfolio between self-directed and managed portions. An investor can decide to have some of their portfolio professionally managed, while keeping a portion for do-it-yourself investing.

Whatever type or level of investor you are, E*TRADE is an excellent choice. If you’re a new investor, you can start out using a managed option. But as your experience and your portfolio grow, you can seamlessly transition over to self-directed investing.

If you’d like more information, or if you’d like to sign up with the service, visit the E*TRADE website.

How to Manage Your E*TRADE Investments

Track and Analyze your Investments for Free: The easiest way to track and analyze all your investments, regardless of where they are located, is with Personal Capital’s free financial dashboard. By far the best financial tool we’ve ever used, Personal Capital enables you to connect all of your 401(k), 403(b), IRAs, and other investment accounts in one place. Once connected, you can see the performance of all of your investments and evaluate your asset allocation.

retirement fee analyzer

You can also see the fees you are paying through Personal Capital’s Retirement Fee Analyzer. I was stunned to learn that the fees in just my 401(k) could cost me over $200,000, requiring me to put off retirement for three years! They also offer a free Retirement Planner. This robust tool will help you plan for retirement and show you if you are on track to retire on your terms.

retirement planner

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