E*TRADE vs Fidelity: Which Brokerage Wins?
Quick Comparison
| Feature | E*TRADE | Fidelity |
|---|---|---|
| Commission (Stocks/ETFs) | $0 | $0 |
| Options | $0 + $0.65/contract | $0 + $0.65/contract |
| Mutual Fund Minimums | Varies by fund | $0 for Fidelity funds |
| Index Fund Expense Ratios | Offers third-party low-cost funds | 0.00% (FZROX, FZILX — zero expense ratio) |
| Fractional Shares | No | Yes (as low as $1) |
| Trading Platform | Power E*TRADE (web + app) | Active Trader Pro (desktop) |
| Research | Good — third-party reports | Excellent — 20+ research providers |
| Retirement Tools | Strong — retirement calculators, managed portfolios | Excellent — planning tools, HSA, 529 |
| Banking | Yes (Morgan Stanley integration) | Yes (Fidelity Cash Management) |
| Customer Service | Good — phone, chat, branches (Morgan Stanley) | Excellent — phone, chat, 200+ Investor Centers |
Investment Options
Fidelity’s zero-expense-ratio index funds (FZROX, FZILX) are unmatched — you literally pay nothing in fund fees. No other brokerage offers this. On top of that, Fidelity provides fractional shares starting at $1, a massive selection of no-transaction-fee mutual funds, and access to ETFs from every major provider.
E*TRADE offers a solid fund lineup and access to Morgan Stanley research since the 2020 acquisition. However, it lacks fractional shares and doesn’t have proprietary zero-fee funds. For passive investors building a core portfolio, Fidelity has a clear cost advantage.
Trading Platforms
Power E*TRADE is excellent for options traders. The options chain interface, risk analysis tools, and strategy builder are best-in-class for a mainstream broker. The web-based platform is also well-designed — no download required.
Fidelity’s Active Trader Pro is a capable desktop platform with real-time data, advanced charting, and customizable layouts. However, it’s desktop-only (no web version) and hasn’t seen as many updates as Power E*TRADE. For everyday investors, Fidelity’s standard web interface and mobile app are more than sufficient.
Retirement and Long-Term Investing
Both brokerages excel at retirement accounts. Fidelity offers Traditional and Roth IRAs, 401(k) plans for businesses, HSAs, and 529 college savings plans — all with no account fees. Fidelity’s retirement planning tools and calculators are among the best in the industry.
E*TRADE offers similar retirement account types and has strong managed portfolio options (Core Portfolios) starting at a 0.30% annual fee. The Morgan Stanley integration adds access to wealth management services for higher-net-worth clients.
Key Takeaways
- Both offer $0 commissions on stocks and ETFs with identical options pricing.
- Fidelity wins on fund costs (zero-expense-ratio funds), fractional shares, and research depth.
- E*TRADE has a superior options trading platform (Power E*TRADE).
- Fidelity’s customer service and Investor Centers give it an edge in support.
- E*TRADE benefits from Morgan Stanley’s research and wealth management ecosystem.
Frequently Asked Questions
Is E*TRADE the same as Morgan Stanley?
Morgan Stanley acquired E*TRADE in 2020. E*TRADE continues to operate as a separate brand for self-directed investors, but the integration means E*TRADE clients can access Morgan Stanley research, advisors, and banking services.
Does Fidelity really have zero-fee funds?
Yes. Fidelity’s ZERO index funds (FZROX for total US market, FZILX for international) have a 0.00% expense ratio. There’s no catch — they make money elsewhere in the business. These funds are exclusive to Fidelity accounts.
Which is better for options trading?
E*TRADE’s Power E*TRADE platform is generally considered better for options — the strategy builder, risk/reward visualizations, and options chain layout are more intuitive. Fidelity’s options tools are capable but not as polished for complex strategies.
Can I have accounts at both?
Absolutely. Many investors keep a Fidelity account for long-term investing and retirement (leveraging zero-fee funds) and an E*TRADE account for active options trading. There’s no rule against using multiple brokerages.
Which has better customer service?
Fidelity consistently ranks at the top of customer satisfaction surveys. With 200+ Investor Centers nationwide, 24/7 phone support, and a well-regarded mobile app, Fidelity’s support infrastructure is hard to beat. E*TRADE’s service is good but not quite at Fidelity’s level.