E*TRADE vs. Fidelity Investments

E*TRADE and Fidelity are full-service online brokers that have been around for decades. Founded in 1982, E*TRADE was one of the first U.S. brokers to offer online trading services. The firm positioned itself as one of the best online brokers for options trading after acquiring OptionsHouse in 2016 and integrating a quiver of OptionsHouse tools into the E*TRADE Power platform.

Fidelity was founded in 1946 and made its internet debut in 1995—about a decade after E*TRADE. The company offers a solid all-around package with low costs, excellent research amenities, and valuable tools. While these two brokers have a lot in common, we’ll compare the two to help you determine which one is the right fit for your investing needs.

Usability

New E*TRADE customers can easily open and fund an account using a mobile device or computer. There are two main web-based platforms with dedicated mobile apps that mirror the functionality of the respective web platforms. One platform is aimed more at casual traders, and the Power E*TRADE platform is designed for the more active crowd. 

Fidelity is quite user-friendly overall. Here again, the broker has addressed the challenge of having tools for active traders while accommodating casual investors by splitting its offerings into two platforms. Initial account opening with Fidelity is simple, especially if you’re adding an account to an existing household.

Overall, we found E*TRADE is a good choice for active traders and investors—especially those who want access to a suite of excellent options tools. At the same time, Fidelity is better for casual investors and traders looking for low costs and access to international trading. 

Trade Experience

Desktop Trade Experience

E*TRADE’s standard website can be challenging to navigate due to its two-level menus. However, the fully customizable Power E*TRADE platform is more intuitive, and you can access all your favorite tools in a single layout. You have access to streaming real-time quotes across all platforms, and you can stage orders and send a batch simultaneously. You can also place orders from a chart and track them visually.

Fidelity’s workflow for analyzing or trading existing positions on the website is relatively easy, although it’s a bit clunky sorting through the tabs and drop-down choices. Buy-and-hold investors should find the web-based platform more than adequate, but keep in mind that quotes are delayed by 15 minutes unless you sign up for real-time quotes. More experienced investors and traders will appreciate Active Trader Pro’s charts, technical indicators, screeners, and advanced order types.

Although it was close, we found that E*TRADE offers a more satisfying desktop trading experience due to its robust Power E*TRADE platform and backtesting capabilities.

Mobile Trade Experience

E*TRADE and Fidelity offer mobile apps that are reasonably easy to navigate. On E*TRADE, watchlists are integrated—and a full range of tradable assets (except for fixed income) are available—across platforms, making it easy to bounce between devices. Unlike Fidelity, E*TRADE’s mobile app supports conditional order types.

Fidelity supports stocks, ETFs, options, and mutual funds on its mobile app. Like E*TRADE, fixed income is missing from Fidelity’s mobile lineup. Mobile watchlists are shared with the desktop and web applications, and you can trade fractional shares and specify dollars rather than shares when entering an order. Fundamental analysis and charting are extremely limited on mobile.

While both apps are well-rated on the App Store, Fidelity has far more reviews. E*TRADE has 4.6 stars from 139,300 reviews, while Fidelity has 4.8 stars from some 1.9 million reviews. Overall, we found that either app should fit the needs of casual investors and traders, but only E*TRADE supports conditional orders, which could be an essential distinction for active traders.

Range of Offerings

E*TRADE and Fidelity offer all the standard trading products, including stocks (with shorts), ETFs, bonds, and mutual funds. Beyond that, there are a few notable differences. Only E*TRADE supports futures, futures options, and Bitcoin futures, while only Fidelity offers access to Forex and dozens of international exchanges.  Ultimately, a preference for one broker over the other may come down to the brokers’ range of offerings.

Order Types

E*TRADE supports a respectable variety of order types, including conditional orders, on its website and Power E*TRADE platforms. Mobile users can enter a limited number of conditional orders. It’s possible to stage orders for later entry on all platforms, and you can select a tax lot from your portfolio or order ticket to optimize tax efficiency.

Fidelity also supports the usual suspects (market, limit, stop, and trailing stops) and conditional orders on its web and Active Trader Pro platforms. Unlike E*TRADE, however, Fidelity doesn’t offer conditional orders on mobile. You can automatically allocate investments across multiple securities with an equal dollar amount or number of shares—a feature that’s not found at many online brokers.  

In terms of order types, the gap between the two brokers is negligible for most individual investors, but active traders will value the additional flexibility E*TRADE offers over Fidelity.

Trading Technology

E*TRADE’s order routing technology uses both spray and sequential routing, and it sends most orders to market makers. The router looks for a combination of execution speed and quality. According to its execution quality report, orders are filled in 0.10 seconds, on average. E*TRADE reports an average net price improvement of $0.007 per share, and it receives less than $0.0020 in payment for order flow for equity trades and less than $0.47 per options contract.

Meanwhile, Fidelity’s smart order routing technology seeks the best price available and can access all types of market venues, including dark pools, exchanges, and market makers. The company reports a net price improvement of $0.0264 per equity share and an average execution speed of 0.04 seconds. Unlike E*TRADE, Fidelity does not accept payment for order flow for stocks or ETFs (it does collect an average of $0.2514 per options contract).

Overall, Fidelity wins in the trading technology department due to its superior price improvement statistics, faster execution speeds, and lack of payment for order flow.

Costs

E*TRADE and Fidelity offer $0 commissions for online equity, ETF, and options trades. You’ll pay a $0.65 per-contact options fee at either broker, though E*TRADE drops that fee to $0.50 if you place at least 30 trades per quarter. OTCBB trades are free at Fidelity and either $6.95 or $4.95 per transaction at E*TRADE, depending on how many trades you place per quarter.

At $25, broker-assisted trades are a bit cheaper at E*TRADE versus Fidelity’s $32.95 fee. Transaction-fee mutual funds will set you back $19.99 at E*TRADE and $49.99 at Fidelity. Only E*TRADE offers futures, which you can trade for $1.50 per contract, per side. Margin rates at Fidelity are a bit cheaper than E*TRADE’s. On a $100,000 balance, the rate is 6.825% at Fidelity versus 7.45% with E*TRADE.

Overall, you might save money at Fidelity if you OTCBB or use margin, but E*TRADE will be cheaper if mutual funds or options are your focus.

Research Amenities

E*TRADE and Fidelity offer a comparable array of research amenities. Both have robust stock, ETF, mutual fund, and options screeners, including those that filter based on ESG/SRI factors. And both brokers offer numerous tools, calculators, idea generators, and professional research. While Fidelity’s screeners edged out E*TRADE’s in our tests, E*TRADE took the lead for its news offerings—making this category too close to call.

Portfolio Analysis

Here again, E*TRADE and Fidelity have similar offerings. On either platform, you’ll have access to real-time buying power and margin information, plus real-time unrealized and realized gains. Both offer tax reports (capital gains) and the ability to aggregate holdings from outside your account. However, only E*TRADE allows you to calculate the tax impact of future trades. And if you want access to a trading journal or real-time internal rate of return (IRR), you’ll find those only with Fidelity. Overall, Fidelity takes a slight edge in terms of portfolio analysis.

Education

E*TRADE and Fidelity offer a decent selection of educational content plus dozens of live webinars each month. You’ll find educational articles, life stage planning tools, and investing-related glossaries at either broker, and both offer in-person events (though these are on hold due to the Covid-19 pandemic). Overall, E*TRADE takes a slight lead here by offering paper trading capabilities and a broader range of educational topics.

Customer Service

E*TRADE offers 24/7 phone line support with access to brokers, retirement specialists, financial consultants, active trader consultants, and product specialists. You can chat online with a human representative and get in-person help at a relatively limited number (30) of branches. Fidelity has a 24/7 phone line, an online chat feature (limited hours), and a secure email portal. Overall, you can count on reliable customer service from either broker.

Security

E*TRADE’s and Fidelity’s security are up to industry standards. You can log into either broker’s app with biometric (face or fingerprint) recognition, and two-factor authentication is available on all platforms. Both brokers protect against account losses due to unauthorized or fraudulent activity.

E*TRADE carries excess Securities Investor Protection Corporation (SIPC) insurance, which protects customer accounts up to $500,000 for securities and cash (including $250,000 for cash only), with an aggregate limit of $1 billion. Fidelity’s SIPC insurance has no per-customer dollar limit on coverage of securities, but the total aggregate excess policy is $1 billion. Overall, investors can be confident in the security standards of either broker.

Our Verdict

E*TRADE and Fidelity are both considered powerhouses in the online brokerage industry, and most casual investors would likely be happy with either. They ranked closely across many of our metrics in the 2021 Best Online Broker awards. Overall, we found E*TRADE is an excellent choice for experienced active traders and investors—especially those who can take advantage of the broker’s sophisticated options analysis and trading capabilities. Meanwhile, Fidelity may be a better fit for casual investors and traders looking for low costs, low margin rates, and access to international trading.