When it comes to selecting an online brokerage, two names frequently come up: Ally Invest and E*TRADE. Both have long histories of serving retail investors and have earned reputations for offering robust platforms, competitive pricing, and diverse investment options. But despite their similarities, these two brokers cater to slightly different types of investors and have their own sets of advantages and drawbacks.
In this article, we will perform an in-depth comparison between Ally Invest and E*TRADE across various dimensions, including fees, trading platforms, investment options, research and tools, customer support, and more. Our goal is to help investors determine which platform best suits their needs, whether they are beginners, experienced traders, or active investors. Let’s dive in.
1. Fees and Commissions
Ally Invest:
Ally Invest offers low trading fees with a simple, transparent pricing structure. For self-directed trading, the cost to trade stocks and ETFs is $0 per trade. This makes it one of the most affordable brokers in the market today. Options trades are similarly inexpensive at $0.50 per contract. For investors who are looking for cost-efficient trading, Ally Invest’s pricing model is extremely competitive. Additionally, there are no account maintenance or inactivity fees, which is a welcome benefit for those who are not frequently trading.
E*TRADE:
ETRADE also offers $0 commissions on online stock and ETF trades, aligning with Ally Invest in terms of basic pricing. However, ETRADE’s pricing structure is slightly more nuanced when it comes to options trading. While the base cost for an options trade is $0, the per-contract fee is $0.65, which is slightly higher than Ally Invest’s fee of $0.50 per contract. For those looking to trade mutual funds, E*TRADE offers more than 4,000 no-load, no-transaction-fee mutual funds, though some funds may carry transaction fees, which can add to the cost.
Conclusion on Fees:
Both Ally Invest and ETRADE offer very competitive pricing on stock and ETF trades. For options traders, Ally Invest has a slight edge with its lower per-contract fee. If you’re an investor focused primarily on mutual funds, ETRADE’s extensive selection of no-transaction-fee funds might be an attractive feature, although Ally Invest’s mutual fund offering is also solid.
2. Trading Platforms and Tools
Ally Invest:
Ally Invest offers two primary platforms for trading: its web-based platform and the Ally Invest mobile app. The web platform is designed for simplicity, making it a good choice for beginners. While it is not as feature-rich as some of the more advanced platforms out there, it provides all the essential features such as real-time quotes, charting tools, and access to different asset classes like stocks, options, and ETFs. The mobile app also mirrors the desktop experience, offering the same tools and ease of use.
For active traders, Ally Invest’s desktop platform may feel limiting. It doesn’t provide some of the advanced features found in more specialized platforms like ETRADE’s Power ETRADE.
E*TRADE:
ETRADE, on the other hand, offers a robust, multi-faceted trading experience. The web platform is highly customizable, with advanced charting tools, screeners, and a large selection of technical indicators. For traders looking for more complex orders, ETRADE’s platform supports conditional orders and advanced options strategies, such as straddles and spreads. ETRADE also offers a professional-grade desktop platform called Power ETRADE, which is tailored to active traders. It features advanced charting, streaming data, customizable layouts, and in-depth analysis tools, making it ideal for those who need more sophisticated tools and greater control over their trades.
Conclusion on Platforms and Tools:
Ally Invest offers a simpler, user-friendly platform suited for beginners or casual traders, but it lacks the advanced capabilities of platforms like Power ETRADE. ETRADE stands out with its powerful desktop platform, making it the better choice for active traders or those who require more advanced trading features.
3. Investment Options
Ally Invest:
Ally Invest provides a broad range of investment options, including stocks, ETFs, options, bonds, and mutual funds. It offers access to more than 12,000 mutual funds, including many with no transaction fees, which is a solid offering for those focused on building diversified portfolios. Ally Invest also offers a robo-advisor service for those who prefer a more hands-off approach to investing, which can be a good choice for beginners.
E*TRADE:
ETRADE’s investment selection is equally impressive, if not more so. In addition to stocks, ETFs, options, and bonds, ETRADE also offers futures trading for more experienced traders. ETRADE is well-known for its wide selection of mutual funds, and the company offers more than 4,400 no-transaction-fee mutual funds. Additionally, ETRADE provides access to IPOs, which can be a valuable feature for investors looking to get in early on high-growth companies. The addition of futures trading is a significant advantage for those who want to diversify beyond traditional assets.
Conclusion on Investment Options:
Both Ally Invest and ETRADE offer a broad selection of investment options, but ETRADE’s inclusion of futures trading and IPOs gives it a slight edge, especially for more experienced or active traders. Ally Invest is more focused on the essentials and may be better suited for beginners who don’t need a broad array of products.
4. Research and Education
Ally Invest:
Ally Invest provides a decent array of research tools for its users, though it is somewhat limited compared to other brokers like E*TRADE. It offers basic research resources, including stock screeners, third-party reports, and fundamental analysis. However, Ally Invest lacks some of the more advanced research tools such as real-time news feeds and in-depth market commentary. Educational resources are available through Ally Invest’s website, including articles, videos, and webinars designed to help beginners understand key concepts of investing.
E*TRADE:
ETRADE stands out in terms of research and education. It offers extensive research tools from major third-party providers like Morningstar, CFRA, and MarketEdge, providing deep insights into individual stocks, ETFs, and mutual funds. ETRADE also offers comprehensive market news, analysis, and advanced screeners. The educational content available is excellent, with a variety of articles, videos, and webinars designed for traders of all experience levels. The platform’s research and educational offerings are especially useful for intermediate and advanced investors looking to stay informed and improve their trading strategies.
Conclusion on Research and Education:
ETRADE significantly outperforms Ally Invest when it comes to research tools and educational resources. Investors looking for deep, actionable insights and high-quality educational content should lean toward ETRADE.
5. Customer Support
Ally Invest:
Ally Invest offers customer support through various channels, including phone, email, and live chat. While the service is generally responsive, some users report longer wait times during peak periods. Ally Invest’s support staff are knowledgeable and can assist with most issues, from trading-related queries to technical troubleshooting. The website also features a robust FAQ section that can answer many common questions without the need to contact customer support.
E*TRADE:
ETRADE provides comprehensive customer support as well, with phone support available 24/7. Additionally, the platform offers live chat and email support for users who prefer written communication. ETRADE has received positive reviews for the professionalism and responsiveness of its customer service staff. There’s also an extensive help center with answers to most common questions, along with educational resources to assist users in resolving issues independently.
Conclusion on Customer Support:
Both Ally Invest and ETRADE offer strong customer support, though ETRADE’s 24/7 phone support and high level of professionalism make it the winner in this category, particularly for investors who prioritize responsive and accessible customer service.
6. Account Types and Features
Ally Invest:
Ally Invest offers a variety of account types, including individual taxable accounts, traditional IRAs, Roth IRAs, and custodial accounts. It also has a cash management feature for those who want to link their brokerage account to a savings account with a competitive interest rate. The account opening process is easy and can be done online in a few minutes. Ally Invest offers automatic rebalancing for its robo-advisor accounts, making it a good choice for hands-off investors.
E*TRADE:
ETRADE offers an even wider range of account types, including individual, joint, retirement accounts (Traditional IRA, Roth IRA, SEP IRA, etc.), custodial accounts, and trust accounts. ETRADE also provides access to managed portfolios through its ETRADE Core Portfolios program, which can be a good option for investors who want professional management of their funds. Additionally, ETRADE’s account opening process is simple, and it offers tools to help you manage your portfolio more effectively.
Conclusion on Account Types and Features:
While both Ally Invest and ETRADE offer a variety of account types, ETRADE’s expanded offerings, such as trust accounts and more advanced portfolio management options, provide a wider array of choices for investors looking for flexibility in their account setup.
Final Thoughts: Ally Invest vs E*TRADE
In conclusion, both Ally Invest and E*TRADE are excellent online brokers, but they cater to slightly different types of investors. Ally Invest is perfect for beginners and cost-conscious investors who want a simple, no-frills platform with competitive fees. Its low-cost structure and user-friendly design make it ideal for casual investors who don’t need a lot of bells and whistles.
On the other hand, E*TRADE is the better choice for active traders, experienced investors, or those who require advanced tools and features. Its extensive research resources, powerful trading platforms, and broader range of investment options make it a strong contender for those who demand more sophistication in their trading experience.
Ultimately, your choice between Ally Invest and E*TRADE will depend on your individual investment style, experience, and preferences. Both brokers provide solid value, but the right one for you will depend on how you approach investing.
