Pros / E-Trade’s money-market and investing tools are top notch.
Cons / There is a minimum deposit of $100 for a checking account and an annual fee of $15.
Verdict / We recommend this online bank for those who are looking to diversify their portfolios.
Editor’s Note: This product has been removed from our side-by-side comparison because it has been replaced by another product. You can still read our original review below, but Top Ten Reviews is no longer updating this product’s information.
Most people know that E-Trade has an extensive online service for investing in the stock market. It has become the go-to tool for at-home investors in every imaginable market. From day trading to basic certificates of deposit, E-Trade is one of the most well-known resources. However, most people don’t know that E-Trade also offers a variety of different online banking options. There are savings and checking account options available with this online bank.
E-Trade is very well known for online trading and is associated with the stock market in many people's minds. However, the company's savings and checking account options are extensive and useful, especially if you already have an account for online trading. However, its checking accounts have a small annual fee and a minimum deposit of $100. The savings accounts, however, have a terrific interest rate of .3 percent.
***How we formulate the Benchmark Data:
Under the Benchmark tab labeled "Online Banks' Interest Rates," you will find the basic interest rate paid on a savings account for new customers. This number is not static and will change based on the amount you deposit, your current balance and special promotions the bank might be having. The interest rate we have displayed was obtained by contacting the bank to evaluate the interest rate on a new account with the lowest possible minimum balance.
The second Benchmark tab, "Online Bank Interest Rates Compared to Major Banks," is a computation of the interest rate found at the online bank, as above, and divided by the average rate of major “brick and mortar” banks. The average interest earnings for these banks is currently calculated as .05%, and was derived by contacting the three major banks (Wells Fargo, Bank of America, and Chase), and averaging their interest earnings rate for a similar account.
The Benchmark values found under this tab represent the ratio of each online bank's interest rate to .05% (the brick and mortar average). The value you see here is a product of that ratio, which is obtained by dividing the estimated interest rate found at online banks (the values in the first tab) by the average interest rate of the brick and mortar banks (.05). The banks that feature a larger Benchmark number than competing banks in our review provide a proportionately higher interest earnings rate on savings. The data used to compute these values is current as of October 2011.