One of the many issues with the modern American financial system is the unreliability and unpredictability of the system. Once you have your money tied up with one institution, they make it difficult to access or transfer that money. Banks want to keep your money for as long as possible. The same is true with brokers.
To help persuade customers to pick its broker platform over others, E*Trade has begun offering a debit card to its users. But how good is this debit card and is it a comparable substitute to other cards attached to regular checking accounts? Here is our review of the E*Trade debit card.
Why Are We Talking About This?
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Feeling like you actually have control over your own money is an important aspect of any financial decision. If you invest your hard-earned money with an institution that charges you fees to use it, withdraw it, or move it, is that money really yours?
Adding a debit card feature to its brokerage platform, E*Trade is allowing customer more freedom with how they use their funds, but how good is that freedom, and is it worth it? The more information you have about it, the better decision you can make about where to invest.
Background on E*Trade
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E*Trade began as an online trading platform in 1991 and has grown steadily ever since. It went public in 1996 and was then acquired by Morgan Stanley (NYSE:MS) in October of 2020. This acquisition increased the product offering and range of services available at E*Trade, and as of that same year the company has grown to serve over five million customers and handles assets worth over $360 million. It is now among the best and most popular trading platforms in the world. For example, you can read our comparison between E*Trade and TD Ameritrade in our article here.
After the emergence of other online-only, digital-first trading brokers that charged zero commissions on trades and no account fees, E*Trade followed the example of other existing brokers and eliminated its own commissions and fees, lowering the barrier of entry for new, younger, and amateur traders.
E*Trade has won a number of awards for its mobile app and online trading platform which is easy to use and removes the jargon from industry reports and financial data but still offers deep customization and powerful tools for the professional trader.
E*Trade offers a wide variety of financial services which has only expanded since its acquisition by Morgan Stanley. These include different brokerage accounts, retirement accounts, managed portfolios with access to Morgan Stanley’s financial advisors, services for small businesses, banking services, and much more. It also now offers a high-interest savings account. Learn more about if E*Trade’s Premium Savings Account is right for you with our in-depth review.
However, it is as a trading platform that E*Trade truly shines with an extremely wide offering of stocks, options, mutual funds, ETFs, futures, bonds, CDs, pre-built portfolios, and IPO access, E*Trade has everything a trader could ever want. And for those customers who only want to trade, Power E*trade is available with even more in-depth analyses, customizable reports, and market prediction software that can turn any home office into a high-tech trading floor.
The E*Trade Debit Card
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E*Trade offers a handful of different debit cards depending on what kind of account you have with the company. Customers who have an individual, joint, or custodial brokerage account with E*Trade can request a debit card. Also, if you are over 59 ½ years old, you can request a debit card for your IRA account. Naturally, any checking account comes with debit card access as well.
The debit cards are free to request, but a fee is charged for any replacement cards.
The reason you’re probably reading this article, of course, is because you are interested in the debit card attached to a brokerage account. Relatively speaking, this is a new development in the financial world. Normally, any cash you have in your brokerage account can only be used for brokerage activities and trades or withdrawn if you want to use it for anything else. Any uninvested funds were essentially useless, neither earning interest like in a savings account nor earning value in stocks. Now, E*Trade customers can use their uninvested brokerage funds as they would any normal checking account, incentivizing them to keep more money in their account and making trading that much easier.
What are the specific benefits of the E*Trade debit card? The card is available through Mastercard (NYSE:MA) and gives access to over two million ATMs around the world. All cards have a chip embedded allowing chip security and payments. Customers can make $5,000 in purchases each day and can withdraw up to $1,000 in cash every day, as long as they have sufficient funds across all their accounts. All other benefits and access provided by Mastercard also apply.
E*Trade also will reimburse the fees charged by ATMs if you keep at least $50,000 in your E*Trade account or make more than 30 stock trades every quarter.
Keep in mind that debit cards are not automatically issued with the opening of a brokerage or IRA account, but they are free to request. Just don’t sit around waiting for it to show up!
Finally, it is important to remember that the power of a debit card is naturally based on the account to which it is tied. The account fees, balance minimums and account restrictions change depending on which kind of account you have, and how much money you have in those accounts. Additionally, when compared with other checking accounts or hybrid accounts, features of the E*Trade debit card comes up short since E*Trade does not pay competitive interest rates on uninvested funds.
If avoiding account fees is the most important feature of any checking account (or checking account equivalent) for you, then we encourage you to look into the details of the fee schedule of each financial institution instead of the debit card benefits.
The Verdict On The E*Trade Debit Card
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If all this makes it sound like the E*Trade debit card is unexciting and rather unremarkable, that’s because it is. A debit card, while boring, is an essential part of any person’s banking requirement, and doesn’t require any fancy bells or whistles. If you are looking for fancier debit card options, or cards that offer better benefits or account features, there are plenty available.
The E*Trade debit card simply makes it easier to manage your existing E*Trade funds and convinces many customers to keep their money with the company instead of spreading it to other financial institutions.
It wouldn’t make any sense to pick E*Trade just for their debit card feature. We can’t recommend it on its own, and it should not be a primary feature you are looking for in any brokerage. However, if you are comparing similar brokerage platforms, the debit card is just one more thing to make your trading experience with E*Trade that much more enjoyable and stress-free.
If you’re curious about any other part of the E*Trade platform, check out this page: a regularly updated list of all our E*Trade guides, news coverage, and lists of benefits.
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