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ETrade Bank Review

ETrade Bank offers online banking services nationwide. It has two checking accounts, a savings account, and a money market account.

As its name implies, ETrade, the group to which ETrade Bank belongs, is primarily an online brokerage and investing company. It’s very good at what it does, and has won accolades from Barrons as well as SmartMoney, which named it No. 2 in its 2010 list of best online brokers. Before that, it had been either No. 1 or No. 2 for four years. In March 2010, the group, which was founded in 1992, had 3,200 employees, and 28 retail branches across the country.

This focus on brokerage and investments may partly explain why ETrade Bank sold a block of its online savings accounts to Discover Financial Services in January 2010. According to the Chicago Tribune, this move was “in keeping with the strategy of reducing the bank’s balance sheet and, therefore, the capital required to support the bank.”

Checking and savings account choices

In spite of this strategy, ETrade Bank still has a number of online savings and checking account options, along with a money market account. At the time of writing, there is no CD product.

The ETrade Checking Account has no monthly account fees, but pays no interest on balances, while the Max-Rate Checking Account is interest bearing, but may charge a monthly fee unless certain (quite high) minimum balances are maintained both in the account itself and in linked trading accounts. These checking accounts offer unlimited free online bill payments, along with a range of other no-cost services.

The savings account has no account fees or minimum balance requirements, and can be opened with an initial deposit of just one dollar. The money market account has tiered rates that may rise the more that is deposited. Both accounts charge a fee for issuing checks.

FDIC insurance

Eligible deposits in all ETrade Bank accounts (though not in ETrade brokerage or investment accounts) are insured in accordance with current FDIC requirements.

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