E-Trade Savings Account Interest Rates for April 2024
Written by
Daria Uhlig
Edited by
Elizabeth Constantineau
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E-Trade from Morgan Stanley is well known for its $0-commission brokerage accounts, but that’s just one of the account types E-Trade offers. You’ll also find bank accounts, including a high-yield savings account called Premium Savings Account that earns a highly competitive annual percentage yield on all balance tiers. The Premium Savings Account fully integrates with E-Trade brokerage accounts, but you don’t have to be a brokerage customer to open one.
What Is the E-Trade Savings Rate?
E-Trade has just one savings account, the Premium Savings Account, and the annual percentage yield is as of April 18. That APY is nine times the national average, according to the E-Trade website, and you earn it on your entire balance. The interest is compounded daily, so your balance grows faster, and it’s credited to your account once a month.
While you need to have a balance in order to earn interest, you have 30 days to make your first deposit. There’s no minimum deposit amount or balance requirement, and the account has no monthly fees.
E-Trade Premium Savings Account Restrictions
E-Trade Premium Savings Accounts have a couple of limitations you should be aware of. First, the account is ineligible for an ATM/debit card. You can deposit money via E-Trade Mobile check deposit, electronic transfer or wire transfer, or you can transfer over an account from another financial institution. Transfers from external accounts become available on the third business day after the date of a deposit made by 4 p.m. ET.
Without a debit card, the only way you’ll have to withdraw money is to transfer it to an account from which you can make ATM, check or other withdrawals. E-Trade gives you several ways to do that: written request, phone request, online transfer or electronic funds transfer. However, E-Trade imposes a six-transfer limit per calendar month for outbound transfers. If you exceed the limit, E-Trade may close your account, convert it to a checking account or disable your ability to make transfers.
How E-Trade Savings Rates Compare To Other Banks
The primary benefits of the Premium Savings Account are its high yield and ability to integrate with an E-Trade brokerage account. Other banks offer a similar bundle of services. Here’s how E-Trade savings rates stacks up to a few of its competitors.
E-Trade vs. Wells Fargo
Wells Fargo investing and wealth management customers can open a high-yield Brokered Liquid Deposit account that serves as a source of investing funds but is also available for withdrawal. The APYs are tiered, with the lowest tier — balances of $100,000 to $999,999 — earning APY and the highest, for balances of $100 million or more, earning APY. Deposits are FDIC insured up to $250,000 per depositor or $500,000 for joint accounts. The account has a $100,000 minimum opening deposit and a $10,000 minimum for subsequent deposits.
The Wells Fargo Brokered Liquid Deposit APY is impressive, but the high minimum deposit puts the account out of reach for many, if not most, people. E-Trade’s Premium Savings Account has a lower rate, but anyone can open one for both personal savings and to hold funds they intend to invest.
E-Trade vs. Citi®
Citi’s savings account features and benefits vary by tier. Everyday accounts, which serve as basic savings for customers with less than $30,000 in balances, are at the low end, and Citi Relationship Private Client, for customers with balances of $1 million or more, are at the high end. All tiers receive commission-free trading through Citi Self-Invest from Citi Personal Wealth Management. However, savings rates are low, starting at for the Everyday tier — well below the national average, and just a fraction of the rate E-Trade offers.
E-Trade vs. Bank of America
Of the three comparison banks, Bank of America, Member FDIC, does the best job of integrating its banking and brokerage — which, in this case, is Merrill. Account holders can access their investment and bank accounts and transfer money between accounts instantly. However, the savings interest rate is low — is the standard rate, and even the Platinum Honors Tier earns just . What’s more, Bank of America’s account has a $100 minimum deposit when you open the account. The monthly fee is $8, which can be waived.
E-Trade appears to offer everything Bank of America does in terms of integration with investing accounts, plus a high yield and no minimums or monthly fees.
Is the E-Trade Premium Savings Account Safe?
Yes. Depending on your savings balance, it might be even safer than your current bank.
Whereas deposits in a typical bank are insured up to $250,000 per depositor, E-Trade will transfer money from your Premium Savings Account into accounts at other FDIC-member banks to double your FDIC insurance coverage. That allows E-Trade to provide up to $500,000 worth of insurance coverage — $1,000,000 for joint accounts.
It’s important to note that the FDIC insurance protects your Morgan Stanley Private Bank deposit accounts only — brokerage accounts are uninsured.
E-Trade Premium Savings Account Pros and Cons
E-Trade’s Premium Savings Account compares favorably to competing accounts, especially when it comes to rates. But it’s important to also consider possible drawbacks before you open an account.
Pros
These features and benefits make E-Trade’s savings account stand out:
- Highly competitive APY for all tiers
- Full integration with E-Trade brokerage account
- No minimums or monthly fees
- FDIC-insured up to $500,000 per depositor — twice the usual coverage limit
Cons
Weigh the pros against these potential drawbacks:
- No ATM card, so funds can be difficult to deposit and withdraw
- No rewards program or other incentives
- External outbound transfers limited to six per month
Other E-Trade Savings Options
E-Trade gives you several options besides a high-yield savings account.
The first is an E-Trade checking account. E-Trade has two to choose from, and both pay higher-than-average APYs. The basic account is simply called Checking, and it earns APY. Checking has no minimum opening deposit or balance minimum, and no monthly fees. In addition, Morgan Stanley Private Bank won’t charge you a fee for withdrawing funds from another institution’s ATM, and it will refund any fees imposed by those institutions within the U.S.
The other option is Max-Rate Checking, which offers an outstanding APY and worldwide ATM refunds. Max-Rate Checking has a $15 monthly fee that Morgan Stanley Private Bank will waive as long as you maintain an average monthly balance of at least $5,000.
If you’re saving for retirement, an individual retirement account, offered by E-Trade Securities, might be a good alternative to a savings account. E-Trade offers traditional and Roth IRAs as well as a beneficiary IRA and an IRA for minors. There’s also an E-Trade Complete IRA that offers immediate access to your savings with free checks, a free debit card and online bill pay. The account has no minimums and no fees, but you must be 59.5 years old to qualify for one, and you must upgrade to E-Trade Complete from an existing select E-Trade IRA, which you can open for the purpose of making the upgrade. And remember, the IRAs are brokerage accounts that are not insured by the FDIC.
What Is the Best High-Interest Rate Savings Account?
The E-Trade Premium Savings Account could be the best choice for anyone who doesn’t mind banking strictly online and can do without the ATM card. The rate is highly competitive, and the account fully integrates with E-Trade brokerage accounts, so it’s an easy way to manage cash you want to make available for trading.
If, on the other hand, you don’t need brokerage account integration, you might be better off with a savings account from an online bank such as Ally or Discover. Both offer high yields on savings but also have checking accounts, certificates of deposit and other bank products, and they provide access to investing in case you decide you want that later.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of April 18, 2024.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
