E-Trade CD Rates for April 2024

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E-Trade from Morgan Stanley is a financial services company specializing in commission-free trading of stocks, ETFs and mutual funds. The company also offers bonds, futures and options for a fee.

An E-Trade account has no account minimums and no maintenance fees, making it an affordable choice for retail investors.

In addition to various brokerage accounts, E-Trade also offers checking and savings accounts, retirement accounts, lines of credit and brokered certificates of deposit.

E-Trade CD Rates

Unlike some financial institutions, E-Trade does not publish its CD rates or make them accessible to the general public online. That’s because E-Trade offers brokered CDs and the rates differ depending on which bank issued the CD. When you buy a brokered CD, you purchase it through E-Trade with the option to sell it before it matures.  

Third-party sources reported that E-Trade CD rates typically yield 4% to 5.50%, which is comparable to some of the best bank CD rates of 2024. Terms can range from three months to more than 30 years.

E-Trade CDs with terms of one year or less typically pay interest quarterly or upon maturity. CDs with terms of more than one year have additional options — interest can be paid monthly, quarterly, semiannually, annually or at maturity.

What Are Brokered CDs?

Brokered CDs are similar to the CDs that banks issue. These are fixed-rate investments that promise a set amount of return on your investment as long as you keep your money invested until the maturity date.

Brokered CDs have an advantage for many people, however, because you can buy and sell them on a secondary market, penalty-free. Rather than cashing in your CD before its maturity date, losing interest and incurring penalties, you can sell it for cash.

As with bank CDs, brokered CDs are FDIC-insured by the bank that sold it, up to $250,000 per issuing bank, per depositor. If you purchase multiple brokered CDs from different banks and hold them in the same account, you’ll increase your FDIC insurance to as much as $250,000 per bank.

Fees and Penalties on E-Trade CDs

E-Trade has no minimum account deposit or monthly maintenance fees for its brokerage accounts, which include the capability to buy and sell brokered CDs.

You can buy a newly issued brokered CD from any of the hundreds of banks listing new CDs for sale through the E-Trade brokerage with no fees or commissions. If you want to purchase a CD on the secondary market, expect to pay $1 per CD.

If you purchase a CD from E-Trade and decide you want to sell it before the maturity date, you won’t pay any fees if you can sell it on the secondary market. But if the interest rate on your CD is lower than current market rates, you might have to sell the CD at a loss.  

However, if you can’t find a buyer, you could pay early withdrawal penalties and lose the interest you would have earned by keeping your CD in your brokerage account.

Brokered CDs are callable, which means the CD issuer could decide to close the CD before the maturity date. This can disrupt your financial plans

How E-Trade CDs Compare

When you’re shopping for CDs online, you’ll want to weigh your options to find the best product for you. Here are some other brokerage accounts that also sell CDs.

Charles Schwab

Charles Schwab is a top brokerage offering fixed income investments, including CDs through Schwab CD OneSource. The CD rates are higher than what you might find at traditional banks. Schwab offers both callable and non-callable CDs.

Here are the CD rates for Charles Schwab:

When you purchase Schwab CDs through the secondary market, you’ll pay a transaction fee of $1 per CD.

Fidelity

Fidelity is another excellent option for investors looking to buy brokered CDs. One advantage of Fidelity is that you can purchase fractional CDs starting at $100. You’ll need a minimum investment of $1,000 for most CDs from Fidelity.

Here are the current rates for newly issued CDs from Fidelity as of April 2024:

E-Trade CD Pros and Cons

Brokered CDs have many advantages over bank CDs, including the flexibility to try and sell them on the secondary market if your financial situation or goals change. Here are some of the pros and cons of E-Trade’s brokered CDs.

Pros

• FDIC-insured, potentially beyond the $250,000 federal limit
• Interest rates may be higher than most traditional bank CDs
• Option to sell on secondary market
• No monthly maintenance fees

Cons

• CD may be callable, which means you could lose interest earnings
• May be difficult to quickly sell on the secondary market
• Interest is not typically compounded

How To Open an E-Trade CD

Opening an E-Trade CD is easy. If you don’t have an E-Trade account, you’ll need to set one up. Be prepared to provide some personal information, including your name, address and Social Security Number.

Once you have opened your account, you can log in and click “Brokered CD.” Search for the product you want based on new issue or secondary market, yields and maturity dates.

When you find the CD you want, you’ll have to make sure you have the funds in your brokerage account to purchase it. If not, you can make an electronic transfer from another financial institution. Funds will appear in your account within three business days. If you transfer money from your Morgan Stanley Private Bank account, funds will be available immediately upon transfer.

You can also use a wire transfer from an external account. Funds will be available on the same business day if received before 6 p.m. EST. Alternatively, you can deposit a check using the app’s mobile deposit feature or mail a check made payable to E-Trade.

Once your money is in your account, you can choose the CD you want to buy, read the fine print and purchase the CD.

Who Is an E-Trade CD Best For?

An E-Trade CD is best for investors who already have an E-Trade account and want the ease of managing their investments on one platform. E-Trade CD rates may be better than many traditional banks, but you could find even higher rates from other trading platforms.

E-Trade CDs also provide estate protection, which means that the CD can be redeemed at face value, regardless of market price, by an heir if the original account holder dies. For people concerned about wealth preservation, CDs are a low-risk way to hold funds, giving your loved ones easy access to cash should you pass.

Anyone looking for fixed and stable investments with low risk to diversify their portfolio might consider E-Trade brokered CDs.

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.

Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of April 23, 2024. 

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