E*TRADE

Is E*TRADE safe?

Yes, for holding US stocks, ETFs and funds it is among the safer places to keep a brokerage account. Since Morgan Stanley bought E*TRADE in October 2020, the brand has been folded into the bank. Accounts that used to sit with E*TRADE Securities LLC are now held by Morgan Stanley Smith Barney LLC, one of the largest US broker-dealers, with SIPC cover, an excess policy and a parent that earned $16.9 billion in 2025. We score it 85/100.

The weaker factor is conduct. Morgan Stanley's wealth arm has paid several large fines since 2022, one of them over customer data, and E*TRADE customers are suing over the interest paid on swept cash.

Which company holds my E*TRADE account?

BrokerCheck shows that E*TRADE Securities LLC ceased business on 14 December 2023 and gave up its registration in June 2024. The footer of every E*TRADE page now names the companies involved:

Product	Company	Regulator	Protection
Brokerage and advisory accounts	Morgan Stanley Smith Barney LLC	SEC, FINRA	SIPC plus Morgan Stanley excess cover
Bank accounts and swept cash	Morgan Stanley Private Bank, N.A. and Morgan Stanley Bank, N.A.	OCC, Federal Reserve	FDICDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary
Futures	E*TRADE Futures LLC	CFTC, NFA	No SIPC cover
Crypto	Zero Hash LLC, outside Morgan Stanley	State money transmitter licences	No SIPC or FDIC cover

E*TRADE is a US service. We found no UK or EU entity in its current set-up, so the score is based on the US companies above.

How is my money protected?

Securities you own are held for you and must be kept apart from the broker's own assets under SEC rules. If assets went missing after a failure, SIPC would cover up to $500,000 per customer, including $250,000 of cash. Morgan Stanley adds a supplemental policy on top. Its cap is $1 billion for securities across the whole firm, and up to $1.9 million per client for uninvested cash.

That $1 billion cap looks small next to the $1.81 trillion that Morgan Stanley's self-directed clients held at mid-2026. In practice it is a backstop for a shortfall, not insurance for every client at once, and the same is true at Charles Schwab and other large brokers.

Cash you have not invested is swept into Morgan Stanley's own banks under the Bank Deposit Program. E*TRADE says it is FDIC-insuredDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary up to $500,000 for individual accounts and $1 million for joint accounts, because it is spread across two affiliated banks. If you also hold an E*TRADE savings account or CDs, those sit at the same banks and count towards the same limits.

How strong is Morgan Stanley?

Very strong by any measure we use. Morgan Stanley earned $16.9 billion on $70.6 billion of revenue in 2025 and $11.1 billion in the first half of 2026. At 30 June 2026 its Common Equity Tier 1CET1 ratioA bank's highest-quality capital (mainly shares and retained profits) as a share of its risk-weighted assets. Higher means more room to absorb losses.More in the glossary ratio was 14.9% and total equity was $117.4 billion. Moody's rates its long-term debt A1 and S&P A-, both with a stable outlook. As a bank holding company it is supervised by the Federal Reserve and goes through the annual stress tests. Morgan Stanley's 10-Q says Morgan Stanley Smith Barney held capital above its regulatory requirement.

What fines and lawsuits matter?

E*TRADE's own broker had a modest record: BrokerCheck lists 93 regulatory events over three decades, mostly small exchange fines. The largest recent one was $2.25 million from FINRA in 2020 for about 4,850 inaccurate blue sheet reports covering more than 11 million trades. In January 2022 it paid $350,000, split between FINRA and four exchanges, because its surveillance was not built to catch manipulative trading in thinly traded stocks.

Morgan Stanley Smith Barney, which now holds the accounts, has a heavier record:

• September 2022, SEC, $35 million: it failed to protect the personal information of about 15 million customers when it decommissioned old servers and hard drives.
• September 2022, SEC, $125 million (together with an affiliate): staff used personal messaging apps for business.
• 2024, FINRA and Massachusetts, about $2.4 million in total: municipal bond settlement failures, trade confirmations without required mark-up details, and supervision of an insider's trading.
• December 2024, SEC, $15 million: weak controls let four financial advisers take money from client accounts.

Since February 2024 customers have also filed class actions claiming that Morgan Stanley Smith Barney and E*TRADE Securities paid unreasonably low interest on swept cash. Morgan Stanley says it is also answering requests from state securities regulators about sweep balances. These claims are unproven and are about interest paid, not about the cash being at risk.

How to keep your E*TRADE account safe

1. Turn on multi-factor authenticationTwo-factor authenticationSigning in with a second proof of identity on top of your password, such as a code from an app, a security key or a passkey.More in the glossary in your security settings. It is not on by default, and an authenticator code is stronger than relying on your password alone.
2. Set alerts for logins, money movement and changes to your profile.
3. Do not link your login to aggregator apps you do not need. E*TRADE says activity through a third party you authorise may fall outside its Customer Protection Guarantee.
4. Keep crypto balances small or elsewhere if you want SIPC-style protection. Crypto through E*TRADE sits with Zero Hash and has none.

How we scored it

Regulation (94), financial strength (93) and investor protection (89) are E*TRADE's strong points, thanks to Morgan Stanley's capital, SIPC plus excess cover and FDIC-insuredDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary sweep banks. Conduct (62) is the weakest factor, after a run of Morgan Stanley fines and the pending sweep cases. Account security (78) reflects optional multi-factor login and the 2022 data case. For a comparable big-bank-backed broker, see Fidelity Investments.