The Bottom Line
E*Trade is in the top-tier of on-line brokers offering a Coverdell Education Savings Account (ESA). A definite contender for someone serious about saving money for their child's college education.
Pros
- No fees.
- No minimum account balances to open or maintain.
- Access to over 1,000 no-load funds.
- Higher than average money market yields.
Cons
- Transaction fees are higher than some other on-line brokers.
- Branches in only 15 states.
Description
- No fee, no minimum Coverdell ESA.
- Access to over 1,000 no-load mutual funds.
- Money market fund yield claims to be 6x the national average.
Guide Review - E*Trade Coverdell Education Savings Account (ESA)
My two primary concerns with all Coverdell Education Savings Accounts are cost and investment selection. The E*Trade Coverdell ESA scores fairly high marks in both of these categories.
With regards to cost, you can't get any better than E*Trade's no fee, no minimum Coverdell ESA. Since many "no fee" accounts at other firms sneak in an inactivity charge, I made a phone call to E*Trade and verified that this was not the case.
My only concern with cost has to do with some of the transaction fees. If you are going to actively trade stocks, you can find equally reputable brokers that charge less. Further, if you want access to some of the more popular load funds, you'll pay a $20 transaction fee in addition to the fund's sales charge.
However, with over 1,000 no-load funds available, I feel like there is plenty of low-cost investment choices available for most investors.
