The No. 2 online brokerage house will automatically deduct a $15 fee each fiscal quarter unless the account carries a $5,000 minimum balance, according to an email sent to E*Trade customers on Thursday. Accounts with less than $5,000 can avoid the fee if the owner has completed at least two trades in the six months before the quarter's end.
Executives at Menlo Park, Calif.-based E*Trade did not return phone calls Thursday.
The proposed fee increases have angered some customers. On E*Trade's message board Thursday, one customer demanded that E*Trade leave his account alone.
"I will be transferring my account to another brokerage or liquidating my account promptly if you cannot assure me that I will never be charged these fees," the customer wrote. "In addition, I will be advising my friends and colleagues to do the same."
A down stock market has meant a drop in the number of trades, and most online brokers are under pressure to find new revenue streams. E*Trade and the Web's top brokerage, Charles Schwab, have expanded their financial services offerings, including mortgage lending, savings and checking accounts, and ATMs.
In response to the customer's complaint, an E*Trade customer service representative said the price hikes are so the company can afford to "deliver high-value services" to all of its customers. He added that fees are on par with those charged by many of its competitors.
"For example, some brokers charge between $15.00 and $25.00 per quarter and have minimum balance requirements ranging from $5,000 to $30,000," the representative wrote in an email.
E*Trade's IRA and Power E*Trade accounts as well as any accounts opened for less than a year are exempt from the new fees.