Etrade is having trouble.
Will they go out of business?
Does it matter?
Well it would be a HUGE pain in my @#$@%!. But...
"E*Trade brokerage accounts are insured by the Securities Investor Protection Corporation, which can cover investors for up to $500,000 in cash and securities should a member broker go out of business, according to the SEC's Web site."
" Since the Federal Deposit Insurance Corp. guarantees bank accounts up to $100,000, customers with larger balances may move their money elsewhere, said Bhatia..."
What does all this mean? If you have more than $100,000 in cash at Etrade's bank or and/or more than $500,000 in cash and securities in an Etrade brokerage account, you should change that tomorrow. There is no point in risking your savings.
I don't have to worry, so I'm staying put. The hassle of having to deal with the SIPC if the brokerage unit collapses is less than having to try and document my transaction history.
I think a likely scenario is that another brokerage tries to buy Etrade, assuming they can end up with all the accounts without the bad debt... which would be a major bummer. Their site is very nice and the funds they offer are good.
I guess we'll see.