E*TRADE vs Schwab Solo 401k (2026)
A comprehensive comparison to help you choose between E*TRADE Solo 401k and Charles Schwab Solo 401k
E*TRADE
E*TRADE offers one of the most feature-rich prototype Solo 401k plans available, with both Roth contributions and loan provisions at no cost.
Visit E*TRADESchwab
Charles Schwab offers a solid prototype Solo 401k with Roth contributions and no fees, though it lacks loan provisions.
Visit SchwabWhen comparing E*TRADE and Schwab for your Solo 401k, you're looking at two well-known brokerages that both offer free prototype plans. However, the similarities largely end there. E*TRADE has positioned itself as a feature-complete option for self-employed individuals who want maximum flexibility, while Schwab has taken a more conservative approach that increasingly looks dated in today's competitive landscape.
Both providers charge nothing for setup and have no annual fees, making them attractive options for cost-conscious entrepreneurs. They both support Roth contributions, allowing you to build tax-free retirement savings alongside traditional pre-tax deferrals. And both give you access to extensive investment options through their respective brokerage platforms.
The critical difference comes down to one feature that matters enormously to many self-employed individuals: participant loans. E*TRADE allows you to borrow up to $50,000 from your Solo 401k, giving you access to your retirement funds for business opportunities or emergencies without triggering taxes or penalties. Schwab does not offer loans at all, which represents a significant limitation for anyone who values having that financial safety net.
Schwab was once considered a top-tier option for Solo 401k plans, primarily due to its excellent customer service reputation. But as competitors have added features while maintaining competitive pricing, Schwab has stood still. The result is a plan that feels increasingly bare-bones compared to alternatives like E*TRADE that offer more functionality at the same price point.
Our Rating
E*TRADE has a higher rating based on our comprehensive review.
Pricing Comparison
| Fee Type | E*TRADE | Schwab |
|---|---|---|
| Setup Fee | $0 | $0 |
| Annual Fee | $0 | $0 |
| First Year Total | $0 | $0 |
Long-Term Cost Analysis
See how costs add up over time
| Time Period | E*TRADE | Schwab | Difference |
|---|---|---|---|
| 1 Year | $0 | $0 | Same |
| 3 Years | $0 | $0 | Same |
| 5 Years | $0 | $0 | Same |
| 10 Years | $0 | $0 | Same |
Green highlighting indicates the lower-cost option for each period.
Feature Comparison
| Feature | E*TRADE | Schwab |
|---|---|---|
Roth Contributions After-tax contributions with tax-free growth | ||
Participant Loans Borrow up to $50,000 from your plan | ||
After-Tax (Mega Backdoor) Contribute beyond standard limits | ||
Alternative Investments Real estate, crypto, private equity | ||
Checkbook Control Direct investment management |
Pros and Cons
Pros
- Offers both Traditional and Roth contributions
- Allows participant loans up to $50,000
- No setup or maintenance fees
- Wide range of investment options including stocks, ETFs, mutual funds, and options
- Commission-free online trades for stocks and ETFs
- Strong mobile app and research tools
Cons
- Limited in-service distribution options
- No after-tax (Mega Backdoor Roth) contribution option
- Cannot hold alternative investments like real estate
- Must use E*TRADE platform for investments
Pros
- Offers both Traditional and Roth contributions
- Wide range of investment options
- No setup or annual fees
- Excellent customer service
- Commission-free stock and ETF trading
- Strong research and educational tools
Cons
- No participant loan provisions
- No after-tax contribution option
- Limited to Schwab platform investments
- Manual paperwork for some administrative tasks
User Sentiment
E*TRADE
Highly rated for the specific demographic of "Liquidity Seekers." The ability to access a $50,000 line of credit tax-free via a participant loan without paying a setup fee is a massive value proposition.
Schwab
While the brokerage platform itself is robust and the Schwab Mobile app is excellent for trading, the Solo 401k product feels neglected. The lack of loans, combined with manual administrative processes, makes it difficult to recommend over Fidelity or E*TRADE.
Our Verdict
E*TRADE is the clear winner in this comparison, and it's not particularly close. When two providers both offer free plans with Roth contributions, the tiebreaker becomes additional features, and E*TRADE delivers where Schwab does not.
The loan provision alone makes E*TRADE the superior choice for most self-employed individuals. Having the ability to borrow up to $50,000 from your own retirement savings provides genuine financial flexibility. Whether you need capital for a business expansion, want to bridge a cash flow gap, or face an unexpected expense, that loan option can be invaluable. With Schwab, that money is locked away until retirement.
Schwab's main selling point has traditionally been customer service, and they do maintain a solid reputation in that area. But excellent phone support doesn't compensate for missing a feature that many Solo 401k participants consider essential. You can get good customer service from E*TRADE too, along with the full feature set you actually need.
The bottom line is straightforward: E*TRADE gives you more for the same price. Unless you have a specific reason to be loyal to Schwab, such as existing accounts you want to consolidate, E*TRADE represents the better value and the more complete Solo 401k solution.
Which Provider is Right for You?
Choose E*TRADE if:
E*TRADE makes sense for self-employed individuals who want a full-featured Solo 401k without paying extra for it. If loan access matters to you, the choice is obvious since Schwab simply doesn't offer it. E*TRADE is also ideal for those starting fresh who have no existing brokerage relationship and want the most capable free plan available.
Choose Schwab if:
Schwab is really only the right choice if you're already a committed Schwab customer with significant assets on their platform. The convenience of keeping everything under one roof might outweigh the missing loan feature for some. If you're certain you'll never need to borrow from your Solo 401k and you genuinely value Schwab's customer service experience, it remains a functional option.