Etrade Insufficient Funds: Can’t Buy on ETrade

LAST UPDATED: May 4, 2023 | By Conrad Golly
Etrade Insufficient Funds Can't Buy on ETrade

When it comes to transfers and deposits ETrade can indeed be slow to act. You might see an available net balance in your account but are still unable to buy stocks on ETrade. This can have several reasons, like Etrade Insufficient Funds, of which ETrade does a poor job of informing you.

You can’t buy stocks on ETrade before your deposit has cleared. This may take up to 3 business days for external accounts. Internal transfers from other ETrade accounts funds will be available immediately to buy stocks.

Let’s look at what kind of restrictions ETrade places on buying stocks in general and then in a bit more detail on the problem of insufficient funds in your ETrade account. I’ll also outline 4 simple steps to avoid those restrictions and buy stocks on ETrade.

What Restrictions does ETrade place on buying Stocks?

Etrade Insufficient Funds Can't Buy on ETrade

Generally, ETrade only restricts buying stocks in a few instances. These include the verification requirements of new accounts, the availability of your funds, or the purchase of specific types of stocks.

Let’s go through these, one by one:

  • Account Verification: You will not be able to buy stocks on ETrade before your account has been verified and you have completed KYC. This is a regulatory hurdle that all stockbrokers must comply with.
  • Insufficient Funds: Obviously you won’t be able to buy any stocks on ETrade if you have insufficient funds in your account. However, even after depositing funds and the funds appearing in your ETrade cash account they might still not be available for trading.
  • Penny Stocks: If you are trying to place a market order for penny stocks ETrade will disallow that trade. When buying penny stocks or other special asset classes make sure to always place a limit order.

In the following sections, I’ll address the insufficient funds problem in a bit more detail so you can figure out where exactly the error originates from.

Why ETrade says insufficient Funds

ETrade customers frequently get the following error message displayed: “We cannot accept this order because there are insufficient funds in your account.”

This can be quite frustrating especially if you have just completed depositing funds to your account and your net account value clearly shows that you have enough funds available. ETrade does a poor job of informing us exactly why it is that there are insufficient funds available. Luckily, the solution is quite simple: wait.

Depending on the type of transfer it can take up to 3 business days for your deposit to be processed by ETrade and your funds to settle.

Once the funds have settled in your account they will appear as non-margin purchasing power and you’ll know that you’ll be ready to buy stocks.

When is Cash available for Investment on ETrade

Since it can be quite confusing exactly how long you have to wait until cash deposits settle on ETrade I have compiled this table of deposit types and the time it takes until funds are available for trading. You can also find this information on ETrade here.

Deposit typeFunds availableFrom external account to E*TRADE BankThird business day after the Transfer Money request is entered if submitted before 4 p.m. ET
From external account to E*TRADE BrokerageThird business day after the Transfer Money request is entered if submitted before 4 p.m. ET
Based on cleared equity in your E*TRADE Brokerage account, some or all of the funds may be available for investment immediately.
From E*TRADE Bank to E*TRADE BrokerageImmediately
From E*TRADE Brokerage to E*TRADE BankImmediately
From E*TRADE Bank to E*TRADE BankImmediately
From E*TRADE Brokerage to E*TRADE BrokerageImmediately
From E*TRADE Bank/Brokerage to E*TRADE IRAFunds are available for investment immediately.
Funds are available for withdrawal by:

2nd business day if submitted by 4 p.m. ET, and3rd business day if submitted after 4 p.m. ET.
Funds are debited within 2-3 business days from E*TRADE Bank/ Brokerage accountFrom E*TRADE Bank/Brokerage to External AccountContact the external institution you are transferring funds to.

The most common scenario is transferring from an external bank account to deposit funds to your ETrade brokerage account. This will likely result in a waiting time of 2-3 business days. Thus, funds that were deposited on a Friday will likely not be available for trading until Tuesday or Wednesday, a full 5 days after the deposit was made!

However, ETrade will typically take the longest amount of time to settle and verify your very first account deposit. Subsequent transfers should be processed a bit faster but may still take a couple of days to be available.

How to buy Stocks on ETrade

How to buy Stocks on ETrade

To sum up, here’s how you deposit funds and buy stocks on ETrade in a few simple steps:

  1. Deposit Funds: Transfer funds from your bank account to your ETrade brokerage account.
  2. Wait: Sit tight for a few days and check the table above to see the average time it takes for funds to settle.
  3. (Optional) Trade on Margin: In the meantime, you could consider also opening a margin account for faster access to funds.
  4. Buy Stocks: When cash appears as non-margin purchasing power you know that you’re ready to buy stocks. Place your order as you usually would. If you’re buying penny stocks remember to only use limit orders.

Etrade Insufficient Funds: The bottom Line

You need to wait until your deposit has been processed before you can buy stocks on ETrade. If you’re transferring money from another bank, it may take up to three business days to process. However, if you’re transferring money from another ETrade account, you can buy stocks right away.

Conrad Golly

Conrad Golly

I’m Conrad, a retired first responder turned successful Tyapreneur with a passion for real estate, family, and business acquisitions. With a focus on growing online ventures, I bring a wealth of experience to the world of entrepreneurship. I write on investing, personal finance, family life, and business strategies, inspiring others to achieve their goals.

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