E*TRADE, part of Morgan Stanley, is advertising a 4.25% annual percentage yield on new money in its Premium Savings account for the first six months, plus cash bonuses of up to $800 on large deposits, through Jan. 10. As of Sept. 30, 2026, the bank’s own page still showed those terms. The 4.25% is a promotional rate that lapses on its own, and the $800 sits at the top of a two-step bonus ladder.
A six-month promotional rate with a base rate waiting behind it
On E*TRADE’s Premium Savings page, read Sept. 30, the promotional APY is listed as 4.25% for six months from account opening, entered with promo code SAVE800. The page lists the enrollment window as Sept. 22, 2026, through Jan. 10, 2027, closing at 8:45 p.m. Eastern on that last day. An account opened on the final evening would carry the promotional rate into July 2027, provided the application beats that cutoff.
The page states that when the promotion ends, the “rate will automatically revert to the Standard APY without any action required.” It shows a 3.75% base rate alongside a 0.50% boost, and it describes the standard APY as “variable and subject to change at any time.” The page carried no “as of” date next to the rate, so 3.75% should be read as what was displayed on Sept. 30, not a commitment for next spring.
What counts as new money
Both the rate and the bonuses are aimed at deposits from outside the bank. E*TRADE defines net-new funds as “funds that originate from outside of the Bank into the Premium Savings Account, minus any funds withdrawn,” and excludes deposits moved over from accounts the bank itself provides. A household that shifts cash from an existing E*TRADE bank account into Premium Savings would therefore not be adding new money under that definition.
The wording carries a second trap. Because withdrawals are subtracted, a saver who deposits a large sum and takes some back out can end up below a bonus threshold even though the initial transfer cleared it. The page sets no minimum initial deposit for the account itself, so the promotional rate does not depend on a big balance. The bonuses do.
Two bonus tiers and the deposit each one needs
The bonus table on the page has two rows. Net-new deposits of $20,000 to $99,999 are tied to a $400 bonus, with a $20,000 balance to be maintained. Deposits of $100,000 or more are tied to the $800 bonus, with a $100,000 balance to be maintained. Under both rows the page says the money must be funded within 30 days and kept in the account for 45 days.
The $800 is thus a bonus tier with a six-figure entry price, not a payment that comes with the account. A saver depositing $50,000 sits in the $400 row, and one depositing $19,999 sits below any bonus at all. Measured as a share of the deposit, $800 on $100,000 is 0.8%, while $400 on $20,000 is 2%, so the smaller tier pays more per dollar deposited.
What the rate is worth on a six-month clock
Simple arithmetic shows how much of the pitch is rate and how much is bonus. Interest at 4.25% a year for half a year on $100,000 comes to about $2,125, ignoring compounding. The same balance at the 3.75% base rate would earn about $1,875 over six months, a gap of roughly $250. Set against that, the $800 bonus is more than three times the rate advantage, so for a deposit that size the bonus, not the 4.25%, is the larger part of the offer.
At the lower tier the picture shifts. Half a year of 4.25% on $20,000 is about $425 and the bonus is $400, so the two pieces are close in size. Those figures are illustrations from the advertised terms, not projections, since the standard APY can change at any time and the promotional clock only covers the first six months.
How the offer compares with other savings rates
A Motley Fool savings-rate roundup dated Sept. 26, 2026 listed the E*TRADE offer at 4.25% for six months with the SAVE800 code, and put Barclays’ tiered savings rates at 3.50% to 3.65%. That comparison is the one that matters for month seven. What a promotional account reverts to matters as much as the headline rate, and the 3.75% base shown on E*TRADE’s page sat a little above the Barclays range in that roundup.
The same page says the account carries no monthly fees to maintain it and describes it as designed to offer up to $500,000 in FDIC coverage for individual accounts. Because the page says the rate reverts automatically, without any action, the drop at month seven arrives on its own schedule and is not tied to any notice on the page.
Interest, bonuses and the tax return
Interest earned here is taxable income. The IRS says in Topic No. 403 that most interest is taxable in the year it becomes available, including interest from bank accounts and certificates of deposit, and that a Form 1099-INT is issued for payments of $10 or more. The same topic says all taxable interest must be reported on a federal return even when no form arrives. For a household with a large six-figure deposit, the six months of promotional interest will show up as income for 2026 or 2027 depending on when it is credited.
E*TRADE’s own terms put the essential limits in one line: the promotional rate applies for six months from opening, the bonus is paid only on net-new funds that meet the $20,000 or $100,000 balance tests, and the standard rate afterward “is variable and subject to change at any time.”
Choosing which retirement account to draw on first
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This article was drafted with AI assistance and checked against E*TRADE’s own page before publication.
