TD Ameritrade vs Scottrade
Scottrade vs TD Ameritrade: The Challenge
Scottrade and TD Ameritrade are two retail brokerage firms who are well-known by investors and offer a variety of investment products. So
which one offers the better value for traders? Let's find out.
The Cost of Investing
TD Ameritrade’s commission for trading stocks and ETF’s is $9.99, while Scottrade famously charges $7. For options, TD Ameritrade charges an
extra $0.75 per contract, while at Scottrade the price is higher: $1.25 per contract.
Customers who place a trade with a human broker at TD Ameritrade are charged a rather steep $44.99, while doing the same at Scottrade sets customers back $32.
TD Ameritrade offers slightly more than 100 commission-free ETF's, while Scottrade has an abysmal zero.
Accounts at both brokerage firms carry no inactivity fees or account maintenance fees. The minimum initial deposit to open an account at Scottrade is $2,500, while TD Ameritrade has a $0 minimum. Both firms also offer IRA's without fees.
Since most investors are more interested in stocks and ETFs rather than options, in this category winner is Scottrade.
Scottrade has more than 14,000 mutual fund offerings. Of these, almost 3,000 have no load and no transaction fee. No-load funds that do carry a transaction fee are $17 to trade on-line. Load funds are free to buy at Scottrade, although they do cost $17 to sell.
TD Ameritrade has more than 11,000 mutual funds to offer its clients. Almost 2,000 carry neither transaction fee nor load. Transaction fee funds come with a rather pricey $49.99 charge.
Scottrade wins this category.
Education and Research
TD Ameritrade offers its customers good-quality research for securities. Investors have access to free stock and ETF reports from Credit Suisse, Morningstar, TheStreet.com, and other third-party researchers. The firm also provides its clients with Investools, which offers classes at the beginner, advanced, and expert levels on a wide range of financial subjects.
Research and educational resources are fairly limited at Scottrade. There are no research reports available. Scottrade does offer investment education on a page entitled Knowledge Center, where traders will find articles and videos on a variety of investment topics.
TD Ameritrade is victorious in this category.
Scottrade advertises its numerous brick-and-mortar branches across the U.S. The firm currently has more than 500 branches nationwide.
However, Scottrade phone service is available only from 5 am to midnight (CST), Monday through Friday, and 8 am to 6 pm on Saturday and
TD Ameritrade has phone service staffed 24 hours a day, 7 days a week. Representatives are available certain hours of the day who speak
Cantonese, Mandarin, or Spanish. The brokerage has more than 100 brick-and-mortar branches located across the United States.
Scottrade is known for proactive customer service and helpful seminars offered at local branches. Scottrade comes on top here.
TD Ameritrade has several different platforms, all of which come with Level II quotes at no cost. First is the regular web site, which is
simple to use. Next is Trade Architect, which is Java-based and launched from the web site. The final platform is
Thinkorswim, which is a stand-alone program. All platforms are free to all
clients. There are no frequent trader requirements.
A useful tool that TD Ameritrade offers is paperMoney, a virtual platform within Thinkorswim that lets investors simulate trading with a
Scottrade’s website is fairly simple. For traders who want more than the website, there is Scottrader Streaming Quotes, a Java-based system. The broker's flagship trading platform is ScottradeELITE, a downloadable program available only to active traders.
This category goes to TD Ameritrade.
Scottrade has mobile platforms for Android, iPhone, iPad, and mobile web. Users can place an order, search for options, and look over account and position data. Unfortunately, there is no capability for mobile check deposit, nor is their any way to contact customer service.
TD Ameritrade has three different apps: Mobile App, Mobile Trader App, and a thinkorswim app. They can be used on iPhone, iPad, and Android. Having three different apps is rather odd, although the apps do have several features that the Scottrade app lacks, such as mobile check deposit and a customer service contact.
TD Ameritrade wins in this category, too.
Cash Management Features
TD Ameritrade offers a checking account with a free Visa debit card and free checks. There are no monthly account fees. ATM fees are reimbursed throughout the United States. The account balance is insured up to $500,000. The broker does this by depositing the total balance in up to two FDIC-insured banks.
Scottrade has an FDIC-insured bank that offers checking and savings accounts with the standard protection of $250,000. A checking account comes with free checks and a debit card. To open a Scottrade bank account, investors must have a minimum of $500 in a Scottrade brokerage account.
Scottrade customers cannot transfer funds out of a brokerage account to an external bank account via ACH. TD Ameritrade does allow its customers to make such withdrawals.
TD Ameritrade is the winner here.
TD Ameritrade offers forex and futures trading, while Scottrade does not. Scottrade provides a unique take on dividend reinvestment
called FRIP that many investors find valuable.
This category is a tie.
TD Ameritrade vs Scottrade: Results
There was one tie, TD Ameritrade (TD Ameritrade Review) was victorious in three
categories, and Scottrade (Scottrade Review) was victorious in three categories.
It's a tie but if costs are important to you than Scottrade has an edge.
You could also open accounts with both firms (with no money down in TD Ameritrade, $2,500 for regular brokerage or 0% down for IRA in Scottrade)
in about 20 minutes, and take advantage of everything these top brokers have to offer at no charge.
Updated on 1/28/2016.
Review discount online brokerage firms comparison: Scottrade or TD Ameritrade? Differences between investment companies. Recommendation for stocks, options, ETFs, mutual funds, bonds investors. TD Ameritrade versus Scottrade for beginner
investors, long term, individual retirement accounts, active/day traders. See what stock broker service is better, cheaper, offers lower fees, cost, rated higher and easier to use. Which broker should you choose?