4.5-star brokerage firm rating

Scottrade Review

4-star brokerage firm rating

Charles Schwab review

Charles Schwab vs Scottrade



Scottrade vs Charles Schwab in 2014: Account Pricing, Commissions, Fees




Scottrade


Charles Schwab

  • Stocks and ETFs: $7
  • Stocks and ETFs broker assisted: $32
  • Stocks and ETFs interactive voice response (IVR) telephone system: $32
  • Options: $7 + $1.25 per contract
  • Mutual funds: 3,000+ commission-free NTF funds, $17 for others
  • CDs, OTC Secondary Corporates, OTC Secondary Municipals, U.S. Treasury Bills, Notes, Bonds and STRIPS, New Corporate Offerings: subject to a markup or markdown
  • Listed Corporate Bonds: $35 + $3 per bond (minimum investment $1,000)
  • Unit Investment Trusts (UIT): $50 liquidation fee
  • Foreign Stocks Transferring In or Out: $60 per transaction
  • Investment products: stocks, options, mutual funds, CDs, munis, U.S. Treasury, Canadian and foreign stocks, ETFs
  • Scottrade minimum deposit to open account: $500
  • All Scottrade fees

  • Stocks and ETFs: $8.95
  • Stocks and ETFs broker assisted: $33.95
  • Stocks and ETFs phone trades: $13.95
  • Options: $8.95 + $0.75 per contract
  • Mutual funds: $76 to buy, $0 to sell. OneSourceĀ® Mutual Funds - free
  • CDs, Corporate Bonds, Municipal Bonds, Government Agencies, Zero-Coupon Treasuries, including STRIPS and Mortgage-Backed Securities: $1 per bond, $10 minimum, $250 maximum
  • Preferred Stocks and REITs: $8.95
  • Commercial Paper and Foreign Bonds, Unit Investment Trusts: call for pricing
  • Investment products: stocks, bonds, mutual funds, futures, Treasury issues, options, CDs, insurance, ETFs, annuities, non-U.S. securities and ADRs, WEBs and Canadian foreign orders
  • Charles Schwab minimum deposit to open account: $1,000
  • All Charles Schwab fees




Scottrade vs Charles Schwab: Pros



Scottrade


Charles Schwab

  • No inactivity, account maintenance or hidden fees
  • No-fee IRAs
  • #1 in customer satisfaction according to JD Power and Associates
  • 500+ local branches for in-person assistance
  • Great support for beginner investors with a massive number of educational resources
  • Online user community
  • Good banking services: savings, CDs, money market and free checking accounts (free ATM withdrawals, VISA check card, and first order of checks free)
  • Free real-time streaming quotes and charts
  • Free dividend reinvestment for mutual funds (but not for stocks)
  • Largest number of mutual funds - over 14,500

  • Personal guidance is available at no additional cost
  • 300+ offices for personal visits and deposits
  • Great, varied research
  • Rich selection of investment products (large number of mutual funds - over 14,500)
  • No surcharges on penny stocks, large orders, or after-hours trading
  • No account maintenance or inactivity fees
  • Very good customer service (but no chat)
  • Free DRIPs (dividend reinvestment plans)




Scottrade vs Charles Schwab: Cons



Scottrade


Charles Schwab

  • Additional 0.5% of the principal value commission for stocks under $1
  • No electronic withdrawals, but you can use a debit card or check. Once you receive checks, you will have the routing number and account number, which you can use to withdraw money via ACH initiated from other financial institutions

  • High commissions on stocks, options, mutual funds and ETFs
  • High margin rates
  • Company doesn't list all its fees on its website
  • Advanced trading platform available only to clients executing three or more trades per month
  • Long, complicated new account setup and funding
  • No free streaming quotes (requires 120+ equity and options trades in the last 12 months, or 30+ equity and options trades in either the current or previous quarter, or $1 million in assets)




Charles Schwab vs Scottrade: Comparison Summary



Scottrade (Scottrade Review) offers lower stock and ETF commissions than Charles Schwab (Charles Schwab Review): $7 per trade versus Schwab's $8.95 per trade. With Scottrade investors could invest in over 3,000 NTF (no transaction fee) mutual funds commission-free and buy all other mutual funds for $17. At Charles Schwab mutual funds cost very steep $76 to buy but $0 to sell.

With Charles Schwab investors get decent banking services, wide selection of investment products and great customer service. But their website needs cleaner design and capabilities upgrade.

Both companies don't have account inactivity, maintenance or hidden fees, and do not charge higher commissions on large orders and extended hours trading. Scottrade, however, has a surcharge on penny stock (stocks priced under $1) trades.

Both firms do not have IRA setup and annual IRA fees. Unlike almost all other brokers, Scottrade doesn't even charge IRA account closing fees, and it is rated as one of the Top Brokerages for IRA Account. It is also in our list of Best Firms for Beginner Investors: the company offers tons of learning materials and helpful online user community.

Based on significantly lower commissions (especially on mutual funds), which could mean savings of thousands of dollars over the years, we strongly recommend Scottrade over Charles Schwab to all customers.

Scottrade Promotion - $100 in transfer fees
reimbursed:

Scottrade Review
Charles Schwab Promotion - none
right now:

Charles Schwab review


This article was updated on 8/19/2014.



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