Scottrade Review: Commissions, Fees, and Minimum Deposit
|Stocks and ETFs|| $7|
|Stocks and ETFs broker assisted|| $32|
|Options|| $7 + $0.70 per contract|
|Mutual funds|| $17|
|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|
We start our 2016 Scottrade review with investing costs: the company offers flat rate, $7 per trade commission on stocks and ETFs priced over $1. The broker
provides over 2,600 no transaction fee (NTF) mutual funds, which allows mutual fund investors to invest commission-free. Mutual funds not in NTF program
are only $17 to buy or sell.
Scottrade made account opening process easy and painless. We clicked their promotion link - Get up to $2000 when you open new account or add funds to existing account.
and completed application forms in less than 10 minutes. Thanks to electronic signatures there are no forms to print and mail. After setting up
security questions and consenting to few standard agreements, we were free to login and explore the website. The next day we got a phone call
from customer service representative asking if we had any questions - this is always a nice touch.
The Scottrade Money Direct feature allows customers to instantly transfer cash directly from their bank. At the moment this is rare among brokers, where in some cases clients need to wait for weeks before deposited funds appear
in their brokerage account. Minimum to open brokerage account is $2,500.
Scottrade Mutual Funds Review
On the Scottrade website, investors will find slightly more than 11,500 mutual funds available for trading. Over 2,100 of these have no transaction
fee and no load. The broker's handy screener makes narrowing down these funds fairly straightforward. It uses criteria such as Morningstar rating,
asset type, performance history, and standard deviation. There are also pre-defined screens, including high yield fixed income, real estate, and
international equity. The broker's website also has ample information on trading mutual funds. Articles go over basic information, such as benchmarks,
the management team, and tax considerations. A fund's profile page has even more detailed information. This includes important data, such as
distribution history, risk-return analysis, and portfolio composition. Some funds also have a report from Morningstar at no cost.
Each mutual fund at Scottrade has its own minimum purchase amount. Some funds are as low as $100. Most funds have the same minimum for IRA's. There
is no low-balance fee for mutual funds with this broker. Scottrade does charge $17 for transaction-fee funds. This charge is applied to purchases,
sales, and exchanges. However, load funds are always free to buy. NTF funds held less than 3 months are also assessed a $49 short-term trade fee.
Rydex, ProFunds, Direxion, and Guggenheim fund families are exempt from the policy.
Roth, Traditional, SIMPLE, SEP, and Rollover IRA's are available at Scottrade. There are no fees associated with any of the broker's IRA's, including
setup fees, inactivity fees, or annual fees. An IRA with the broker can be opened with $2,500, and there is no on-going minimum balance
Investors will find a moderate amount of IRA tools on the Scottrade website. A very useful calculator shows the differences in withdrawal amounts
between a Roth and Traditional account at retirement. Users input certain data, such as income tax rate, age at retirement, and adjusted gross
income. The tool then calculates taxes due and account values at retirement. Another tool, a retirement savings calculator, estimates whether
investors are saving enough to build a nest egg that will last throughout retirement. The broker also has articles that discuss retirement
Scottrade Review: Website/Trading Platform/Tools
Scottrade’s website is pretty simple, nevertheless, there is a useful trade ticket at the bottom of the browser
that hides in the left side. Clicking on the arrow icon expands the tool to the right. It displays important indices, which can be customized. The trade ticket can
display price information for stocks, ETF's, and mutual funds. Trades can be placed for stocks, options, and ETF's. For stocks and ETF's, the tool shows the day's
bid-ask spread, the 52-week high and low, and volume. Clicking on 'Quick Trade' increases the size of the trade ticket so that an order can be placed. Some advanced
orders are available, including stop limit on quote and trailing stop on quote. The trade ticket can also be detached from the website into a discrete window.
On the Scottrade website clients can find comprehensive screeners for ETF's, mutual funds, fixed-income, and stocks. Reports from independent third
parties are available for fixed-income products and stocks. Order placement for fixed-income securities takes place on an easy-to-use web page.
For traders who want more than the website, the broker offers Scottrader Streaming Quotes. This is a Java-based platform and it is launched from the website. The software
has some essential features, such as order entry, market news, and charting. The platform is fairly simple and easy to learn. A search function shows market movers for
the day. These are sorted by criteria such as volume and percent gain. The platform comes with no frequent trader requirement.
The broker's most sophisticated trading system is ScottradeELITE. This is a desktop program. It has some important drawing tools and over 50 technical indicators. Any
window within the platform can be detached to be displayed full-screen. The broker does require at least 9 stock or option trades in a rolling 90-day period, or a
$25,000 account balance, to use the software.
At Scottrade, customers can trade on Android devices, mobile web, iPhone, and iPad. The app has a menu icon in the upper-left of the device. Tapping on the icon shows the many features that are available. Users can search for options, transfer funds from an external account into Scottrade (but not vice versa), pay bills, sign up for alerts, place an order, and look over position and account data. There is also a branch locator in the menu so traders can find the nearest Scottrade location.
Scottrade Review: Pros
- No inactivity, account maintenance or hidden fees
- No-fee IRAs
- 500+ local branches for in-person assistance
- Great support for beginner investors with a massive number of educational resources
- Good banking services: savings, CDs, money market, and free checking account that comes with free ATM withdrawals, VISA check card, and first order of checks
- Free real-time streaming quotes
- Flexible dividend reinvestment program (DRIP)
- Large number of mutual funds available
- Instant funds deposits
Scottrade Review: Cons
- Surcharge of 0.5% of the principal value on stocks priced under $1
- No electronic withdrawals, but clients can use a debit card, checks, or ACH transfer from their bank
- $25,000 account balance, or 9+ stock/option trades during the previous three months is required to use advanced trading platform (ScottradeELITE)
- $2,500 minimum to open a brokerage account
With $7 stock and ETF trades, and a sophisticated desktop platform for frequent traders, Scottrade is a good choice for investors who frequently
buy and sell equities. Furthermore, investors who prefer to use a local branch for in-person service won't be disappointed with the broker's
network of over 500 locations, one of the largest in the industry.
Scottrade Review Summary
Scottrade is one of the veterans of the discount online investing - a solid, well-established company that has been around for over 30 years.
The firm offers $7 flat rate online stock and ETF trades (with the exception of penny stocks) and $17 rate on mutual fund transactions -
these are the lowest commissions among large brokerage houses. The broker keeps customers happy by charging very few fees: there are no fees for things
like IRAs, large orders, extended-hours trading, account maintenance, or inactivity.
We would love to see Scottrade cancel conditions for using advanced trading platform. Also, the absence of electronic fund withdrawals is puzzling;
though withdrawals can be done using a debit card, checks, and via ACH transfer initiated from other financial institutions.
Scottrade created their unique version of dividend reinvestment program (DRIP). They call it FRIP (flexible reinvestment program) and the difference
with regular DRIP is that clients can reinvest dividends commission-free not just into stocks or ETFs that paid the dividends but into any stocks or
ETFs. Users can change their FRIP selections and percentage allocation to each security at any time.
Scottrade has an FDIC-insured bank that offers checking and savings accounts with the standard insurance of $250,000. The checking account
has no setup fee, no minimum balance, and no monthly account fee. It comes with free checks and a debit MasterCard. In order to open a
Scottrade bank account, clients must have at least $500 in a Scottrade brokerage account.
Thanks to live webinars, events at the local offices, tons of learning materials, and very helpful customer service, Scottrade is an excellent choice for beginners.
Clients that invest in mutual funds get over 2,600 commission-free (NTF) mutual funds to choose from, while long-term, "buy and hold" investors have
no account inactivity charges to worry about. Completely no fee retirement accounts make Scottrade one of the
Best Companies for an IRA.
Scottrade is a stable, seasoned brokerage firm with a good reputation, which makes it very appealing to anyone who would not trust their money to
newer companies, but also doesn't want to pay high commissions with other established brokerage houses. The ability to visit a local branch and
talk with someone face-to-face can be very valuable, too.
In 2016 self directed investor study conducted by J.D. Power and Associates, Scottrade came out #1, beating all of its main competitors. Because of everything
mentioned above, in 2016 we ranked the company among the Top Brokerage Firms.
Get up to $2000 when you open new account or add funds to existing account.
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