Scottrade rating

Scottrade Review


Acquisition By TD Ameritrade


TD Ameritrade, which acquired Scottrade, fully integrated it and discontinued the brand. For this reason open an account with TD Ameritrade directly. Investors could take advantage of TD Ameritrade's new account promotion that allows them to trade for free for two months and gives up to $600 bonus.


Scottrade Commissions, Fees, and Minimum Deposit


InvestmentsCommissions
Stocks and ETFs $6.95
Stocks and ETFs broker assisted $32
Options $6.95 + $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

Investments stocks, options, mutual funds, CDs, munis, U.S. Treasury, Canadian and foreign stocks, ETFs
Scottrade minimum deposit to open account $2,500
FeesScottrade fees
Promotion link Scottrade promotions


We start our 2018 Scottrade review with investing costs. The company offers flat rate, $6.95 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. Funds not in NTF program are only $17 to buy or sell.


Scottrade New Account Setup

Scottrade (member of SIPC) made account opening process easy and painless. 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 deposit to open Scottrade account is $2,500.


Scottrade Mutual Funds Review


On the brokerage website investors will find slightly more than 11,500 mutual funds available for trading. Over 2,600 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.


IRAs


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 requirement.

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 issues.


Scottrade Website/Trading Platform/Tools Review


Website

Scottrade’s website is easy to learn, and it has 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.


Scottrade Review: Investing


Advanced Trading Platforms

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.


Scottrade Review: Trading

Thanks to acquisition by TD Ameritrade, Scottrade customers will soon be able to get access to arguably the best trading platform in the industry - Thinkorswim. This powerful, sophisticated software offers all the bells and whistles that day traders use to make a living.


Mobile Trading

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: App


Scottrade Review: Pros


  • No inactivity, account maintenance or hidden fees
  • No-fee IRAs
  • 500+ local branches for in-person assistance
  • 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 no-commission mutual funds available
  • Instant funds deposits


Scottrade/TD Ameritrade Promotion




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


Recommendations


With $6.95 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. Large number of no-commission mutual funds and low commission on all other funds make it one of the best brokers for mutual funds investing. 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 - 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 has been acquired by TD Ameritrade and customers will soon get access to all the features this giant broker provides.

Scottrade offers $6.95 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, inactivity, or closure.

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.

To summarize our Scottrade review: it's 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. Its new parent company, TD Ameritrade, is one of the best brokers on the market today and definitely worth a try.


Open Scottrade Account


Trade free for 60 days + get up to $600.


Open TD Ameritrade Account



Scottrade reviewed by Brokerage-Review.com on . Rating: 4.5





Is Scottrade Safe?


Some of our readers who are new to investing world sometimes ask us the following questions: Is Scottrade a scam? Is Scottrade safe to use, to keep money and investments? Is my Scottrade account SIPC/FDIC insured? We want to clear all these fears and concerns: Scottrade is a legitimate, safe brokerage firm that has been in business for over 30 years. In fact, Scottrade is one of the five largest and best-known brokerage houses in the United States - so called "Big 5 Brokerages". The firm is reviewed every year by major financial magazines, such as Barrons and Kiplinger, and always gets high scores. There is a number of business analysts that are watching the firm's financial situation and they will not be shy to speak up if anything suspicious was going on.


Is Scottrade SIPC Insured And FINRA Regulated?


Scottrade is a member of FINRA and SIPC. It means that Scottrade brokerage accounts are insured in case of firm failure. The insurance is limited to $500,000 per customer, including up to $250,000 for cash.


Is Scottrade FDIC Insured?


For those who use Scottrade banking services - the firm is also a member of FDIC. The basic FDIC insurance amount is $250,000 per account holder per insured bank for deposit accounts and $250,000 for certain retirement accounts deposited at an insured bank. These insurance limits include principal and accrued interest.

The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, municipal securities, and money market funds, even if these investments were bought from an insured bank. However, customers of Scottrade checking account enjoy full FDIC insurance coverage.


Scottrade BBB Rating


Scottrade BBB (Better Business Bureau) rating is A+. Considering that the firm has a few million customers this result is actually amazing.

On the Scottrade Better Business Bureau page there is a total of 51 closed complaints. Readers could see all the details of the Scottrade BBB rating at this link.


Scottrade/TD Ameritrade Promotion


Trade free for 60 days + get up to $600.


Open TD Ameritrade Account






Scottrade Complaints Introduction


Scottrade brings a lot of value to the table, but it also has received criticism from its customers in certain areas. Let's take a look at some of these complaints and compare them to other brokerage firms.


Scottrade Complaints


A $2,500 minimum deposit is required to open a non-retirement account at Scottrade. By contrast, a TD Ameritrade or Merrill Edge account can be opened with no money down.

A frequent complaint from Scottrade clients is that the broker doesn't allow cash balances to be transferred from a trading account to an external bank account via ACH. Virtually every other brokerage firm in the industry does allow this.

Scottrade is a securities-only broker. It does not have futures or forex trading. TD Ameritrade has both. Scottrade also doesn't offer insurance or estate planning, while Fidelity provides assistance with both of these important financial services.

Scottrade customers can only reach a representative over the phone during the day and evening. Other firms, such as E*Trade, offer 24/7 service. Scottrade also does not provide on-line chat, a convenient feature that Fidelity and Schwab do offer.

Scottrade does not provide any exchange-traded funds that are free to trade. This is a major failure during a time when many other firms do offer a list of commission-free ETF's. Even Firstrade, a low-cost broker cheaper than Scottrade, has 700 ETF's that are free to trade.

While Scottrade does offer an advanced desktop platform, it carries steep account requirements to access. Traders must have at least $25,000 on deposit with the company, or place nine or more stock or option trades per quarter. TD Ameritrade has no requirements at all for its platform.

While a chart on Scottrade's website can be detached to form its own window, the graph does not fill the whole screen, like it does at E*Trade. Scottrade also has only about 30 technical studies, whereas Ally Invest's browser-based charting system boasts around 90. Only trendlines and horizontal lines are available on a Scottrade chart, whereas Fidelity also offers Fibonacci retracements.

Unlike Ally Invest, the Scottrade website has no community forum. This is a nice feature that provides an area where traders can discuss market news and find helpful answers to trading questions.

While Scottrade does have option chains, it does not have an options screener. OptionsHouse, by contrast, does have such a tool.

Customers have complained that Scottrade's mobile app is somewhat rudimentary. There is less market news on Scottrade's app compared to Fidelity's. The Scottrade app also doesn't offer live streaming of financial news, unlike Schwab's app. Alerts on the Scottrade app cannot be sent via text message. Charting is more sophisticated on the TD Ameritrade app as well.

At least Scottrade offers a mobile app. It does not provide any platform at all for Apple TV or a smartwatch. Fidelity has both.

The last Scottrade complaint is that the broker has an irritating $500 minimum brokerage account requirement to apply for a bank account with the company. Many other brokers, including Fidelity and Merrill Edge, do not have any such requirement.


Scottrade Strengths


Although Scottrade does receive some criticism, the broker nevertheless has advantages in certain areas. Here's a rundown on the broker's strong points.

Scottrade customers receive an easy-to-remember low flat rate on ETF and stock transactions. At just $6.95, it places the firm squarely in the mid-cost category.

Options at Scottrade only cost an additional 70¢. Most other firms are higher, including Capital One Investing (75¢) and optionsXpress ($1.50).

There is a wide selection of mutual funds at Scottrade with excellent search tools. The broker has 11,370 funds that are open to new investors, with 2,031 carrying no load, and no transaction fee. This selection is larger than Capital One Investing's and Firstrade's. Scottrade's transaction fee for non-NTF funds is also low by industry standards—just $17. By comparison, TD Ameritrade charges $44.99.

Scottrade has the largest nationwide network of branch locations of any on-line discount broker. Currently, there are more than 500 locations across 47 states and Washington, DC.

Although Scottrade does have a $2,500 minimum opening deposit requirement for a regular brokerage account, an IRA carries no opening minimum. There is also no fee to close a Scottrade IRA, whereas Fidelity and several other brokers do charge a closeout fee.


Scottrade Complaints Summary


Scottrade definitely has some weaknesses, but these tend to be overshadowed by the company's advantages. The firm offers an impressive suite of investment services at the prices much lower that all of its bog competitors. Mutual fund investors, beginner investors, and retirement savers can do especially well here.





Scottrade Automatic Investing


Regular purchases of mutual funds can be made at Scottrade. This service allows investors to take a hands-off approach to investing and simply allow a computerized system to add funds to a position at pre-determined intervals. Of course, a fund position must be open and an account must have sufficient cash before the automated system makes a purchase.

For example, say you wanted to add an extra $300 per month to the Touchstone Ultra Short-Duration Fixed-Income Fund (TSDOX). You can set the purchase to be any date—the 9th, for instance. On that date, or near it if it falls outside a trading day, Scottrade will automatically send a purchase order for $300.

In order to participate in this program, the fund's minimum subsequent purchase amount must be equal to or lower than the amount you want to purchase. It's a convenient option because you don't have to manually enter an order every time you want to add to the position. Choosing this method also takes some of the emotion out of the investing process.

Scottrade's service is a form of dollar cost averaging since you buy a specific dollar amount each month rather than a specific number of shares. When the NAV is lower, you will get more shares than when the NAV is high.

Scottrade charges $2 for each automatic purchase if the fund is not on the broker's NTF list and is also no-load. To enroll a fund for automatic purchases, you need to fill out a form. It can be obtained on-line or at a nearby Scottrade location.

Only mutual funds are eligible for this program. Other securities, including stocks, ETF's, and fixed-income products, cannot be purchased. However, Scottrade does have a convenient dividend reinvestment program, called FRIP, that can be used with stocks and ETF's. Under this plan, cash dividends from enrolled securities are deposited into a FRIP pool. The pool is programmed to purchase certain stocks and ETF's when it reaches a high enough level.

Mutual fund dividends are not eligible to be used for FRIP purchases. The dividend reinvestment system can be used for regular brokerage accounts, along with retirement and margin accounts.

Mutual fund dividends cannot be used to fund a FRIP pool, nor can the program's balance be used to purchase mutual funds. The system is strictly for stocks and ETF's. A great feature of FRIP is that the purchase orders are commission free.