Scottrade Account Review: Brokerage Fees, IRA Investing, Pros and Cons, Mutual Fund Offerings
Scottrade Review - Pricing
- Stocks/ETFs: $6.95 per trade
- Options: $6.95 + $0.70 per contract
- No-load mutual funds: $17 per transaction for no-load mutual funds
- Listed corporate bonds: $35 fee + $3 per bond (minimum investment $1,000)
- Unit Investment Trusts: $50 liquidation fee
Scottrade Important Fees and Surcharges
- Extended hours surcharge: $0
- Large order surcharge: $0
- Penny stocks surcharge: 0.5% of the principal value
- IRA setup fee: $0
- Annual IRA fee: $0
- Maintenance fee: $0
- Inactivity fee: $0
- Hidden fees: $0
Scottrade Account Advantages
- Over 500 local branches
- Good banking services
- Great Trade Ideas tool
- No IRA fees (setup, annual, or termination)
- Free dividend reinvestments
- Excellent customer service
Scottrade Account Disadvantages
- Will be merged into TD Ameritrade this year
- Advanced trading platform, ScottradeElite, is only available to $25,000+ accounts or for clients making nine or more trades in last 3 months
- Cannot short sell stocks under $5
- Surcharge of 0.5% of the principal value on penny stock trades
Scottrade Account Types
- Standard Scottrade Accounts
- Joint Tenants
- Individual Retirement Accounts
- Traditional IRA
- ROTH IRA
- Simple IRA
- SEP IRA
- 401K Plans
- Defined Benefit
- Money Purchase
- Keogh DVP
- Rollover IRA
- Specialty Accounts
- Trust Account
- Investment Club
- Sole Proprietorship
- Corporate Accounts
- Limited Liability Company
- Stock Broker-Assisted Account
- 401K Plans/Defined Benefit/Money Purchase/Keogh DVP
Scottrade Trading Tools Review
The firm's website is very easy-to-use even for beginner investors. On the website
clients can place orders for stocks, options, mutual funds, bonds, and ETF’s. The website has a search tools for stocks, mutual funds, options, ETFs, and
fixed-income securities such as CD’s and bonds.
A step up from the website is Scottrader Streaming Quotes: a Java-based system launched from the website. It offers charting, convenient order entry,
market news, and other services. It also offers Level II quotes free of charge to customers who place 10 commissionable trades per month,
or who pay $10 a month for the service. The Scottrader Streaming Quotes platform is customizable and easy to learn.
There is also an advanced platform called ScottradeELITE available for download, but you must have a minimum account balance of $25,000 or make
at least 9 stock/ETF trades in last three months to use it. If your stock investing is the typical kind and doesn’t rely on the hair-trigger timing and
relatively tiny gains that are often necessary in day trading, this platform will have plenty of power.
In addition, the company provides solid research and analysis with the S&P reports as well as a Stock Screener - very useful tool for both fundamental and
value investors. The firm's trading and research tools are easy to learn and to use for beginner investors, even if they hardly know what they are doing.
Scottrade offers applications for iPhone, iPad, Android, and mobile web. The interface is intuitive and user friendly. Users can place
orders, read market news, search for options, and look over account and position data.
Scottrade has over 500 local offices, where customer could visit and talk with representatives face-to-face. The staff there is very friendly and treats
everyone with respect, regardless of how big their account is (unlike some other brokerage houses).
Scottrade doesn't have IRA fees, not even IRA termination fee, which most other online brokers are charging. Coupled with piece of mind and sense of
security of having account at the large firm, it makes the broker an excellent option for a retirement account.
Scottrade offers investment education on a web page called Knowledge Center. Here customers will find articles and videos on a wide range of
financial topics including investing for retirement.
Scottrade along with Charles Schwab and TradeKing
is boasting the best customer service among brokerage companies. The firm can be contacted via an on-line chat system, phone, fax, or e-mail. The phone
service is available 5 AM to 12 AM (CST), Monday through Friday, and 8 AM to 6 PM on the weekend. The broker also has Facebook and Twitter accounts,
and can be contacted there 8 AM to 8 PM (CST), Monday through Friday.
Scottrade is one of the "Big 5 Brokerages": the five largest and best-known brokerage houses in the United States
(the other four are TD Ameritrade, Charles Schwab,
Fidelity Investments, and Etrade).
Last year Scottrade was acquired by TD Ameritrade and it is expected to be fully assimilated this year.
The firm is charging $6.95 per online trade on stocks and ETFs, and $17 for no-load mutual funds. With Scottrade the only exception to their flat rates is penny stocks: if you purchase
a stock with a share price under $1, a surcharge of 0.5% of the total trade amount is added to the $6.95 commission.
At Scottrade there are no “nickel and dime” fees you often see with other financial institutions. There are typical fees for unusual occurrences
like stop payments, research, duplicate statements, and the like. The main avoidable fee is the paper statement, which is $2 a month. Statements
are available online, however, so there’s really no reason to bother with the paper option. Brokerage accounts at the company carry no inactivity
or account maintenance fees.
Option and margin trades are available, but you must have an account approved for these (with margin trading, the brokerage is essentially extending
you credit, after all). The fees are higher - there’s an additional $0.70 per contract charge for options.
Depositing money into account for investing or trading is very easy. Clients can link to their bank account (one or more) and make transfers online.
The process is instant, easy, and free. Minimum to open cash account is $2,500.
Scottrade Review Summary
Scottrade is a large brokerage that offers unique advantages at low cost that many customers will find attractive.
Stock and options traders who don’t need cash management features or a lot of hand holding would do better at
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