Scottrade Is Gone
UPDATE: Scottrade has been fully merged into
TD Ameritrade
and discontinued. See TD Ameritrade Review
instead.
Scottrade Review
- Stocks & ETFs: $0
- Options: $0.65 per contract
- Mutual Funds: $17
TD Ameritrade
announced an agreement to acquire Scottrade. TD's purchase of Scottrade is expected to close in
the second half of fiscal 2018. Meanwhile, both brokerage houses continue offering the
highest possible brokerage services to their customers.
Scottrade is a well-known investment platform that is used by millions of individuals worldwide. They offer a wide
variety of investment options ranging from traditional brokerage accounts to IRAs with very competitive fees.
This review will go over the ease of opening an account, the user interface, finding investments, fees, unique features,
trading platforms and tools. Scottrade offers one of the best investment experiences
for a new or casual investor.
Opening An Account With Scottrade
Opening a Scottrade account is almost the same as opening any other investment account or bank account.
They will ask you for all the relevant information along with some personal questions to
verify your identity.
All in all, registration takes around 15 minutes and the questions are fairly straightforward (name, address,
employer information, beneficiary, etc.). With the advent of an electronic signature, opening an account with the
broker can be done online from beginning to end.
Also, if you run into any issues, you can always call its national service center seven days a week or reach its
representatives via chat system or email. In fact, the company's customer service is outstanding.
Communication is good throughout: Scottrade sends you emails regarding next steps, the status of your account,
and they are easy to contact if you have more in-depth questions.
Scottrade Website User Interface Review
Scottrade updated its website, giving it a new look. The navigation throughout
the website is very easy. To make it more convenient for its clients, Scottrade allows some room for customization.
The home page can be fully adjusted to an account holder's preferences by adding or removing blocks of content
such as News, Positions, Alerts, Gainers and Losers, and other modules (up to 13 in total). In addition,
multiple home pages can be created if needed.
Entering or exiting position can be done from any page on the website with the Quick Trade Bar, which appears at the
bottom of a screen. In addition, the bar displays three stocks or indexes of a customer's choice, allows investors to
make research and build option. Account balances, positions and open orders can also be checked through the Quick
Trade Bar's right menu.
The bar can be easily detached to a separate window or minimized by clicking a big arrow button
at its right border.
In addition to the website, Scottrade provides two other platforms - Scottrade Streaming Quotes and Scottrade ELITE.
A Java-based platform, Scottrade Streaming Quotes is customizable, easy to use
and available to all customers.
Scottrade ELITE is the most advanced broker's platform.
The only hitch with Scottrade ELITE is that it is available to investors who execute at least 9 trades in the previous
three months or have an account balance of $25,000 or more. Unlike Scottrade, TD Ameritrade's
professional level platforms are available to all customers with no conditions and free of charge.
Scottrade also has a mobile application available for iOS and Android.
Scottrade IRA Accounts
The brokerage firm provides a variety of IRA accounts (ROTH IRA, Traditional IRA, Rollover IRA, 401K Plans,
Simple IRA, SEP IRA, Defined Benefit, Money Purchase and Keogh DVP), which is another advantage of Scottrade.
Unlike some other well-known IRA providers, no account fees are charged at the broker, not even for closing an account. Along with a wide range of investments and
straightforward commissions it makes Scottrade one of the best IRA providers in the country. Obviously,
IRA accounts are not available for non-US residents.
Scottrade Education and Research Tools Review
Another advantage of Scottrade's website is its wealth of knowledge hidden behind its new
interface in the Knowledge Center section. Some parts of this educational section are open to the public. Of course, the broker's customers will benefit the most from the Knowledge Center
as they can gain a full access to the informational and educational tools provided by Scottrade.
The broker offers live webinars, Q&A sessions, podcasts, market updates and more; all available for free. This is
especially useful for new IRA account holders who may be interested in learning more about the tax advantages and rules
for their account.
All account holders have access to third-party reports, trading articles, performance analysis, daily market summary
reports and more. There is also an extremely powerful research tool, which is one of the best in the business.
Screeners are available for stocks, ETFs and mutual funds. The screener allows for an amazing level of granularity
when searching for investments. This is especially useful for new investors; it allows them to sort through an almost
overwhelming amount of available selections.
Sorting can be done through many criteria, depending on an asset class. Criteria include but are not limited to
fundamentals, performance, Morningstar ratings, earnings and dividends. Predefined Screens are also available through
the tool for each investment option.
After getting the hang of this tool, an investor is able to narrow down thousands of selections to less than five.
At this point, the investor can look at the individual Morningstar investment reports for free and research each
fund in more detail.
The Mutual Fund Screener tool is especially important to individuals looking for investments for their IRAs as it
helps them find the funds with the best historical performance and reliable fund managers.
The Stock Screener Visualization is another search tool, which will be especially valuable for investors who prefer
receiving information in a visual format. Filtering investments is very easy and can be done by clicking and dragging the
blue handles in each data point column, which represent criteria.
Scottrade's Select Lists for exchange-traded funds and mutual funds provide selections of funds
evaluated and ranked by Morningstar and ETF.com. However, Scottrade is truly lacking on an
array of commission free ETFs offered compare to other well-established brokerages.
Traders who are interested in the most liquid
low-cost ETFs with options for diversification might consider to choose TD Ameritrade with
its excellent collection of commission-free ETFs.
The latter is considered as the leading independent authority on ETFs.
Investors have free access to a report on each fund on lists.
Scottrade's Trading Commissions Review
The fees at Scottrade are the lowest among brokerage houses.
They charge $0 per trade.
Every large broker out there charges fees ranging from $7 to $20+. Keeping this in mind, Scottrade comes in as one of the cheaper options
Also as some other big-name brokers, Scottrade has a referral program. Through this program, existing customers get
3 free trades for each new customer they refer. New customers who open an account after being referred get 3 free trades too!
Scottrade's Free Dividend Reinvestment Program Review
The Flexible Reinvestment Program (FRIP™) offered by Scottrade is one of the best dividend reinvestment program (DRIP) on the market.
The main advantage of the FRIP is the flexibility of choosing securities to invest in. When DRIPs will only allow investors
to reinvest dividends back into the securities that generated them, Scottrade's FRIP allows reinvesting in most eligible
stocks and ETFs, including non-dividend securities.
Scottrade's Education And In-Person Advice Review
Scottrade prides itself on two differentiating features: in-person branches and education.
These are provided to their customers for no additional cost.
Scottrade has 500+ branches across the United States where customers can go for investment advice, rollover help,
tax assistance, legal questions… almost anything investing related. This is very helpful for people looking to get a
more personal touch out of a financial institution. Few other online brokers offer local branches.
A free Portfolio Review service with investment experts is a no obligation personalized service offered at local branches.
This particular advantage makes Scottrade stand out from the other discount brokerage firms, which often prioritize
frequent traders whose trades generate a significant revenue. Scottrade pays attention to all of its customers even
to its less active investors who may currently lack the wealth or desire for a full-service brokerage house. Some
big-name brokerage firms offer free portfolio review services only to high net worth investors. However, this is not
the case at Scottrade, where the service is available to all customers. There are no minimum balance requirements,
no fees and no obligations.
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Scottrade Advantages
- Clear and straightforward fees
- Broad selection of investments
- No account set up, maintenance or inactivity fees
- No cost IRAs
- Over 14,500 mutual funds, including 2,637 commission-free NTF funds
- Free dividend reinvestment program (FRIP)
- Free real-time streaming quotes and charts for non-professionals
- Free online educational resources and free live investment workshops
- Free online banking through Scottrade Bank
- Over 500+ locations throughout the country
- Ranks highest in the J.D. Power 2021 U.S. Self-Directed Investor Satisfaction StudySM
- After-hours trading
Scottrade Disadvantages
- Relatively high minimum opening deposit
- Additional 0.5% of the principal value to commissions for stocks priced under $1
- Scottrade ELITE, the advanced trading platform, is only available to active traders (nine or more stock/option trades in the last three months) or
high-net-worth account holders ($25,000+)
Scottrade Review Summary
The broker received the highest overall customer satisfaction in the annual
J.D. Power study, finishing ahead of Fidelity, Tradestation, and Fidelity.
However, USAA Investments ranked even higher than Scottrade,
the No. 1 in the survey. Yet USAA Investments was not included in the final rankings because it is "open only to U.S. military personnel and their
family members," stated the JDPower.com. Nevertheless, a full range of USAA self-directed investments and wealth management services are
available to the general public as well.
Scottrade has a very robust set of offerings. It is a good brokerage firm for new investors,
for mutual fund investors, and for those looking to open an
IRA.
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Scottrade Commissions and Fees
| Investments | Price |
|---|
| Stocks and ETFs | $0 |
| Stocks and ETFs broker assisted | $32 |
| Stocks and ETFs interactive voice response (IVR) telephone system | $32 |
| Options | $0.70 per contract |
| Mutual funds | 2,637 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 |
Scottrade IRA & Account Fees
| Fee | Amount |
|---|
| IRA Setup Fee | $0 |
| Annual IRA Fee | $0 |
| IRA Termination Fee | $0 |
| Full Account Transfer Out | $75 |
| Partial Account Transfer Out | $0* |
| Outgoing Wire Fees (Domestic) | $25* |
| Outgoing Wire Fees (International) | $40* |
| Account Closing Fee | $0 |
* - A $2,500 minimum equity balance must remain in the account; otherwise the $75 full transfer fee will apply.
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