Scottrade review 2010: Best Discounted Brokers for Online Stock Trading

Scottrade Commissions, Fees and Investment Products Offered (2010)
  • Stocks and ETFs: $7
  • Options: $7 plus $1.25 per contract
  • Mutual Funds: 2,800+ for free, $17 for all others
  • Investment products: stocks, options, mutual funds, CDs, munis, Canadian stocks, ETFs
  • Minimum to open account: $500
Scottrade offers flat rate $7 trading commission for stocks over $1. But what we really like are over 2,800 no transaction (free) mutual funds, which allows mutual fund investors invest for free.

Scottrade Account Application

Scottrade made the account opening process easy and painless. Their Money Direct feature allows customers to instantly transfer cash from their checking account. Minimum to open account is a reasonable $500. Trading Tools

Scottrade customers can now trade on a newly redesigned Web site that is easy to navigate with even more advanced stock trading features. Customers can manage their accounts, trade, find stock research and get quotes all within a site that has a new, updated look.

Customers can also trade on Scottrader, where they have access to live streaming quotes, news, top ten lists and interactive charts. Other valuable tools include personal stock lists and quick quotes to help customers track individual stocks and make timely trades when investing online.

So what do they offer in-terms of an actual trading desk? How do you make trades? Scottrade offers several options for you to do your trading:
  • Scottrade Trading Web Site – make all your moves from any computer.
  • ScottradeELITE Advanced Trading Platform – an application for your desktop.
  • Scottrader Streaming Quotes – monitor in the real-time.
  • Scottrade’s OptionsFirst – an options focused application available for download.
  • Scottrade Mobile Trading Site – monitor and trade from any internet enabled mobile device.

ScottradeELITE is an advanced trading platform built exclusively for active traders. ScottradeELITE launches right from the trader's desktop and offers complimentary Dow Jones News, Comtex News, advanced charting capabilities, technical analysis and integrated Level II Quotes. And now, ScottradeELITE offers NASDAQ TotalView, which shows traders every bid and ask for every market participant, allowing them to more quickly make better trading decisions. (Level II and TotalView fees may apply.) ScottradeELITE is free to those who qualify. To download ScottradeELITE, customers have to maintain a minimum account value of $25,000.

Screenshots (click to Enlarge):

Scottrade Account Pros/Advantages

  • Branch Access: Perhaps the best thing about Scottrade is that you can visit one of their 467 branches across the United States while still enjoying “online-only” pricing. In addition, Scottrade continually receives high marks from J.D. Power & Associates and others for their excellent in-person and telephone customer service.
  • Free Real-Time Quotes: Most brokers charge you extra to get real-time pricing; not Scottrade.
  • Speed: Fast .66 second trade execution speed.
  • The Prices: Although not the absolute cheapest, Scottrade’s $7 trades are pretty close. Plus, Scottrade has no account maintenance, inactivity, or account closing fees.
  • Mutual Fund Choices: Scottrade offers an impressive number of investment options from stocks to bonds to ETFs, but they really shine when it comes to mutual funds. With Scottrade you can access over 15,000 funds, more than on Fidelity, TDAmeritrade or E*Trade.
  • Low Opening Deposit: All you need to open an account is $500 ($2,000 for a margin account).
  • Great support for beginner investors with massive amount of educational resources. Many years ago, when I just started my investment activities, that was my choice, and I was never sorry for my selection.
  • Margin rates are among lowest of national online brokers
Scottrade Account Cons/Disadvantages

  • No Dividend Re-investments: Ideally, when you earn dividends from an investment, you should reinvest them (reinvested dividends are like giving your compounding returns a shot of adrenaline). Some brokers will do this for you automatically at no charge, but Scottrade distributes your dividends as cash, meaning you’ll need to pay another trade commission to buy more shares with your dividends.
  • No Electronic Withdrawals: Although you can fund Scottrade accounts by electronic transfer from your checking account, if you want to withdraw money, you’ll have to wait for a check. 
  • Not the Cheapest: It’s hard to have a beef with Scottrade’s $7 fees, but if it’s purely low-cost trades you’re after, Zecco and TradeKing may be cheaper.
  • Commission: Additional 0.5% of the principal value commission for stocks under $1
Media Reviews / Rating

Consumer Reports performed solid survey in March 2009 of 8,969 online subscribers about their experience between January 2008 and January 2009 (not necessarily those of the general population) in relation to 17 online discount brokers. Scottrade scored 83 of 100 in consumer satisfaction, ranking 5 of 17 participating companies.

According to the Barron's review, Scottrade is ranked 16th out of 25 overall participants. However, it was highlighted that the company has a lots of investor education possibilities, from live events held at one of Scottrade's branch offices to the new Knowledge Center on the firm's Website.

Scottrade lands in seventh place in the rankings of the 16 brokers in the survey, which also names the best performers in six categories. The review says Scottrade has "limited banking services," but that "filling a trade is fast and easy."

Consumers Rating

Scottrade Review Summary

Scottrade is one of the veterans of the discount stock trading -- a solid, well-established company that has been around for over 30 years. The firm has $7 flat rate commissions (with exception for penny stocks).

Scottrade keeps customers happy by avoiding unnecessary fees for things like IRAs, large orders, after-hours trading, account maintenance or inactivity. It's also one of only two firms that does not charge account closing and transfer (ACAT) fee. Scottrade is a leader in customer service and investor satisfaction according to JD Power and Associates.

Scottrade is an excellent choice for beginners, those who invest in mutual funds, and long-term "buy and hold" investors (mainly because of no account inactivity charges). No-fee IRAs make the company one of the Top IRA Brokerages.

Because Scottrade is a stable, seasoned brokerage firm with a good reputation, it is the natural choice for people who don't trust their money with newer companies but also don't want to pay $10+ for trades (and multiple fees!) with other established brokers.

Contact Information

Phone: 1-800-619-SAVE; 1-800-619-7283
Phone Hours: Monday - Friday: 6 a.m. to 10 p.m. CT Saturday: 8 a.m. to 4 p.m. CT Sunday: Closed

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